Smart homes, often referred to as connected homes, have evolved significantly since their inception. Initially, they were primarily associated with automation and remote control of basic household functions. However, the industry has grown far beyond these rudimentary roots. Today, a smart home encompasses a network of interconnected devices and systems that can be controlled and monitored through a central hub or remotely via smartphones and other devices. The smart home industry has emerged as a transformative force, reshaping the way we interact with our living spaces. In recent years, rapid advancements in technology have given rise to a plethora of innovative devices and systems that are changing the way we manage our homes. From lighting and security to entertainment and energy management, the smart home industry has become an integral part of modern living, offering convenience, efficiency, and enhanced quality of life. The relevance of home monitoring in remote places, as well as the growing demand for energy-saving and low-carbon-emissions solutions will drive market expansion during the projection period. Integration of power line communication technology in smart houses, for example, provides market growth potential for the smart home industry. Cameras, smart lights, streaming gadgets, dishwashers, and other smart home items are available. The increasing trend of using Artificial Intelligence (AI) in smart home devices for smart features is projected to boost product demand. Furthermore, the global adoption of smartphones and the internet is boosting demand for linked smart home devices. Digital help combined with AI provides customers with a hands-free and more user-friendly deployment of smart devices, considerably influencing buyer preferences. According to the research report, “Global Smart Home Market Outlook, 2028” published by Bonafide Research, the market is anticipated to cross USD 295 Billion by 2028, increasing from USD 109.70 Billion in 2022. The market is expected to grow with 18.55% CAGR by 2023-28. Home automation and smart houses are two misleading words that refer to a variety of monitoring, controlling, and automating solutions for the home. Smart home systems, as opposed to simple home automation solutions (which could range from motorized garage doors to automated security systems), require a web portal or a smartphone application as a user interface to engage with an automated system. Globally, the growing necessity of addressing security issues is expected to drive demand for smart and connected homes over the forecast period. Furthermore, new wireless technologies such as security and access controllers, entertainment controls, and HVAC controllers are likely to drive market expansion. The rising disposable income of consumers, as well as their desire to better and update their quality of life, is driving the increasing demand for smart home equipment. Homeowners in the middle class are continually improving their houses by investing in smart home products such as dishwashers, washing machines, refrigerators, HVAC systems, security systems, and so on. This is the first step toward converting traditional homes into smart homes. Increased capital investment in developing and producing smart home goods is pushing down retail pricing and broadening the market's product line. As part of new developments, real estate developers are offering smart homes with high-end security systems, access controls, and waste management systems. In the construction and building sector, smart elements are becoming the new norm. As a result, the gradual transition to smart homes will auger well for future industry growth. Companies are always investing in new product ideas. Google's Nest smart-home division, for example, just released a new smart thermostat. The new Nest Thermostat is a simpler model than the Nest Learning Thermostat or Nest Thermostat E and is priced at USD 129.99, which is USD 40 less than the Nest E and USD 120 less than the top-of-the-line third-generation Nest Learning Thermostat. It was immediately available for pre-order. The growing popularity of virtual assistants such as Siri, Google Assistant, and Alexa allows users to automate tasks using voice commands. These digital assistants' developing functions, such as Bluetooth speakers and hands-free channel surfing, among others, are boosting demand for smart home products. For example, Google modified its assistant in October 2022 to include voice-input message typing as well as emoji support for user ease in texting. The growing use of current technologies such as the Internet of Things (IoT), blockchain, smart speech recognition, and artificial intelligence (AI) is having a significant impact on market growth. Smart speech recognition technology, for example, enables smart home appliances equipped with a microphone to identify users' voices and provide individualized responses. Similarly, rising IoT use in both developing and developed nations has contributed to the market's rise. The ability of technology to allow device communication has contributed to the growth of the smart home sector. The COVID-19 pandemic disrupted companies and hampered the production of smart home gadgets. People were obliged to stay at home due to strict lockdowns around the world. As a result, consumers turned to TV shows and movies for entertainment, causing