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The global smart home market size was valued at USD 80.21 billion in 2022 and is projected to grow from USD 93.98 billion in 2023 to USD 338.28 billion by 2030, exhibiting a CAGR of 20.1% during the forecast period.
The increasing number of internet users, growing disposable income of customers in developing economies, rising importance of home monitoring in remote areas, and growing need for energy-efficient and low-carbon emission solutions are anticipated to propel the market growth. A smart home is an automated home setup that includes a wide range of products such as smart lighting, home security, smart appliances, smart entertainment, and others.
Surge in Adoption of Home Automation Amid COVID-19 Pandemic to Boost Market Growth
Home automation business has grown rapidly, and this trend was aided in part by COVID-19 and the fact that people were forced to spend more time in their homes owing to lockdown restrictions. As a result, more vendors entered the industry. The market now covers a wide variety of midrange and entry-level, low-cost home automation products, the availability of which increased due to more businesses entering the market and higher online sales.
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Increasing Deployment of Energy-efficient and Interoperable Smart Home Systems to Propel Market Growth
Interoperable smart devices are those designed to work together and communicate with one another, regardless of the manufacturer or brand. Demand for the creation of a smart home ecosystem, where all the devices work seamlessly together, without any need for additional programming or setup, is increasing. This is achieved by the implementation of communication protocols including Wi-Fi, Zigbee, and Matter, among others.
Companies are also deploying smart devices that use less energy without compromising on their functionality. These devices are integrated with energy-efficient components such as LEDs, low power processors, and power saving techniques, among others. For instance, in April 2021, Wozart Technologies, a provider of home automation devices, launched affordable smart devices such as smart lighting, gates, curtains, and sensors, among other products, which helped their consumers save energy while maintaining functionality.
High Adoption of Internet of Things (IoT) Solutions to Boost Market Expansion
The Internet of Things (IoT) platform is one of the most significant drivers of the market. At home, IoT-based equipment provides energy-saving features. According to GSMA Intelligence, IoT connections are expected to reach approximately 25 billion globally by 2025, up from 10.3 billion in 2018. This factor shows that within some years, there will be massive clusters of sensors, devices, and things that will communicate through high-speed technology such as 5G. Such a growing proliferation of IoT devices is likely to drive the market toward a higher growth trajectory.
Key firms are concentrating their efforts on the development of IoT platforms and related technologies (machine learning, artificial intelligence, and so on) that may be employed in smart appliances. This factor is predicted to expand the global market in future.
Security Threats to Hamper Market Growth
The significant obstacle to the market expansion is the rising risk of cyberattacks in high-end connected technologies. Smart home technology faces several security threats from all the connected endpoints. As intelligent technology is connected to every system and device in the home, hackers can gain confidential personal information if it is not secured properly. According to Rambus Incorporated, a designer, developer, and licenser of chip interface technologies, approximately 80% of IoT devices are vulnerable to online assaults. Connecting historically "standalone" smart devices, such as lights, appliances, and locks, clearly brings a lot of new cyber security concerns. Even connected baby monitors are vulnerable to digital intruders, as many frightened parents discovered after hackers communicated with their young children via a hacked device. This factor is expected to hamper the market growth during the forecast period.
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Rising Wireless Communication and Cellular Technology Adoption to Support Market Growth
Based on device type, the market is classified into safety & security devices (garage door operators, hazard detectors, security camera, video doorbell, electronic smart locks, & intruder alarms), energy & water control (irrigation, smart water/temperature sensors, and air quality devices), climate control (smart fans, smart radiator valves, smart thermostat, and air conditioners), lighting control (lighting, plugs/switches, and blinds/shades), and consumer electronics (home audio, appliances, and health/fitness devices).
Amongst them, the consumer electronics segment is projected to hold the largest market share during the forecast period due to increasing deployment of smart assistants and speakers. However, the energy and water control segment is expected to record the highest CAGR, owing to smart appliances being convenient rather than need-based devices.
