Smart Home Category, Part 2

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Part
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Smart Home GlobalMarket Size

The global smart home industry was worth $76.6 billion in 2018 and there are about 144.4 million smart homes in the world. The proliferation of smart devices and increasing high disposable income are some factors driving the industry.

MARKET SIZE

  • The global smart home industry is valued at $76.6 billion in 2018 according to Markets and Markets.
  • The industry is expected to reach $151.4 billion by 2024 at a cumulative annual growth rate of 12.02%.
  • According to Statista, there are 144.4 million smart homes in the world with a year-on-year growth of 35.2%.
  • The smart home penetration rate in the world is currently 7.7%, which is expected to reach 18.1% by 2023.
  • International Data Corporation (IDC), there will be 832.7 million shipments of smart home devices in 2019 and is expected to reach 1.6 billion devices by 2023.

MARKET OVERVIEW

  • According to Mordor Intelligence, the smart home industry is relatively fragmented, and the top five players in the industry are ABB Ltd., Schneider Electric SE, Honeywell International Inc., Emerson Electric Co., and Siemens AG.
  • North America represents the largest market and equally the fastest growing market in the smart home industry.
  • Factors driving the growth of the industry include the proliferation of smart devices, increasing high disposable income in developing countries, and "rise in the need for energy- saving and low carbon emission solutions."
  • Video entertainment (43%) is the category with the biggest market share, followed by smart speakers (17.3%), and home monitoring/security (16.8%).
  • The fastest growing segment, according to Inkwood Research is the energy management segment and is rising steadily due to "an increase in electricity costs across the globe and other environmental issues."




Part
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Part
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Smart Home Technology Market Leaders: Smart Thermostats

Nest Labs, Ecobee, Honeywell, Emerson Electric, and Alarm are five market leaders in the US smart thermostat industry. Below are more information about each of these companies.

1. NEST LABS

  • Nest Labs developed the Nest Learning Thermostat, a smart thermostat based on a machine learning algorithm. Users have to manually regulate the thermostat in the first few weeks so the device can have a reference data set. From this data set, the device can learn the user's schedules and their temperature preferences. It can also shift into energy-saving mode when it senses that nobody's home.
  • Nest is the market leader in the smart thermostat industry in the US, holding 73% of the total amount of money spent on smart thermostats in the country. In 2017, the sales revenue of connected thermostats in the US reached $363 million, which means Nest Labs made about $265 million (73%) from Nest Learning thermostats that year alone.

2. ECOBEE

  • Ecobee just unveiled their all-new SmartThermostat with voice control, state-of-the-art SmartSensor, and enhanced energy saving features. The company claims that users can save up to 23% on their heating/cooling costs annually. The device's SmartSensor detects both occupancy and temperature, and it works with Apple HomeKit, Alexa Built-in Google Assistant, SmartThings, and IFTTT.
  • The company holds 17% of the total smart thermostat revenue in the US. In 2017, it made approximately $61.71 million (17% of the total industry revenue of $363 million).

3. HONEYWELL

  • Honeywell Wi-Fi Smart Thermostat is a programmable thermostat that has a user-friendly large touchscreen interface and simple companion smartphone app. However, its automatic scheduling feature is limited to the built-in questionnaires that help the device learn the user's preferences. In addition, it does not have a motion sensor to let the system know if the user is home outside his/her usual schedule.
  • The company holds less than 10% if the total market revenue. In 2017, it made less than $36.3 million (<10% of the total US smart thermostat revenue of $363 million) from their smart thermostats.

RELEVANT FINDINGS

EMERSON ELECTRIC

  • Emerson Electric has introduced the new 'Sensi Touch Smart Thermostat' as part of its latest product offerings in the smart thermostat space. The device has a colored touchscreen display and sleek design, and it is compatible with popular smart home management platforms, like Apple HomeKit, Amazon Alexa, and Wink. The product enjoys an Energy-Star Certification, which is an official endorsement of the product's energy-saving and cost-efficient benefits for consumers.
  • The company generated $8.6 billion in the US and Canada in 2018; however, it did not disclose any revenue specifically from the smart thermostat products.