a boom in demand for smart TVs and entertainment centers. Furthermore, the trend for smart houses grew as they provided automation in tasks that adhered to social distancing norms. Despite supply chain delays, the pandemic and its consequences exposed serious flaws in the digital device and internet infrastructure sectors. As supplies dwindled and production slowed, there were insufficient chips to sustain smart gadgets. This had an influence on the companies who make smart home goods. T-Mobile also revealed plans to offer a 5G-based home network by 2024. The goal is to expand coverage to formerly un-served rural areas throughout the United States. It is currently providing a trial version of the service on its 4G LTE network to a number of T-Mobile customers. North America is expected to hold the largest market share during the forecast period, the 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. The rapid technological advancements, along with the fast adoption of smart devices, are seen as a significant driving factor for the development of the smart home market in North America. Factors such as changing lifestyles, rising dependency on smart devices and increasing security concerns have fuelled the market’s growth in recent years. The market in North America is expected to maintain growth during the forecast period owing to the rising number of regional vendors in the smart home market. The substantial presence of significant players in this industry, including Crestron, Amx, Honeywell International Ltd., and Control4 Corporation, supports this expansion. Additionally, factors, including the rising use of fundamental communication technologies, such as Wi-Fi, Bluetooth, Zigbee, NFC, and the future 5G networks are promoting the market's expansion. In order to grow their business units globally, major corporations in this region are concentrating on engaging in smart mergers and acquisitions. Furthermore, the ecosystem for smart homes is growing quickly, and solutions are being created by existing solution providers. Through mergers and acquisitions and investments in cutting-edge technology, the major industry participants are diversifying their product offerings. The reversal in the smart home device market growth tendency is primarily due to companies normalizing their output following the COVID-19 epidemic in 2020 when the demand rose dramatically. The smart home industry in the US is expanding, owing to a growing desire for a comfortable and luxurious lifestyle, which can be achieved by adopting home automation. One of the important smart home market trends in the US that are predicted to have a favourable impact on the industry is the increased development of technologically advanced items. Based on the product type, the security & access control segment dominated the industry in 2022 and accounted for the highest share of the overall revenue during the forecast period. Based on the product type, the market is classified into security and access control, lighting control, entertainment system, HVAC control, smart speakers, smart home appliances, smart kitchen appliances, smart home healthcare systems, smart furniture and other controls (smart meter, smart plug, smart smoke detector and smart hub). Among them, security and access control segment is dominating the market in 2022. Security systems are increasingly in demand in the market for smart homes as a result of rising consumer demand for digitally connected products. Advanced security solutions are offered by gadgets like video assist doorbells and smart security cameras. IoT integration has made it simple to set up smart home security, allowing customers to operate lights, thermostats, heating systems, door locks, and lawnmowers via smartphone applications. With their excellent features and adaptable features, smart security cameras make it simple to monitor your house from anywhere. Additionally, DIY kits with smart security cameras are available. The user has the option to configure security alerts in accordance with his or her needs, pay a subscription fee for 24/7 expert monitoring of the smart home, and choose to call the fire and police departments in the event of an emergency. The expansion of the security and access control segment is attributable to the increased value placed on security and the requirement to limit access to areas or safes containing priceless commodities and objects. For instance, in January 2023, The EZVIZ Company launched EZVIZ C6N home security camera via Amazon. One of the most recent home security cameras from EZVIZ delivers two-way conversation and 360-degree coverage in FHD. The OEM claims that its Smart Night Vision, created to address some possible issues with its current IR-enabled competitors, sets it apart. Furthermore, rising awareness about self-healthcare after the Covid-19 pandemic is predicted to boost the home healthcare product segment during the forecast period. The wireless protocols segment is expected to grow at the highest CAGR over the forecast period attributed to the capabilities and features offered, such as mobile connectivity, connectivity regardless of location, and more by protocols namely, ZigBee, Wi-Fi, Bluetooth, Z Wave, and others. Wireless smart home devices offer convenient user interfaces, and cost reduction is another factor behind the rapid adoption of wireless devices across the