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The global home automation market size was USD 64.58 billion in 2020. The market is projected to grow from USD 72.30 billion in 2021 to USD 163.24 billion in 2028 at a CAGR of 12.3% during the 2021-2028 period. The products considered in the scope includes Control4 Smart Home OS 3, Legrand Lighting Management, Honeywell Security System, Savant Pro Remote X2, Johnson Hx Thermostat and more. The global impact of COVID-19 has been unprecedented and staggering, with home automation witnessing a significant impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 11.9% in 2020 compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Home automation systems control and monitor home operations with connected smart devices and appliances. These innovative smart devices offer safety, convenience, efficient energy saving, lower utility cost products and more to the users worldwide. The increasing adoption of internet of things technology is expected to boost home automation market growth. Similarly, growing home ownership by millennials and increasing disposable income among people in developed countries is estimated to drive automated home demand. Further, key market players are also focused on offering advanced solutions in order to improve the efficiency and convenient home management. For instance, in February 2020, Resido launched a single platform Home App to control and monitor entire home operations such as air quality, HVAC, security among others.
Stay-at-home Restrictions to Push Automation System Demand Amid COVID-19
Temporary closure of manufacturing plants and later limited presence of staff impacted the production quantity across industries. During the initial months of the year 2020, the home automation devices and products witnessed a significant fall in their production along with an unstable supply chain. Also, the spending share on smart devices was reduced owing to the unpredictable economic crisis. This has negatively affected the growth and year-on-year growth witnessed a dip during the year 2020.
However, the stay-at-home restrictions to curb the virus spread pushed the market demand steadily. As per the key experts of the market, this has boosted the demand for efficient home energy-saving smart devices to monitor energy consumption and reduce utility bills. Similarly, it resulted in rising demand for smart TV, smart set-top boxes, streaming sticks with voice commands, and more. Various market players witnessed a rise in demand for voice control smart home devices as the stay-at-home period prolonged worldwide owing to increasing cases.
With these voice command capabilities, people were able to reduce contact with commonly touched areas in the house such as door handles, door bells, TV remotes, light switches, and more. Similarly, to reduce face-to-face interaction and boost home safety, the adoption of smart doorbells with voice control, video cameras, facial recognition and more are increasing during pandemics. Thus, in the long term, the COVID-19 pandemic restriction is expected to boost the home automation market share.
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Growing Innovative Property Security System to Propel Market Growth
The automation industry for its flexible and high precision management is being highly adopted for lodging management. Among these, the security system is a rapidly developing sector. The key home automation players are investing significantly to develop innovative and advanced smart security systems catering to property safety. For instance,
Thus, various such innovative security applications are now available. Similarly, the adoption of smart doorbells with audio and video, AI-based biometric, and face recognition capabilities is increasing. Honeywell Inc. also offers a face recognition integrated camera for self or kids activity monitoring. Thus, these increasingly advanced security solutions for homes is estimated to boost the market growth.
Customer’s Growing Interest in Smart Home Technology to Drive Market Growth
Smart technology is growing exponentially across industries. Smart property technology is significantly exploring and transforming the home automation system. Earlier, automation was signified as controlling devices and appliances through internet networks. However, with the introduction of smart technology such as self-diagnosing devices, smart security, smart entertainment, advanced self-health care, smart kitchen among others, automation is getting smarter.
The integration of advanced technologies such as the internet of things (IoT), artificial intelligence, machine learning, and more through smart devices to drive the automation capabilities. As per the Voicebot.ai survey, in January 2020, nearly 87.7 million U.S. customers were using smart speakers. This significant rise in the adoption of smart speakers indicates users' shifts towards automating the operation through voice commands. Similarly, the increasing implementation of smart lodging functionalities such as smart TV, light automation, face recognition doorbells, smart cookware, smart nursery, automated sprinklers, video monitoring, and more are expected to drive the property automation market growth.
Expensive Products and Limited Clarity Regarding Technology to Hamper Market Growth
The automation products, tools, and appliances are expensive. Users with limited disposable income find it difficult to relate to the automation solution and to its necessity. Owing to this high cost, it is being adopted by certain groups in the market. Also, currently, the prices of smart devices are on a higher end in the market. Further, this cost barrier is expected to be witnessed in developing countries in comparison with the advanced ones. This is likely to barricade its mass adoption. Similarly, these users are unclear regarding its application, usage, and overall benefits. The maximum of users majorly using it for entertainment and voice commanding purposes. Thus, the complicated techniques and applications are expected to hamper the market growth.
Increasing Innovative Smart Devices to Boost Product Share
On the basis of components, the market is bifurcated into products and services. The product is further classified into security & safety, HVAC, wellness monitoring, smart appliances, smart entertainment, smart lighting system, and others.
Similarly, services are categorized into consulting, installation or implementation, and support and maintenance.