ALARM.COM

  • The company's smart thermostat combines elegant design, sophisticated cloud services, and advanced energy management features. The device was designed by the company's Building 36 and device engineering teams to work in concert with other devices in the connected property. The thermostat can be paired with remote temperature sensors and enables temperature set points for any room in the property, not just the room where the thermostat is installed. The device can be easily installed and remotely supported.
  • Alarm.com's 'hardware & other revenue' segment generated $129.4 million in revenue in 2018; however, the company did disclose any revenue specifically from the smart thermostat products.

RESEARCH STRATEGY

We began our research by scouring through the various industry reports on smart and connected thermostat industry in the US from Mordor Intelligence, Business Wire, and Freedonia Group, among others. Several reports we found identified key market leaders; however, each of the company's market share is behind a paywall, so we collated all the lists on key market leaders we found and used it as a starting point.

Next, we looked for quantitative data so we could determine the top market leaders. We found an article by CNET, which states that Nest has 73% of all the revenue generated from smart thermostats in the US, while Ecobee holds 17%, and Honeywell less than 10%. Using the 2017 total revenue generated from smart thermostats in the US published by Statista, we calculated the revenue share of each of the company, and here are our calculations:
Since Nest Labs and Ecobee already owned 90% of the market, the rest of the market leaders share the remaining 10%, including Honeywell. To complete the top five home technology, we added two more companies most mentioned in the paid research reports we found as relevant findings.

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Part
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Smart Home Technology Market Leaders: Smart Light Bulbs

After a detailed search through the publicly available data, we could not provide a direct answer regarding the market leaders in the US smart light bulb industry based on companies' with the highest market revenues or market share from smart light bulbs/smart thermostat. Below are the strategies utilized in the course of our search and findings we were able to uncover.

HELPFUL FINDINGS

1. GENERAL ELECTRIC COMPANY

  • General Electric is one of the global leaders in the smart light bulb industry.
  • This company offers light emitting diodes (LEDs) in a range of shapes, sizes, and color temperatures.
  • General Electric is headquartered in Connecticut, the United States.
  • General Electric smart light bulb product offerings are in various series such as LED, HD LED, and C by GE.
  • Also, General Electric smart light bulb product offerings are long-lasting light bulbs, with more energy efficiency, among other features.
  • Examples of General Electric smart light bulbs include "C by GE Soft White 65W Replacement, BR30," "C by GE Soft White 60W Replacement, A19," among others.
  • General electric company annual revenue is $121.6 billion

2. HONEYWELL INTERNATIONAL

  • Honeywell company provides smart light bulbs (LED light bulbs) with various features such as maximum energy saving capacity and the company's products are also cost-effective. This company is headquartered in New Jersey, the United States.
  • Honeywell company is also one of the global market leaders the smart light bulb industry.
  • Also, Honeywell smart light bulbs offer several advantages compared to traditional light bulb technologies.
  • This company's products can last for more than 22 years, providing energy savings of over 80% compared to incandescent bulbs.
  • Honeywell smart light bulbs are offered in a variety of wattage equivalents and color temperatures depending on the individual's needs.
  • Examples of Honeywell smart light bulbs include "Honeywell 60W Dimmable LED Light Bulb," "Honeywell 65W Dimmable LED Light Bulb," among others.
  • Honeywell's annual revenue is $41.8 billion.

3. SCHNEIDER ELECTRIC

4. EATON

5. SIGNIFY NETHERLANDS B.V. (PHILIPS LIGHTING HOLDING B.V.)

  • Signify, formerly known as Philips Lighting, is based in the Netherlands and they help to provide various lighting solutions.
  • Signify is also one of the global market leaders in the smart light bulb industry.
  • On June 27, 2019, Signify announced that its smart bulbs would have Bluetooth support built-in to enable connection of lights to each other and to smartphones.
  • Signify smart light bulb products are tailored towards the individual's needs and they also offer varieties of smart light bulbs according to individuals' expenses.
  • Examples of Signify smart light bulbs include "Hue White ambiance," Hue White color ambiance, among others.
  • This company offers its products and services in more than 70 countries, including the United States.
  • Signify annual revenue is $8.1 billion.