globe. The rising trend of wireless communication is boosting the demand for wireless smart home devices in the market. Wireless smart home devices such as wireless Wi-Fi stations, charging pads, air purifiers, home theatre, Bluetooth speakers, HD security cameras, and numerous other products have increased consumer interest owing to the improved flexibility and easy installation process. Wireless protocols and standards are a critical segment of the smart home market as they enable devices from different manufacturers to communicate with each other seamlessly. Most smart home devices rely on wireless communication to interact with each other, and numerous wireless protocols and standards are available that cater to different needs and use cases. Some popular protocols and standards include Wi-Fi, Zigbee, Z-Wave, Thread, Bluetooth, and more. Each has its strengths and weaknesses, and homeowners must choose the protocol that best suits their requirements. Wireless protocols and standards are continually evolving, with newer technologies emerging to meet the demands of smart homes. The appropriate protocol selection is vital as it affects the compatibility, security, and performance of smart home devices. For instance, the ZigBee protocol provides longer battery life as it operates on lower latency and a low-duty cycle for instant device-to-device communication. On the basis of application, the new construction segment is expected to register higher revenue generation by 2028 due to the convenience and ease of installing smart home devices at on-going construction projects. An increasing number of new residential construction projects around the world is expected to augment the demand for smart homes following the trend of smart security and access features. Owners of new construction projects are also likely to install multiple smart home products as a result of the ease of logistics involved in fixing the devices. Homeowners prefer not to tear down any walls or tiles, and installation is done safely and effectively, which creates demand for smart home devices. Additionally, as smart security and access features become more popular, an increase in the building of new houses is anticipated to fuel the need for smart homes. Due to the convenience of fixing gadgets, owners of new construction projects are also inclined to install various smart home goods. Rising construction activities in developing countries are seen as another driving factor for the segment’s growth. The new construction segment within the smart home market is a rapidly growing sector with immense potential as builders and developers are beginning to see the benefits and demand of integrating smart home technology into new homes. With the increase in affordability and availability of smart home devices, consumers are looking for homes equipped with them as a standard feature. This has made it necessary for builders to offer smart home packages in their new homes; the options are numerous, from security systems to lighting control. This segment is expected to grow significantly in the coming years, with technology and home automation becoming a standard in new home construction. Based on sales channels, the global smart home market is segmented direct and indirect. The indirect sales channel segment will dominate the global smart home market during the forecast period. The rising spending on online shopping is one of the significant factors behind the growth of the indirect sales channel segment. The indirect sales channel segment carries out the company's distribution tasks. Indirect distribution relieves the manufacturer of some initial expenses and duties that could reduce the amount of time needed for business operations. Additionally, an indirect distribution route can be considerably easier to manage than a direct distribution channel with the correct vendor relationships. The indirect sales segment in the smart home market includes partnerships, dealerships, distributors, and resellers. The growth in demand for smart home devices and systems drives the expansion of the indirect sales segment in the smart home market. The partnership between manufacturers and technology companies also plays a significant role in developing indirect sales. Distributors and resellers help manufacturers to reach a wider audience, while dealerships provide customers with the opportunity to get hands-on experience with the devices before making a purchase. Indirect sales channels can also assist with after-sales services like installation and maintenance. The indirect sales segment in the smart home market provides manufacturers more opportunities to expand their business and reach new customers. However, a business that makes direct consumer sales organizes and controls a direct distribution channel. In the direct sales channel segment, the business handles all parts of delivery internally (rather than using vendors). It is entirely in charge of making sure that customers successfully receive their orders. The direct sales channel might be more expensive to set up and involve more labour. In fact, they might necessitate substantial capital expenditure. It is necessary to set up warehouses, logistics programs and delivery personnel. Based on the software and services, behavioural segment is dominating the smart home market due to their ability to provide personalized, convenient, and