Market Overview
The Global
Smart Homes Systems Market is expected to reach a value of
USD 107.2 billion in 2023, and it is further anticipated to reach a market value of
USD 986.7 billion by 2032 at a
CAGR of 28.0%. The market has seen significant growth over the past few years and is predicted to grow significantly during the forecasted period as well.
Smart home devices are designed for homes where remote operation from any internet-connected location is vital, as users can manage security access, temperature, lighting, & home entertainment via mobile or networked devices. In a smart home setup, all gadgets are interconnected to the Internet, allowing comprehensive control & monitoring of different services, enhancing convenience and customization for the homeowner.
Key Takeaways
- By Protocol, Wireless Protocols takes the lead in 2023
- By Product, Security & Access Control takes the lead in 2023
- In addition, Home Healthcare is expected to have robust growth over the forecasted period.
- By Application, Retrofit take the lead & drive the market in 2023
- Asia Pacific has a 33.2% share of revenue in the Global Smart Homes Systems Market in 2023
Market Dynamic
The growth of the smart home market is driven by the expanding connectivity and prevalence of Internet of Things (IoT) devices, as the broader adoption of these Internet-connected devices enables consumers to remotely control & monitor their homes, enhancing convenience & energy efficiency. Further, the seamless integration of IoT devices, like voice-controlled assistants & smart appliances, enhances the market's potential, driving consumer acceptance.
Also, the evolution of advanced image sensors, having enhanced sensitivity & noise reduction capabilities, contributes significantly to the global smart home market's growth. In addition, technologies like larger pixel sizes, backside-illuminated (BSI) sensors, and better signal-to-noise ratios improve performance in low-light conditions, allowing better adoption of low-light imaging solutions.
However, the proliferation of smart home devices brings a lot of concerns related to data security & privacy, as collection & transmission of personal data raise the risk of data breaches & unauthorized access, leading consumers to become increasingly wary, which acts as a potential hindrance to the expansion in adoption of smart home solutions.
Driver
Increasing Adoption of IoT and Smart Devices
One key driver for the smart home systems market is its increasing adoption of Internet of Things (IoT) devices and smart home solutions. IoT provides seamless connectivity and control of various home appliances, providing greater convenience, energy efficiency, and security for consumers. Consumers increasingly opt for integrated systems such as smart thermostats, lighting controls, and security cameras which can be managed via smartphones or voice assistants.
Rising awareness about energy conservation and government incentives for energy-efficient solutions fuel the market, while advancements in wireless communication technologies and falling costs of smart devices contribute to their rapid adoption worldwide.
Trend
Rising Integration of AI and Machine Learning
Integration of AI and Machine Learning Artificial intelligence (AI) and machine learning (ML) have emerged as major trends in smart home systems market. AI-powered systems offer predictive analytics, personalized automation and enhanced user experiences - creating significant opportunity in this market segment.
Smart thermostats learn user preferences to optimize energy consumption, while AI-enabled security systems can detect irregular activities through real-time data analysis.
Voice-controlled assistants like Amazon Alexa and Google Assistant employ machine learning (ML) algorithms to increase interoperability between devices, further strengthening interoperability between homes. Partnerships between technology providers and home appliance manufacturers enable more intelligent solutions for modern households.
Restraint
High Initial Costs and Complex Installation
Initial costs and installation processes associated with smart home systems pose a substantial obstacle for their market expansion. Purchase of smart devices, hubs and related infrastructure can be costly for price-sensitive consumers.
Furthermore, professional installation is sometimes necessary for seamless integration, further increasing costs. Technical challenges, including interoperability issues between devices from different manufacturers, further impede adoption.
Limited internet connectivity in remote areas and security concerns related to data breaches also limit deployment in widespread manner. All these factors impede market expansion particularly in developing economies where affordability and infrastructure present difficulties.
Opportunity
Growing Demand for Energy-Efficient Solutions
With growing emphasis on energy efficiency and sustainability comes an impressive opportunity for smart home systems market. Consumers are turning to smart technologies such as automated lighting, thermostats and energy monitoring systems in an attempt to decrease energy consumption and reduce utility bills.
Government regulations and incentives supporting green building practices further fuel this demand. Integrating renewable energy sources such as solar panels with smart home systems provides enhanced energy management capabilities. Emerging markets with expanding urbanization and middle-class populations present great growth potential for energy-efficient smart home solutions, leading to market expansion in coming years.