YOUR RESEARCH TEAM APPLIED THE FOLLOWING STRATEGY

To address the research request, our initial approach was to identify lists of top global market leaders in the smart light bulb industry through credible industrial publications and market reports in the industry such as Market Watch, the Industry report, Globe Newswire, PRNewswire, among others. Here, we were able to identify lists of companies regarded as top global market leaders in the smart light bulb industry that corroborated one another. Also, we endeavored to identify companies in the lists that offer their products and services in the United States. We also discovered that the majority of the companies in the smart light bulb industry also provide additional products, asides smart light bulbs. Going forward, we embarked on an in-depth search to identify the selected companies' revenue or market share from smart light bulbs/smart thermostat by scouring through the companies' annual reports, company profiling databases, among others. Here, we could not identify the smart light bulbs/smart thermostat revenues or market share of the selected companies. Information we were able to retrieve was typically about each of the company's overall revenue and their various business operations.
Next, we searched through media articles, press releases, and news outlets such as Forbes, PRWeb, Newswire, WSJ, Business Insider, Bloomberg, among others to identify the selected companies' revenue or market share from smart light bulbs/smart thermostat, but unfortunately, we could not retrieve such information. Here, the information we were able to identify was about various products and services each of the company's offers and their business growth.
We also explored through the website of the identified market leaders in the smart light bulb industry in the United States. We scoured through the companies' financial reports and news section on their websites to identify their revenues or market share from smart light bulbs/smart thermostat, but this search was not successful. Information we were able to retrieve was about each of the company's diversities of operations, annual revenue of their overall business operations, and various plans for the future.

After searching through various credible databases and resources mentioned above, our search yielded only the top market leaders in the US smart light bulb industry based on the companies' overall revenues. Lack of availability of the smart light bulbs/smart thermostat revenue or market share of the identified companies' on public data, could be as a result of the private status of the majority of the companies and competitive reasons. Hence, we have provided above the overview of the top market leaders in the US smart light bulb industry based on their overall revenues as our helpful findings. We also suggested that since these selected companies are categorized among the top global market leaders in the smart light bulb industry, smart light bulbs/smart thermostat may have contributed significantly to the overall companies' revenue.

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Part
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Smart Home Technology Market Leaders: Smart Appliances

Our research team identified four market leaders in the US home appliances market. The home appliances market share in the US is dominated by Samsung which sold 19.5% units in 2017, LG with a market share of 15.7%, Whirlpool which has a market share of 15.4%, and GE which holds a market share of 14.5%. The total revenue in the US smart appliances segment is forecast to be US$6,712million in 2019, with an annual growth rate of 12.5% CAGR between 2019-2023. The products that constitute the smart appliances industry include home appliances such as the smart washer and smart dryer, and kitchen appliances such as smart refrigerators and smart dish washers.

US SMART APPLIANCE INDUSTRY OVERVIEW

  • The total revenue in the US smart appliances segment is projected to amount to US$6,712 million in 2019, with an annual growth rate CAGR between 2019-2023 of 12.5%, resulting in a market volume of US$10,752 million by 2023. In addition, the average revenue received from every smart home in relation to the smart appliances segment is currently US$383 million. In global comparison, most revenue is generated in the United States with $6,712 million.
  • 'The market research report' by Reuters on the 'Global Smart Appliances Market' shares an overview on the smart appliances market for the global as well as the US market along with key players in the market, including Remote Technologies Inc, Samsung, Interface Inc., Haier Group Inc and others. The market was valued at approximately $18.82 billion in 2017 and is expected to grow at a CAGR of around 14.69%, around $49 billion, by the end of 2024. The North America region is the market holding the maximum market share in the segment.
  • The products that constitute the smart appliances industry include home appliances such as the smart washer, smart dryer, smart air conditioner, and smart lighting devices. We also have kitchen appliances such as the smart refrigerator , smart coffee maker, smart kettle, and smart dish washer.

