Rising Demand for Smart Home Technology Driven by Convenience, Security, and IoT Growth
The demand for the smart home market is expected to rise with the demand for convenience, security, and energy efficiency benefits. The elderly population's need for independent living support is also boosting adoption. As per the data of the United Nations Department of Economic and Social Affairs, the total number of populations aged above 65 globally is expected to get double compared to 2021. In 2021, the number of populations aged above 65 summed at 761 million, which is forecasted to get double and will be 1.6 billion in 2050. Also, as per the data, the population aged 80 or older is also growing at the same rate. Thus, the rising geriatric population is expected to boost the demand for the smart home market.
Also, as per the data of the World Economic Forum the smart speaker is considered as the most common smart appliance found in approximately over 130 million households whereas this figure is expected to surpass the mark of 335 million in the coming five years (2023-2028). Also, as per the statistics in the year the overall spending on Internet of Things products was registered at US$ 1.1 trillion in the year 2023. The Internet of Things is considered one of the most important factors in the growth of the smart home market as IoT-based options have been preferred due to energy-saving features. As the demand for IoT is expected to grow this will directly impact the demand for sensors, devices, and various other things that communicate via high-speed technology like 5G. Thus, the growing demand for IoT devices is expected to drive the smart home market.
Also, as per the data of the World Economic Forum the smart speaker is considered as the most common smart appliance found in approximately over 130 million households whereas this figure is expected to surpass the mark of 335 million in the coming five years (2023-2028). Also, as per the statistics in the year the overall spending on Internet of Things products was registered at US$ 1.1 trillion in the year 2023. The Internet of Things is considered one of the most important factors in the growth of the smart home market as IoT-based options have been preferred due to energy-saving features. As the demand for IoT is expected to grow this will directly impact the demand for sensors, devices, and various other things that communicate via high-speed technology like 5G. Thus, the growing demand for IoT devices is expected to drive the smart home market.
Role of HVAC and Security Concerns in Driving Growth in the Global Smart Home Market
Heating, ventilation, and air conditioning (HVAC) is considered to be a major segment that is expected to boost the global smart home market. Increasing consumer focus on energy efficiency and cost savings drives rising demand for HVAC products. As per the data of the U.S. General Services Administration in commercial buildings, cooling, space heating, and ventilation sum up to 44% of energy utilized on-site. Also, as per the data of the International Renewable Energy Agency, heating and cooling make up almost 50% of the global final energy consumption. It is considered the largest source of energy end use above all other industries, such as electricity and transport. Further, it is also expected that HVAC systems can attain energy savings of up to 45%. Advancements in technology improve efficiency, environmental friendliness, and reliability in climate control, while awareness of indoor air quality also boosts demand. Also, the use of smart home technology is used to automate household appliances and ensure convenience, safety, and security. A central interface manages lighting, security, temperature, and audio/video systems. Security is a top priority, with cutting-edge systems that alert homeowners to disturbances and provide surveillance. Access control systems play a crucial role in safeguarding homes. Home automation is increasingly popular due to its effectiveness in enhancing security measures.
Recent Trends in the Smart Home Industry:
- AI-powered assistants enhance voice control and personalized smart home interactions.
- Smart security systems offer real-time alerts and automated threat responses.
- Smart thermostats and lighting reduce energy consumption through adaptive algorithms.
- Automation simplifies daily tasks with personalized settings and schedules.
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Cyberattacks and Complex Installation Affect the Market Expansion
The growing threat of cyberattacks on high-end connected technologies is a major challenge to the market. With smart technology interconnected to various devices in homes, hackers can access personal information easily if security measures are lacking. Around 80% of IoT devices are at risk of online attacks, with even traditionally standalone devices like lights and locks facing new cybersecurity concerns. Also, smart devices relying on electricity may lose function during power outages, disrupting home automation and security. Network components can also be disrupted, affecting connectivity and cloud-based services and causing inconvenience during extreme weather. Furthermore, the smart home market also faces a major challenge regarding the installation, including technical expertise, communication protocols, compatibility issues, setup complexity, network stability, device placement, system integration, firmware updates, control customization, troubleshooting, inadequate documentation, and customer support, leading to frustration for many users. Updating older homes with smart home technology is difficult due to outdated electrical systems, limited wireless connectivity, and lack of infrastructure. Integrating modern devices while managing and finding skilled professionals is an additional challenge.
New Product Launch Fuels the Smart Homes Market
In January 2023, Matter was a new universal smart home protocol that promised to bundle compatibility with Amazon, Apple, Google, Samsung, and countless others within a single standard. That had all of the top smart home brands angling to be as Matter-friendly as possible, in one of the most obvious tech trends of CES 2023. That list included Samsung, which used the Las Vegas tech showcase as an opportunity to unveil a new Matter hub for its SmartThings line-up, complete with built-in wireless fast charging capabilities. Dubbed the SmartThings Station, the modest-sized, square-shaped hub hit stores in the US and South Korea in February. Pricing wasn't finalized just yet, but it was available in your choice of white or black, and ready to start wrangling your Matter-compatible smart home gadgets almost immediately after you took it out of the box and plugged it in. In January 2023, Shelly, a division of Allterco Robotics, unveiled eight new smart home automation devices at the 2023 Consumer Electronics Show (CES) in Las Vegas. Among them were a smoke alarm, an energy meter, and a Bluetooth device to control all other smart devices in the home. The Shelly Plus Smoke alarm could send a notification to a user’s smartphone if smoke was detected.