Research Scope and Analysis
By Product
In 2023, the security & access control segment emerged as the dominant force in the industry, capturing the highest share of overall revenue, which is fueled by the growth in demand for intelligent security solutions, highlighting the need to control access to secure areas or valuables. Using features like custom PINs, live feed playback, fingerprint scanners, smart locks & security cameras allows the monitoring & authorization of access exclusively for authorized individuals.
Further, the home healthcare segment is expected to experience significant growth in the forecast period, which is driven by a consumer trend favoring smart home healthcare products for self-diagnosis, mainly in response to the increase in costs of healthcare & insurance.
Further, the increased emphasis on fitness & health consciousness is also contributing to the segment's growth, with consumers utilizing smart home healthcare products to monitor important indicators like oxygen & blood pressure levels, allowing convenient & proactive health management at home.
By Protocols
The wireless protocols segment is expected for the highest growth during the forecast period as well as it holds the largest market share in 2023, which is due to the capabilities provided by protocols like Wi-Fi, ZigBee, Bluetooth, Z Wave, offering features like mobile connectivity & seamless communication regardless of location. Further manufacturers favor these protocols for their ability to allow smooth communication with less impact on battery life & extended range.
Further, the wired protocols segment is expected to experience significant growth in the coming years, as the traditional products equipped with built-in Ethernet or cable ports contribute to this growth. Also, wired protocols allow the connection & operation of a hub for smart home devices at a centralized location, allowing security with concealed wiring & less connectivity issues. Also, the increasing demand for low-latency smart home products is expected to drive the growth of the wired protocols segment throughout the forecast period.
By Application
The global smart homes systems market is categorized into new construction & retrofit based on applications. In 2023, the retrofit segment emerged as the dominant force, contributing the highest share to overall revenue, as homeowners favor retrofitting existing homes with smart products owing to logistical considerations & budget limitations, as well as the larger availability of these products fuels the growth of this segment.
Further, the new construction sector is predicted for the fastest growth during the forecast period. The ease of integrating smart home devices into ongoing construction projects is a major factor, as the growing number of global residential construction initiatives aligns with the rise in demand for smart homes, mainly with a focus on security & access features. The streamlined logistics associated with the deployment of multiple smart home products further incentivize owners of new construction projects to embrace this trend.
The Smart Homes Systems Market Report is segmented on the basis of the following:
By Product
- Security & Access Controls
- Lighting Control
- Entertainment Devices
- HVAC
- Smart Kitchen Appliances
- Home Appliances
- Smart Furniture
- Home Healthcare
- Others
By Protocols
- Wireless Protocols
- Wired Protocols
- Hybrid
By Application
- New Construction
- Retrofit
Regional Analysis
The Asia Pacific region commands the
largest market share at 33.2% in 2023 and is poised for continued growth in the forecast period, which is fueled by a higher standard of living & an increase in disposable income among individuals in the region. Further, the growing adoption of smartphones, internet connectivity, & other digitally advanced devices is expected to be a key driver of market growth. In addition, the increase in utilization of AI-based digital assistants like Siri & Alexa for everyday tasks significantly contributes to the region's market growth.
Moreover, in Europe, a steady growth trajectory is expected in the coming years, which can be attributed to the presence of major players in the region, like Schneider Electric SE, ABB, Siemens, and more. Also, factors like an improved standard of living, a high GDP, a technologically friendly population, & supportive government initiatives contribute to the flourishing smart home devices and technologies market in Europe.
By Region
North America
Europe
- Germany
- U.K.
- France
- Italy
- Russia
- Spain
- Benelux
- Nordic
- Rest of Europe
Asia-Pacific
- China
- Japan
- South Korea
- India
- ANZ
- ASEAN
- Rest of Asia-Pacific
Latin America
- Brazil
- Mexico
- Argentina
- Colombia
- Rest of Latin America
Middle East & Africa
- Saudi Arabia
- UAE
- South Africa
- Israel
- Egypt
- Rest of MEA
Competitive Landscape
The smart homes market is competitive, led by a few key players holding significant market share, as the industry is fragmented, major players are constantly expanding globally. These leaders give importance to strategic collaborations to boost market share & profitability and focus on enhancing their customer base both domestically & internationally, which highlights the dynamic nature of the market as companies work together to capitalize on opportunities & strengthen their positions.
In January 2023, Panasonic Holdings Corporation unveiled an advance hyperspectral imaging technology using compressed sensing developed in collaboration with Belgium's imec research institute & detailed in Nature Photonics, which allows accurate identification of subtle color variations. Further, it also boosts the accuracy of image analysis & recognition in standard color cameras, marking a major achievement in efficient hyperspectral imaging.
