Smart Home Market

Smart Home Market Outlook 2032

The global smart home market size was USD 100.5 Billion in 2023 and is projected to reach USD 180 Billion by 2032, expanding at a CAGR of 10.2% during 2024–2032. The market growth is attributed to the rising internet penetration and lifestyle changes in emerging countries.

The capabilities of smart home gadgets are impacted by the global spread of 5G networks. The fifth generation of wireless technology, or 5G, is anticipated to outperform 4G networks by a factor of 10 to 50 in terms of speed. Thus, the rapid shift to 5G networks is anticipated to propel the smart home market during the forecast period. 
 
Increasing trend of incorporating AI in smart home devices is further boosts the demand for these products. The surging usage of the internet across the is significantly driving the demand for smart home products. Digital assistance combined with AI provides users with a hands-free and user-friendly experience, which significantly impacts the preferences of buyers.

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Impact of Artificial Intelligence (AI) on the Smart Home Market

The emergence of artificial intelligence propels the market. There are different types of smart home items, such as streaming devices, cameras, and lights, are available in the market. The demand for smart home devices is expected to rise due to the integration of AI into these devices for smart features.
AI-enabled hands-free smart devices are gaining popularity, as they automate tasks using voice commands. The increasing adoption of virtual assistants, such as Siri, Google Assistant, and Alexa, is boosting the market.

• In October 2022, Google added AI capabilities in its assistant to enhance voice typing, making communication easy for consumers.

Smart Home Market Dynamics

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Major Drivers

Increasing emphasis on energy efficiency to reduce carbon footprint drives the market. Advanced automated systems that users operate with laptops and cell phones are introduced. These systems feature monitors for temperature, lighting, security shields, and multimedia. Moreover, the rising demand for connected smart home products due to the growing penetration of smartphones and the internet boosts the market.

Rising awareness of smart home technology is projected to boost the market during the forecast period. Consumers are recognizing the capabilities of smart home devices, as they use controllers that are connected to various house subsystems, which create environmentally friendly and intelligent living spaces. 

Existing Restraints

Issues with device compatibility hinders the smart home market. The lack of standardization, disparate ecosystems, and communication protocols restrict consumer choices  and frequently lead to installation-related issues.

The primary barrier to market expansion is the increase in cyberattacks targeting high-end linked technologies. Smart home technology is vulnerable to cybersecurity risks. Smart home devices are connected to every device and system in the house. Thus, if these devices are not secured, they are prone to hacking.  

Emerging Opportunities

Rising development in smart home devices create immense opportunities in the market. Smart home market has grown significantly in recent years, offering a range of goods such as relays, sensors, and dimmers. These products are incorporated into home automation. Lighting controllers are automated with compliance of external communication protocols. It is anticipated that this development leads to a significant demand for these items, creating opportunities for manufacturers of smart home devices. Data-sharing services are made possible by the smooth communication between devices, as connected lighting systems are built on the Internet of Things.

LED-based systems required low energy and operating expenses along with control capabilities. The smart home market is undergone a transformation due to the integration of IoT and connection into lighting systems, which creates new opportunities in the market.

Scope of the Smart Home Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report.

Smart Home Market Segment Insights

Product Segment Analysis

On the basis of product, the smart home market is segregated into light control, security & access control, HVAC control, smart speakers, smart kitchen, entertainment, and smart furniture.

The security & access control segment held 28% market share in 2023. The segment growth is attributed to factors such as rising awareness of home safety due to the growing crime rates across the globe. Security and access control system enables organizations or businesses to manage who is authorized to access corporate resource and data. Rising incidence of data breaches propels the demand for smart security systems.
Smart locks and security cameras with features such as fingerprint scanners, configurable PINs, and live feed replay help keep an eye on things and grant access to only authorized users.

• In September 2022, Amazon introduced the Ring Spotlight Cam Pro, 2nd gen Ring Alarm Panic Button, and Ring Spotlight Cam Plus, which uses 3D motion detection and radar technology for security and access management.  
  

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Technology Segment Analysis

Based on technology, the smart home market is divided into wireless, wired, hybrid, and cellular. The wireless segment is anticipated to expand at a CAGR of 27% during the projection period. The robust expansion of wireless devices is driven by functionalities and features, including location-independent mobile connectivity, Wi-Fi, and Bluetooth. Protocols that provide easy communication and have little to no effect on battery life and ranges are preferred by manufacturers.