HOME APPLIANCE MARKET LEADERS

Samsung

  • The home appliances market share in the US is dominated by Samsung which reached 19.5% of units sold in the country in 2017. The company gained the market share based on increased sales of its microwaves, premium refrigerators and washing machines. The company's market share in refrigerators was 22.7% in 2017, whereas its share in the premium segment reached 32.9% in 2017.
  • Samsung American subsidiary is a part of the parent company and reports revenue from it main company. The Annual report of the company publishes consolidated revenues for the American region which was not product or segment based. LG holds a market share of 15.7% in the home appliances market in the US by units sold in the country in 2017.
  • The company estimates that LG Electronics should pay some $4.7 million for tariffs, which is about 3.4% of the operating profit in its home appliance division. The Financial statements of the company reports the consolidated revenue for their home appliances division and their smart appliances specific market revenues for the US.

Whirlpool

  • Whirlpool holds a market share of 15.4% in the home appliances market in the US by units sold in the country in 2017. The company's smart appliances products include the connected washer & dryer, the smart counter-top oven, and other items in the smart cooking range.
  • The company's financial report details the home appliances revenues including cooking appliances, laundry, and refrigerators, along with its market distribution in North America and Latin America.

GE (ELectrolux)

  • GE holds a market share of 14.5% in the home appliances market in US by units sold in the country in 2017. The company is aiming to top the US market in the next five years by increasing its targets production, distribution and connected products market in the segment.

Research Strategy:

Our first research strategy was to locate credible market and industry research reports on the smart appliances market from sources including Mordor Intelligence, Market Radar, EuroMonitor, Deloitte, Zion, and BusinessWire. As these reports are the primary resource for information on key industry players and at times also provide a ranked list based on revenues/market share, hence the idea was to garner any such available list from these reports related to the US smart appliance industry. However, most of the reports found were for the global smart appliances market. A further search through these global reports which also provided the US region insights on the key players in the smart appliances market, returned paid reports from Globe Newswire and Reuters which shared insights on the North America region holding the maximum market share and being a dominant region in the smart appliances market, along with references of the major players in the market, including Whirlpool, Samsung, LG, Electrolux and others. However, the findings were secured behind a paid wall and this search did not provide the relevant information needed. Additionally, data from Statista provided insights on the US smart appliances market which was valued at S$6,712m in 2019, and the US holding the maximum revenue generation in the segment globally. However, no further information on the market leaders based on their US market revenues or market share was available.

Our second strategy was to identify the relevant information through various media articles from credible sources including Businessnews, Businesswire, Bloomberg, Reuters, Live Mint, Global Newswire, and Asia Nikkei, on the smart home appliances market leaders in the US, along with company analysis from Seeking Alpha, BCG, Nielsen, and company databases sites such as Hoovers, Crunchbase, and Craft.Io. This was meant to find out whether they have any readily available lists of relevant industry players or any information on the best or leading smart appliances brands based on customer perception or feedback. Through the search, we found most of the information related to key market players based on market share for the overall home appliances segment in the US, not just for the smart appliances segment. The market leaders named such as Samsung (19.5%), LG (15.7%) and Whirlpool (15.4%), were ranked based on the units sold in the US Market in 2017, and the companies making a progressive leap in the premium/smart appliances segment in refrigerators, washing machines and microwaves, but insights on their leadership for specific smart appliances segment was not available.

For our third strategy, based on the available information identified through the above searches, we tried to triangulate the information by individually locating the companies extrapolated from the market reports and news articles that were identified as key leaders in the US region, such as Samsung, LG, Whirlpool, and GE(Electrolux), and further by individually searching each company's annual reports/financial statements identifying their market revenues in the US region for the smart appliances segment and further listing them accordingly. For the same, we looked through each company's official website and looked through their annual reports and financial statements to locate their smart appliances revenue from the US region. Through the search, it was found that Samsung America is the private subsidiary of parent company Samsung electronics and reports the revenues in consolidated form for its overall region and not based on product/division. Also, Whirlpool and LG reported their financial revenues based on the overall home application unit but not specific to smart appliances segment for the US. Hence, this search did not provide the required relevant information.