Product is expected to dominate the market segmentation share and is also projected to grow at highest CAGR owing to the increasing development and production of smart home tools and devices. Key players are offering such innovative product portfolios to improve and enhance the systems. Some of the key products considered in the report are ABB door entry system, Honeywell air cleaner, Legrand modular switches, Crestron flex care among others.
Amongst products, security and safety are expected to gain maximum segment share as it helps in remotely monitoring solutions. The increasing number of smart cameras, doorbells, smoke/gas detectors, theft alarms and more are likely to drive security and safety systems. Similarly, the demand for HVAC is growing as it offers smart monitoring of climate along with energy-efficient solutions. Smart lighting is anticipated to gain steady growth of the market during the forecast period as many lighting providers are now entering the automation market with innovative lighting applications. Also, with the growing tight schedule of professional life, the demand for smart appliances is increasing among the consumers.
Services are expected to grow steadily. The complexity and highly technical smart system are expected to drive installation or implementation demand. Similarly, support and maintenance are to gain demand to upkeep the smart devices and their connection.
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Affordable Program Designing Solution to Boost Cloud-based Demand
Based on network technology, the market is categorized into wired, wireless, and power line-based.
Wireless network technology to gain maximum revenue share along with rapid growth during the forecast period. It’s open technology offers customization capabilities and can operate multiple devices at same time. Today, wireless network connections are smarter options to manage smart property systems. Some of the products that work on wireless networks include Google Home Hub, Samsung Smart Things, Apple Homekit among others.
Wired network technology ranks second in revenue share after wireless for home automation solutions. It offers strong security points against hackers as compared to wireless networks. Also, its high reliability is the major factor for its adoption for automation. Power line-based is likely to grow steadily during the forecast period owing to its low cost communication network.
North America Home Automation Market Size, 2020 (USD Billion)
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North America to Dominate Market due to Higher Disposable Income
In terms of geography, the market is segregated into five prime regions namely- North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further segmented into nations.
North America is projected to emerge as a dominant region during the forecast period. The region's inclination towards advanced technologies such as artificial intelligence and the internet of things along with higher disposable income drive the demand for smart technologies. Various startups such as Boca Raton, Sense, CUJO AI among others are emerging in the region and are contributing to the market growth. As per the Berg Insight report, the smart property system installation in North America increased by 28.5% in the year 2019.
Asia Pacific is expected to witness rapid growth during the forecast period owing to increasing investment in smart technologies. China to dominate the region's share owing to the dominant presence of key smart device manufacturers. India to gain rapid CAGR during the forecast period owing to increasing demand for automated solutions. For instance, considering the growing user interest and to offer ease of access to the home solutions, in April 2021, Schneider Electric collaborated with India-based home renovator, Livspace.
Europe ranks second in market dominance and has lower market penetration as compared to North America. The region has witnessed significant growth in strong market players over the years. Considering its sustainable environmental impact and energy-efficient solution various government policies are including the adoption of smart lodging technologies in European countries.
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The Middle East and Africa is expected to witness steady demand for home automation with the growing 5G technology penetration. Similarly, Latin America is gaining steady growth and showcasing market opportunities with the growing smart home market.
Focus on Product Innovation to Boost Market Position of Key Players
Key players for home automation industry are strategically investing in enhancing the user experience with their advanced and innovative automation solutions. From smart lighting to other functionalities, these players are offering a wide scope of product portfolios to the customers. In order to gain expertise and expand customer reach, key players are acquiring small and local dominant solution providers. Similarly, expansion in product offering and geographical presence through partnership and collaboration is set to boost the market share of these players.
April 2021 – Crestron Electronics launched a touch screen smart thermostat, Horizon Thermostat, with two-wire retrofit design. Its integration with Crestron Home platform offers smart automation capabilities such as optimal comfort lighting effects, suitability, along with energy savings.
March 2020 – ABB Ltd. launched a [email protected] flex solution with new control on lights and blinds through mobile devices via its app and bluetooth connection. The new solution offers smart applications with improved energy efficiency.
An Infographic Representation of Home Automation Market
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The market research report highlights leading regions across the world in order to offer a better understanding to the user with home automation industry analysis. Furthermore, the report provides insights into the latest industry as well as market trends and analyzes technologies deployed at a rapid pace at a global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.
Value (USD billion)
Component, Network Technology, and Geography
By Network Technology
The market is projected to reach USD 163.24 billion by 2028.
In 2020, the market size stood at USD 64.58 billion.
The market is projected to grow at a CAGR of 12.3%
Product is likely to lead the market.
Advancment in IoT technology is expected to drive market growth.
ABB Ltd., Johnson Controls International plc, Crestron Electronics, iemens AG, Control4 Corporation, Schneider Electronics, Koninklijke Philips N.V among others are the top players in the market.
North America region is expected to hold the highest market share.
Asia Pacific is expected to grow with the remarkable CAGR.
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