The cellular segment is expected to expand at a significant pace during the forecast period. The segment growth is attributed to the enhanced coverage, dependability, security, and scalability of cellular technology. 

Sales Channel Analysis

On the basis of sales channel, the smart home market is segmented into direct and indirect. The indirect segment is likely to hold a large share of the market during the forecast period. A significant portion of the smart home market is controlled by third-party service providers or indirect sales channels. Indirect sales channels are cost-effective, as intermediaries already have established marketing and sales teams. Furthermore, intermediaries provide valuable insights of the products that help consumers to make strategic decisions. Individual distributors, on the other hand, buy devices from a range of vendors to sell them to final consumers. 

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Software Analysis

Based on software, the smart home market is bifurcated into behavioral and proactive. The proactive segment is anticipated to hold a major market share during the projected period. Data on energy consumption is suitable option to apply and be transmitted to end-users with the help of proactive software and services. A large volume of data is transferred due to the rise of the proactive software as compared to behavioral versions. It gives end-users advice on how to utilize energy efficiently and suggest changes to physical parameters, such as temperature and humidity, that lowers energy use. 

Application Analysis

On the basis of application, the smart home market is segregated into new constructions and retrofits. The new construction segment is anticipated to expand at a CAGR of 28% during the projection period, as the integration of smart home appliances during the construction is convenient and simple. Furthermore, increasing development of residential projects boosts the adoption of smart security and access features, which is anticipated to propel the market in the coming years.

The retrofits segment is expected to hold a major share of the market during the forecast period, as homeowners retrofitting their current homes by installing one or more smart goods depending on logistics and price. The segment growth is further attributed to the rising renovation of corporate buildings at a rapid pace.

Regional Outlook

Based on region, the smart home market is fragmented into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in North America is anticipated to hold 44% market share in 2031 due to the availability of a wide variety of smart home products and systems. The increasing demand for energy-efficient home appliances, high rate of adoption of cutting-edge technologies, and the growing awareness of safety and security are anticipated to boost the market in the coming years. Furthermore, factors such as changing lifestyles, an increased reliance on smart gadgets, and growing security concerns propels the market in the region.

The ability of individuals to purchase expensive smart home gadgets due to rising consumer disposable income drives the market. However, high disposable income allow consumers to spend heavily on smart home automation systems. 

The smart home market in Asia Pacific is expected to expand at a CAGR of 28% during the forecast period owing to the increasing standard of living and increased disposable income. The rising adoption of smartphones and the rising penetration of the internet and other high-tech gadgets are expected to propel the market in the region during the forecast period.

• In 2022, the smart home security camera industry in India grew by 116% YoY. Moreover, home security camera sales increased by 7% in Q2 2022.

Key brands including Xiaomi and EZViZ focused on offline retail channels, which significantly expanded their client base. The demand for smart home management devices is growing due the rapid urbanization and the growing preference for comfortable and effective living spaces.

The market in the region is mainly driven by technological advancements, which make smart home gadgets appealing and accessible to customers through improved connectivity options and creative solutions. Government programs encouraging the use of smart home technology and raising consumer knowledge about their advantages are boosting the market.

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Segments

The smart home market has been segmented on the basis of

Product

• Light Control
• Security & Access Control
• HVAC Control
• Smart Speakers
• Smart Kitchen
• Entertainment
• Smart Furniture

Technology

• Wireless
• Wired
• Hybrid
• Cellular

Sales Channel

• Direct
• Indirect

Software

• Behavioral
• Proactive

Application

• New Constructions
• Retrofits

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Apple
• Amazon
• Google Nest
• Honeywell
• LG Electronics Inc.
• Philips Lighting B.V.
• Robert Bosch GmbH
• Siemens
• Schneider Electric
• Sony Group Corp.

Competitive Landscape

Key players competing in the global smart home market are Apple; Amazon; Google Nest; Honeywell; LG Electronics Inc; Philips Lighting B.V.; Robert Bosch GmbH; Siemens; Schneider Electric; and Sony Group Corp.

These companies use development strategies including mergers, acquisitions, partnerships, collaboration, and product launches to expand their consumer base worldwide. For instance,

• In January 2023, Apple introduced 2^nd Gen HomePod with breakthrough sound and intelligence. It delivers incredible audio quality, enhanced Siri capabilities, and a secure smart home experience.