Increasing Adoption of Apartments and Multifamily Dwellings to Support Market Growth
Based on housing type, the market is bifurcated into single family dwelling and multi-family dwelling. Single family dwelling refers to a residential unit that is separate from other units, typically constructed on a plot of land that is larger than the actual building. This creates a larger open area around the house. Whereas, multifamily housings encompass apartments, flats, villas, condos, terraced housing, high-rise apartments, and semi-detached housing units.
Amongst them, the multi-family dwelling segment is expected to hold a sizable market share and register the highest CAGR during the forecast period due to wide availability of latest technological products and constant network connection.
North America Smart Home Market Size, 2022 (USD Billion)
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In terms of regions, the market is classified into North America, Asia Pacific, Europe, the Middle East & Africa, and Latin America.
North America is expected to hold the largest market share during the forecast period. This growth is backed by the strong presence of major players, including Amazon Inc., Apple Inc., Honeywell International Ltd., and Sony Corporation, operating in this market. Also, factors, such as increasing adoption of core communication technologies, Wi-Fi, Bluetooth, Zigbee, Matter, NFC, and the upcoming 5G network, are boosting the market growth in the region.
Key companies in this region are focused on entering into strategic mergers and acquisitions to expand their business units worldwide.
Furthermore, the smart home ecosystem is rapidly expanding, and existing solution providers are producing advanced technologies for the same. The major players in the market are expanding their product portfolios through mergers and acquisitions and by investing in cutting-edge technologies.
In Europe, the market growth is being driven by the expansion of small businesses and increased investment by major corporations in nations such as the U.K., France, Germany, and others. The growing need for smart security and monitoring systems in this region is fueling the market progress. These factors will aid in the market's development.
Asia Pacific is predicted to exhibit the highest CAGR during the projection period. The increasing demand for automation solutions from residential applications is anticipated to drive the market growth in this region. The region's leading companies are focusing on collaborating with other well-known firms to create and deploy innovative smart devices.
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The MEA and South America markets are likely to grow at a prominent rate. Governments and local players are also increasing their initiatives and investments. According to a study conducted by Ciena in June 2021, more than half of adults in Saudi Arabia (57%) and the UAE (54%) believed the future of smart appliances would be driven by increasing adoption of energy-efficient appliances. A vast number of people in both the countries (94% in each) were considering conducting more virtual activities to decrease their carbon impact. In addition, the adoption of smart home systems and consumption of control devices is on the rise (40% in the UAE and 46% in the KSA). As a result of these smart home market trends, metro and edge networks are being used to meet the ever-increasing demand.
Key Players Focus on Developing Advanced Security and Energy Usage Monitoring Solutions
The major players in the market are Emerson Electric Co., Honeywell International, Schneider Electric S.E., and Samsung Group, amongst others. These corporations are heavily investing in R&D to give advanced products and services to their clients. For instance,
An Infographic Representation of Smart Home Market
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The research report includes a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides, it offers insights into the latest market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
2019 – 2030
2023 – 2030
2019 – 2021
CAGR of 20.1% from 2023 to 2030
Value (USD billion)
By Device Type, Housing Type, and Region
By Device Type
By Housing Type
According to Fortune Business Insights, the global market is projected to reach USD 338.28 billion by 2030.
In 2022, the market value stood at USD 80.21 billion.
The market is projected to grow at a CAGR of 20.1% during the forecast period of 2023 – 2030.
Consumer electronics dominated the market in 2022.
Increased adoption of Internet of Things (IoT) solutions to boost market expansion.
Some of the top players in the market are Amazon Inc., Johnson Controls, Apple Inc., and Honeywell International Inc.
North America dominated the market due to higher IoT implementation, thereby fueling the adoption of smart home appliances.
By device type, energy and water control segment is expected to show the highest CAGR during the forecast period.
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