Some of the prominent players in the global Smart Homes Systems Market are:
- LG Electronics
- ABB
- Philips Lighting
- Schneider Electric
- Sony Corp
- Samsung Electronics
- Siemens
- Johnson Controls
- Delta Controls
- ADT
- Other Key Players
COVID-19 Pandemic & Recession: Impact on the Global Smart Homes Systems Market:
The COVID-19 pandemic & the subsequent economic recession have notably impacted the global smart home systems market. With lockdowns & financial uncertainties, consumer priorities switched, leading to a temporary halt in smart home adoption. Further, the recession created cautious spending, impacting the willingness to invest in smart home solutions. However, as people spend more time at home, the need for smart home technologies, that provide convenience & energy efficiency, highlights a gradual rebound.
Further, companies in the smart home industry adapted by aiming at affordability & essential features. The market also showcased resilience as remote work & higher awareness of home automation benefits drove a recovery in demand. Even after initial setbacks, the smart home systems market showed adaptability, responding to changing consumer needs in the middle of the challenging global landscape.
Recent Development
- In August 2023, Reliance Jio introduced Jio Smart Home Services, a game-changer in home appliance control, challenging tech giants Google & Apple. Further, they also unveiled Jio AirFiber for high-speed internet, utilizing 5G to overcome last-mile fiber limitations, which includes Smart Home devices, an entertainment Set-Top Box, & a dedicated Smart Home app, which is expected to transform the home experience in India.
- In January 2023, Schneider Electric announced its completion of the acquisition of AVEVA plc, supporting its advanced software capabilities to pioneer advanced automation solutions for residential, commercial, & building complexes, which is anticipated to significantly improve Schneider Electric's portfolio in the home automation sector, positioning them for significant growth in this market.
- In September 2023, Amazon took significant strides in home automation, introducing innovative Alexa experiences driven by generative AI. In addition, the company also unveiled the Echo Hub and Map View, providing novel methods to control devices, which highlights Amazon's commitment to improving user interactions and expanding the capabilities of its smart home ecosystem.
Report Details
| Report Characteristics |
| Market Size (2023) |
USD 107.2 Bn |
| Forecast Value (2032) |
USD 986.7 Bn |
| CAGR (2023-2032) |
28.0% |
| Historical Data |
2017 - 2022 |
| Forecast Data |
2023 - 2032 |
| Base Year |
2022 |
| Estimate Year |
2023 |
| Report Coverage |
Market Revenue Estimation, Market Dynamics, Competitive Landscape, Growth Factors and etc. |
| Segments Covered |
By Product (Security & Access Controls, Lighting
Control, Entertainment Devices, HVAC, Smart Kitchen
Appliances, Home Appliances, Smart Furniture, Home
Healthcare, and Others), By Protocols (Wireless
Protocols, Wired Protocols, and Hybrid), By
Application (New Construction and Retrofit) |
| Regional Coverage |
North America – The US and Canada; Europe – Germany, The UK, France, Russia, Spain, Italy, Benelux, Nordic, & Rest of Europe; Asia- Pacific– China, Japan, South Korea, India, ANZ, ASEAN, Rest of APAC; Latin America – Brazil, Mexico, Argentina, Colombia, Rest of Latin America; Middle East & Africa – Saudi Arabia, UAE, South Africa, Turkey, Egypt, Israel, & Rest of MEA
|
| Prominent Players |
LG Electronics, ABB, Philips Lighting, Schneider
Electric, Sony Corp, Samsung Electronics, Siemens,
Johnson Controls, Delta Controls, ADT, and Other Key
Players |
| Purchase Options |
We have three licenses to opt for: Single User License (Limited to 1 user), Multi-User License (Up to 5 Users), and Corporate Use License (Unlimited User) along with free report customization equivalent to 0 analyst working days, 3 analysts working days and 5 analysts working days respectively. |
Frequently Asked Questions
The Global Smart Homes Systems Market size is estimated to have a value of USD 107.2 billion in 2023
and is expected to reach USD 986.7 billion by the end of 2032.
Asia Pacific has the largest market share for the Global Smart Homes Systems Market with a share of
about 33.2% in 2023.
Some of the major key players in the Global Smart Homes Systems Market are LG Electronics, ABB,
Philips Lighting, and many others.
The market is growing at a CAGR of 28.0 percent over the forecasted period.