Our fourth strategy was to broaden the scope of the research beyond the standard Wonder's two-year source timeline rule. With this approach, we hoped to look for slightly outdated but useful information from any past surveys or research done around the topic which we could use as a proxy for the US smart appliance industry market leaders, based on their market share/market revenues from smart appliances. The idea was to use the past list as a starting point and check if these companies still hold the leadership positions. However, no relevant past surveys or research reports could be located around the topic. We therefore concluded that this information is not available.
Part
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Part
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Smart Home Product Sales By Retail Category

The top five sales distribution channels for smart home devices in the US are national retailers (27% to 39%), online retailers (20% to 22%), HVAC contractors (15%), security dealers (20%), and telecom service providers (10% to 13%). The top five channels comprise 80% of the market share for each smart home device category in the US.

SALES DISTRIBUTION OF SMART HOME DEVICES BY CHANNELS

McKinsey Survey

Parks Associates Report

  • 26% from retailers like Home Depot, Walmart, or Sears.
  • 20% from a security dealer like ADT and Protection One
  • 20% from an online retailer like Amazon
  • 15% from a local HVAC contractor
  • 12% from a custom installer without a retail location
  • 10% from a broadband service provider
  • 7% from an electricity provider
  • 5% from other contract service providers like a plumber or an electrician.

NPD Group Survey

  • 13% of respondents purchased at least one smart home device from their cable or telecom provider.
  • 27% of customers bought a smart home device from a home improvement retail channel.
  • 38% to 51% of participants purchased a device like smart power and smart lighting from pure-play online retailers.

MAJOR AWARENESS CHANNELS FOR SMART HOME PRODUCTS (NON-USER VS. USER)

Media

Word of mouth

  • Heard from friends/family: 15% vs.22%
  • Read on a social network: 6% vs.13%

Provider

  • Offered by home security company: 7% vs.18%
  • Offered by cable or telecom company: 7% vs.15%
  • Offered by a utility company: 9% vs.14%
  • Recommended by health care provider: 4% vs.11%

Store visit and demos

  • Saw at home improvement store: 8% vs.16%
  • Saw product/demo at electronics: 6% vs.16%

HELPFUL FINDINGS

  • According to the report by BCG, there are over 1,500 players in the smart-home ecosystem comprising 11 segments. Amazon holds the largest share in the US market, accounting for about 70% of the 25 million smart home devices.
  • According to the survey on 5,000 US internet households by NPD Group, it is found that respondents now purchase smart home devices from a broad range of retailers like telecom providers, pure-play stores, and home-improvement stores, among others.
  • A recent survey by McKinsey on 2,000 American households reveals that about 40% of connected home devices are purchased from service providers. Further, about 25% to 50% more device units are purchased by customers when buying from a service provider.
  • In the US, about 56% of the connected home users own one device, 18% own two devices, 26% own more than three devices, and nearly 50% of multiple device owners are interested in buying a smart device-hub.
  • According to NPD, the sales of connected smart home devices in the US for 2017 stood at $29.3 billion for 25 tech subcategories including entertainment devices ($24.8 billion); home automation ($1.8 billion); kids devices ($275 million); and bath and digital health devices ($2.4 billion).
  • According to the 2017 ComScore report, it is found that households with a smart speaker are 6.6 times more likely to buy a smart lighting system, 3.3 times more likely to purchase a smart hub, and 2.2 times more likely to buy a smart thermostat.
  • Smart home customers seek better support services from the channels they buy their devices, i.e., retailers (45%), manufacturers (46%), and internet providers (33%).

RESEARCH STRATEGY

We started our research by identifying industry reports that provide the breakdown of US smart home products by sales distribution channel. We studied multiple reports from credible industry sources like McKinsey, NPD Group, BCG, and Parks Associates. The McKinsey and NPD Group featured survey findings on 2,000 and 5,000 US households with smart home devices. We found similar data on the distribution sales channels of smart home devices across all the reports we have cited in this research. Next, we were able to ascertain the major channels for sales of smart home devices in the US by cross-referencing the data from industry reports. We also found the details about the primary medium through which users and non-users become aware of the smart-home devices in the US.
Sources
Sources

From Part 03