efficient solutions. Behavioural software and services are designed to adapt and respond to the individual preferences and routines of homeowners. This personalization enhances the overall convenience of smart homes. Devices and systems that learn from user behaviour can automatically adjust settings, such as lighting, temperature, and security, based on the homeowner's habits, reducing the need for manual interactions. This personal touch creates a more user-friendly and tailored experience. One of the most significant drivers of the adoption of smart home technology is energy efficiency. Behavioural software and services play a crucial role in optimizing energy consumption by analysing usage patterns and making intelligent adjustments. For example, a smart thermostat can learn when residents are typically at home and adjust the temperature accordingly, resulting in energy savings. This not only benefits homeowners by reducing utility bills but also contributes to environmental sustainability. Smart homes equipped with behavioural software and services can predict when devices or appliances may need maintenance or replacement. These systems can detect anomalies in usage patterns and performance, allowing homeowners to address potential issues before they become costly problems. This predictive maintenance aspect adds value to the smart home ecosystem, ensuring the longevity and reliability of connected devices. Behavioural software and services make home automation more accessible to a broader audience. Traditional automation systems may require complex programming and setup, which can be intimidating for some users. Behavioural systems, on the other hand, are designed to adapt and respond to user behaviour without the need for extensive configuration. This user-friendly approach encourages more people to embrace smart home technology. Many behavioural systems leverage machine learning and artificial intelligence (AI) to continuously improve their understanding of user behaviour. As these technologies advance, the capabilities of behavioural software will only become more sophisticated, making them even more valuable in the smart home context. Market Drivers • Convenience and Comfort: Consumers are increasingly seeking convenience and comfort in their daily lives. Smart home technology offers a wide range of features and automation that simplify daily tasks and enhance comfort. For instance, smart thermostats can learn a homeowner's temperature preferences and adjust accordingly, ensuring a comfortable environment. Voice-activated virtual assistants, such as Amazon's Alexa and Google Assistant, allow users to control various aspects of their homes with simple voice commands, making it easier to manage tasks and access information. • Energy Efficiency and Sustainability: The rising awareness of environmental concerns and the need for energy conservation are driving the adoption of smart home technology. Smart devices and systems, like smart thermostats and energy-efficient appliances, enable homeowners to reduce their energy consumption and lower utility bills. This not only provides economic benefits but also aligns with the global trend towards sustainability and environmental responsibility. Governments and organizations worldwide are promoting energy-efficient practices, further incentivizing the adoption of smart home technology. Market Challenges • Privacy and Security Concerns: The collection and transmission of sensitive personal data by smart home devices give rise to privacy and security concerns. Hackers could potentially exploit vulnerabilities in these devices to gain unauthorized access to a user's home or compromise their personal information. Ensuring robust security measures, such as strong encryption and regular software updates, is critical to address these concerns and maintain consumer trust in smart home technology. • Interoperability Issues: The smart home market is filled with a variety of devices and systems from different manufacturers, often using different communication protocols and standards. This lack of interoperability can create challenges for consumers who wish to create a seamless and integrated smart home experience. It can lead to frustration and additional complexity during the setup and maintenance of smart home systems. Industry efforts to standardize communication protocols and improve compatibility are essential to overcome these challenges. Market Trends • Sustainable Living: Sustainable living is a global trend that is extending into the smart home domain. Smart home technology is being leveraged to reduce energy consumption, minimize water wastage, and manage waste more efficiently. Solar panels, energy storage systems, and eco-conscious appliances are becoming more popular among environmentally conscious consumers. This trend aligns with the global commitment to environmental sustainability and reducing the carbon footprint. • Smart Cities Integration: The concept of smart homes is expanding to integrate with the broader idea of smart cities. As urbanization continues, smart home technology is being integrated into urban planning and infrastructure to create more efficient and sustainable urban environments. This trend encompasses smart transportation systems, energy management, connected public services, and data-driven urban planning. The goal is to create more