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Europe, North America, and Asia Pacific Presents as Lucrative Market
The demand for smart homes is expected to rise in the Europe region due to the rising demand for safety and convenience. As per the data of the European Commission, a total of approximately 30% growth per year was analyzed, and the total number of smart houses in France, Germany, and the United Kingdom was recorded at 84 million in the year 2022. Also, North America can be considered a lucrative market due to the rapidly rising HVAC industry. As per the data of the International Association of Better Business Bureaus, the HVAC industry in the United States has experienced a compound annual growth rate of 9.7% from the year 2018 to 2023. From US$ 90.3 billion in the year 2018, the market has reached new heights of US$ 123.2 billion for the year 2023.
Furthermore, Asia Pacific, especially China, is considered a lucrative market due to the rising shipments of smart home equipment, according to the data from China.org.cn China touched 260 million units in 2023, which is an increase of more than 17% year-on-year, and it is projected to reach the target of 540 million units by the end of 2025, generating a total revenue of US$ 109.6 billion for the Chinese economy. Furthermore, the rising geriatric population of China is expected to boost the overall demand for smart homes in the Asia-Pacific region. As per the data of the World Health Organization in 2019, a total of 254 million people were aged above 60 and over, whereas 176 million people crossed 65. As per the prediction, the geriatric population, or population above age 60, of China is expected to be 402 million, which will account for 28% of the total China population in 2040.
Furthermore, Asia Pacific, especially China, is considered a lucrative market due to the rising shipments of smart home equipment, according to the data from China.org.cn China touched 260 million units in 2023, which is an increase of more than 17% year-on-year, and it is projected to reach the target of 540 million units by the end of 2025, generating a total revenue of US$ 109.6 billion for the Chinese economy. Furthermore, the rising geriatric population of China is expected to boost the overall demand for smart homes in the Asia-Pacific region. As per the data of the World Health Organization in 2019, a total of 254 million people were aged above 60 and over, whereas 176 million people crossed 65. As per the prediction, the geriatric population, or population above age 60, of China is expected to be 402 million, which will account for 28% of the total China population in 2040.
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The report provides a detailed overview of the smart home market insights in regions including North America, Latin America, Europe, Asia-Pacific and the Middle East and Africa. The country-specific assessment for smart homes market has been offered for all regional market share, along with forecasts, market scope estimates, price point assessment, and impact analysis of prominent countries and regions. Throughout this market research report, Y-o-Y growth and CAGR estimates are also incorporated for every country and region, to provide a detailed view of the smart home market. These Y-o-Y projections on regional and country-level markets brighten the political, economic and business environment outlook, which are anticipated to have a substantial impact on the growth of the smart homes market. Some key country and region included in the smart home market report as follows:
| Regions | Countries |
|---|---|
| North America | United States, Canada |
| Latin America | Brazil, Mexico, Argentina, Rest of Latin America |
| Europe | Germany, United Kingdom, France, Italy, Spain, Benelux, Nordic Region, Russia, Poland, Rest of Europe |
| Asia Pacific | China, India, Japan, South Korea, Australia & New Zealand, ASEAN, Rest of Asia Pacific |
| Middle East and Africa | GCC Countries, South Africa, Turkey, North Africa Countries, East Africa Countries, Rest of MEA |
Smart Homes Market Research Report Covers In-depth Analysis on:
- Smart home market detailed segments and segment-wise market breakdown
- Smart home market dynamics (Recent industry trends, drivers, restraints, growth potential, opportunities in smart home industry)
- Current, historical and forthcoming 10 years market valuation in terms of smart home market size (US$ Mn), share (%), Y-o-Y growth rate, CAGR (%) analysis
- Smart home market demand analysis
- Smart home market regional insights with region-wise market breakdown
- Competitive analysis – key companies profiling including their market share, product offerings, and competitive strategies.
- Latest developments and innovations in smart home market
- Regulatory landscape by key regions and key countries
- Smart home market sales and distribution strategies
- A comprehensive overview of parent market
- A detailed viewpoint on smart home market forecast by countries
- Mergers and acquisitions in smart home market
- Essential information to enhance market position
- Robust research methodology
- Frequently Asked Questions -
What are the primary drivers of growth in the smart home market?
Key drivers include rising consumer interest in home automation, advancements in IoT technology and the increasing affordability of smart home devices.
What are the major trends shaping the smart home market?
Significant trends include the integration of AI for enhanced automation, increased focus on energy efficiency and the growing popularity of voice-controlled devices.
How do smart home devices impact energy consumption?
Smart home devices enhance energy efficiency by automating heating, cooling and lighting systems, leading to significant cost savings and reduced environmental impact.
