The worldwide smart home devices market is expected to grow 31% year-on-year to 643.9 million shipments in 2018, according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker.
The fastest-growing device category will be smart speaker, which is forecast to register a compound annual growth rate of 39.1% between 2018 and 2022.
The voice technology is on track of continuous development and innovation. While smart speakers remain to be prevalent voice devices, more and more device types – such as thermostats and microwave oven – are gaining voice capability. “Not only do these help to increase the number of touch points available to end users, but it also helps each assistant to grow by expanding reach and gaining a deeper understanding of what, when, and how users approach various tasks,” said Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers.
Despite its fast growth, the smart speaker product category is expected to rank the third in terms of shipment. While Amazon Echo and Google Home systems continue to dominate the market, devices running on Siri, Cortana and Bixby are also on the rise. Xioami and Alibaba, on the other hand, will remain to be the major players in China.
According to IDC, video entertainment products will capture the largest share in terms of product shipments. Video entertainment products include smart TVs and digital media adapters like Apple TV, Chromecast and Roku’s devices. They may serve as the gateway in a smart home and immense competition is expected both in content and in prices. The product category is forecast to register a 10.9% compound annual growth rate over the next five years.
Security solutions – including door/window sensors, door locks and IP cameras – will be the runner-up, accounting for 19.4% of smart product shipments. The product category is forecast to witness a five-year growth rate of 27%.
Smart Thermostats to Grow 20%
Connected lighting and thermostat products are also among the more popular smart home devices. It is worth noting that thermostats, while popular in North America, may encounter limited growth in the rest of the world, where central HVAC systems are not employed and therefore dedicated thermostats are not required.
A smart thermostat is a part of a control system which senses and maintains the temperature of an area. It is an automatic device which is capable of remotely switching on and off the heating of a room through the internet. Smart thermostats can be programmed and used via various mobile devices such as remote controls, smartphones and computers. They can also display the amount of heating being used and control their activity by tracking or learning the daily routine of the user.
As smart thermostats help in saving electricity, their sales have been influenced by the increased demand for energy efficient solutions. This represents another factor which is positively influencing the market growth. Looking forward, the market is projected to reach a value of US$3.4 Billion by 2023, registering a compound annual growth rate of 20% during 2018-2023.
Market Segmentation by Regions
A study by Parks Associates found that local or national retailer is the largest purchase channel of smart home products, followed by online retailer, security dealer, heating/cooling contractor and broadband service provider.
North America has experienced the greatest smart technology adoption, due to the presence of a large number of industrial players, intense research and development in the field, high penetration of Internet of Things, according to Market Research Future.
Europe has also had steady growth. Asia-Pacific market is expected to witness the fastest growth due to increasing awareness among individual about smart technologies and local innovation in the field. Additionally, the growing disposable income has led to changes in lifestyles, acting as a major driver as well.