livable, efficient, and sustainable cities. Covid-19 Impacts The COVID-19 pandemic has had a significant impact on the smart home industry. With lockdowns and social distancing measures in place, people have spent more time at home, leading to increased interest in smart home technology. The demand for smart home devices, such as video doorbells, smart security systems, and remote-controlled appliances, surged as homeowners sought to enhance their comfort, security, and convenience while adapting to the new normal. Remote work and the need for reliable home offices also accelerated the adoption of smart home solutions. However, supply chain disruptions and economic uncertainties affected manufacturing and affordability, impacting some consumers' ability to invest in smart home upgrades. Despite these challenges, the pandemic highlighted the value of smart homes in meeting evolving lifestyle needs, paving the way for continued growth and innovation in the industry. Competitive Landscape The key players use strategies, such as partnerships, acquisitions, ventures, innovations, R&D, and geographical expansions, to solidify their industry position. Companies are also focusing on improving their product offerings to better suit the changing needs of users to stay competitive. For instance, in August 2022, Amazon.com, Inc. launched its wall echo, sound bot, wall echo, and home robot as part of the company’s yearly model upgrade. The launch is expected to be in line with the company’s aim to counter upcoming competitive companies. Key companies are investing substantial capital in ventures, development, and research in modern technologies. For instance, in January 2022, Samsung Electronics Co., Ltd. partnered with Oracle Corp. to develop smart energy solutions for its customers and combine Oracle’s contextual and behavioural energy insights with Samsung’s SmartThings products and automation services. This partnership is aimed at providing new and valuable features in their product offerings. Key players are also developing additional capabilities for smart home products to support their use in new construction homes as well as retrofit home fitments. Major market players include Honeywell International, Inc., Siemens AG, Schneider Electric SE, ADT Inc, ABB, Samsung Electronics Co., Ltd., Johnson Controls International PLC, Assa Abloy AB , General Electric Company , LG Corporation, Robert Bosch GmbH, Signify N.V, Xiaomi Corporation, Amazon.com, Inc. , Creston Electronics, Inc, Legrand, Apple Inc., Sony Group Corporation, Ecobee and Whirpool Corporation etc. Key Developments • In January 2023, giant tech company Apple announced to step into the smart home application market. Apple is developing a smart display for the home that includes a magnetic wall attachment and can be used to adjust the thermostat and turn on and off lighting. According to reports, it will also offer FaceTime functionality. • In January 2023, At the Consumer Electronics Show (CES) 2023, Shelly, a division of Allterco Robotics, Ltd., announced the arrival of 8 new smart home automation devices. The eight new Shelly devices include smart home automation options in the Shelly Pro and Plus series, which provide cutting-edge and smart features for both professional installers and do-it-yourself (DIY) homeowners. • In January 2023, Amazon announced support for the new global wireless smart home standard, Matter, which aims to make your connected life simpler. • In January 2023, Eve Systems, a manufacturer of smart home accessories, announced the release of its products with Matter compatibility built in. Eve Energy smart plug, Eve Motion and Eve Door and Window sensors are a few products among them. The new Eve accessories are compatible with Apple HomeKit, Amazon Alexa, Google Home, and Samsung SmartThings, and all three will be shipped to the US in March 2023. Considered in this report • Geography: Global • Historic year: 2017 • Base year: 2022 • Estimated year: 2023 • Forecast year: 2028 Aspects covered in this report • Global Smart Home market Outlook with its value and forecast along with its segments • Region & Country-wise Smart Home market analysis • Various drivers and challenges • On-going trends and developments • Top profiled companies • Strategic recommendation Regions & Countries covered in the report • North America (United States, Canada, Mexico) • Europe (Germany, United Kingdom, France, Spain, Italy, Russia) • Asia-Pacific (China, Japan, India, Australia, South Korea) • South America (Brazil, Argentina, Colombia) • Middle-East & Africa (UAE, Saudi Arabia, South Africa By Product • Security and Access Control • Lighting Control • Entertainment System • HVAC Control • Smart Speakers • Smart Home Appliances • Smart Kitchen Appliances • Smart Home Healthcare Systems • Smart Furniture • Other Controls (Smart Meter, Smart Plug, Smart Smoke detector, Smart hub) By Protocols • Wireless Protocols • Wired Protocols • Hybrid Protocols By Application • New Construction • Retrofit By Sales Channel • Direct • Indirect By Software & Services • Behavioural • Proactive The approach of the report: This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources. Intended audience This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the Smart Home industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.
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