Smart Home Category Size and Growth, US

Part
01
of four
Part
01

Smart Home Market Size

According to Statista, the US smart home industry is currently worth $27.75 billion, and there are about 42.2 million smart homes in the United States.

THE UNITED STATES SMART HOME INDUSTRY SIZE

  • The US smart home industry size was approximately $24 billion in 2018.
  • According to Statista, the US smart home industry revenue for 2019 is predicted to be $27.75 billion, and it is forecast to reach $43.67 billion by 2023.
  • The US smart home industry is projected to grow at a CAGR of 12% from 2019 to 2023.
  • The percentage of smart home in the United States increased from 13% in 2013 to 38% in 2018.
  • Smart home penetration rate in the United States is projected to increase from approximately 33.2% in 2019 to reach 53.9% by 2023.
  • There are an estimated 42.2 million smart homes in the United States.
  • In terms of the number of smart homes, the US smart home industry predicted to grow at a CAGR of 21.4% from 2019 to 2023.
  • Over 45 million smart home devices were installed in homes in 2018.
  • According to Consumer Technology Association, approximately 29 million smart home devices/technologies were in circulation in the US in 2017.

RESEARCH STRATEGY

Your research team leveraged publicly available data on market statistics aggregators' databases like Statista to provide the requested information regarding the US smart home industry size. While these sources provided the industry size, we went further to corroborated this information scouring through credible media sources like Forbes, PR Newswire, and PCMag. We also search through smart home market reports by reputable market research firms like Research and Markets, Markets and Markets, Mordor Intelligence, and IDC for data to corroborate the US smart home industry data found at the Statista. While these sources provide information specific to the US smart homes industry, this information is locked behind a paywall.
Part
02
of four
Part
02

Smart Home Industry Segmentation

The Smart Home Industry market is composed of the following six segments; Energy Management (5.88% of the market), Comfort and Lighting (7.45%), Home Entertainment (15.6%), Control and Connectivity (23.48%), Security (23.33%), and Smart Appliances (24.19%).

SMART HOME MARKET

  • The United States generates the most revenue when compared globally.
  • The Smart Home market generated a revenue of $27,747 million in the United States in 2019.
  • It is estimated that there are currently 42.2 million Smart Homes in the United States.
  • By 2023, there is expected to be an annual growth rate of 12%, which will result in a market volume of $43,671 million.

MARKET SEGMENTS

ENERGY MANAGEMENT

  • The Energy Management segment of the Smart Home industry generates approximately $1,633 million in revenue annually.
  • An estimated 14.4 million homes in the United States are equipped with Smart Home Energy Management devices or services.
  • Each of these homes generates an approximate $113.16 in annual revenue.
  • By 2023, there is expected to be an annual growth rate of 11.7%, which will result in a market volume of $2,541 million.
  • It has 5.88% of the market share. (Source 2)

COMFORT & LIGHTING

  • The Comfort and Lighting segment of the Smart Home industry generates approximately $2,068 million in revenue annually.
  • An estimated 21.5 million homes in the United States are equipped with Smart Home Comfort and Lighting devices and services.
  • Each of these homes generates an approximate $96.06 in annual revenue.
  • By 2023, there is expected to be an annual growth rate of 18%, which will result in a market volume of $4,016 million.
  • It has 7.45% of the market share.

HOME ENTERTAINMENT

  • The Home Entertainment segment of the Smart Home industry generates approximately $4,346 million in revenue annually.
  • An estimated 25 million homes in the United States are equipped with Smart Home Entertainment devices and services.
  • Each of these homes generates an approximate $173.56 in annual revenue.
  • By 2023, there is expected to be an annual growth rate of 6.3%, which will result in a market volume of $5,541 million.
  • It has a 15.6% market share of the smart home industry.

CONTROL & CONNECTIVITY

  • The Control and Connectivity segment of the Smart Home industry generates approximately $6,515 million in revenue annually.
  • An estimated 37.5 million homes in the United States are equipped with Smart Home Control and Connectivity devices and services.
  • Each of these homes generates an approximate $173.62 in annual revenue.
  • By 2023, there is expected to be an annual growth rate of 10.3%, which will result in a market volume of $9,655 million.
  • It has 23.48% of market share in the smart home industry.

SECURITY

  • The Security segment of the Smart Home industry generates approximately $6,472 million in revenue annually.
  • An estimated 23.3 million homes in the United States are equipped with Smart Home Security devices and services.
  • Each of these homes generates an approximate $277.69 in annual revenue.
  • By 2023, there is expected to be an annual growth rate of 14.6%, which will result in a market volume of $11,166 million.
  • It has a 23.33% market share in the smart home industry.

SMART APPLIANCES

  • The Smart Appliances segment of the Smart Home industry generates approximately $6,712 million in revenue annually.
  • An estimated 17.5 million homes in the United States are equipped with Smart Home Smart Appliance devices and services.
  • Each of these homes generates an approximate $382.66 in annual revenue.
  • By 2023, there is expected to be an annual growth rate of 12.5%, which will result in a market volume of $10,572 million.
  • It has 24.19% of the industry's overall market share.

Research Strategy

Research began by seeking out the information necessary in identifying the Smart Home industry's market segments. Databases containing market reports and industry-based market forecasts and statistics, hosted by sites such as Statista, provided research with invaluable information and data. Through these databases, research was successful in providing the segmentation of the Smart Home industry. With this knowledge, we performed a deep dive into each of the segments previously discovered. Using the revenue generated by each segment, along with the revenue generated by the overall Smart Home industry, we were able to successfully calculate the market share for each Smart Home market segment.

The following calculations were made:

ENERGY MANAGEMENT

1,633,000,000 x 100 / 27,747,000,000 = 5.88%

COMFORT & LIGHTING

2,068,000,000 x 100 / 27,747,000,000 = 7.45%

HOME ENTERTAINMENT

4,346,000,000 x 100 / 27,747,000,000 = 15.6%

CONTROL & CONNECTIVITY

6,515,000,000 x 100 / 27,747,000,000 = 23.48%

SECURITY

6,472,000,000 x 100 / 27,747,000,000 = 23.33%

SMART APPLIANCES

6,712,000,000 x 100 / 27,747,000,000 = 24.19%
Part
03
of four
Part
03

Smart Home Market Growth

McKinsey estimates the revenue growth rate of the United States smart home market to be 17%.

FINDINGS

  • According to McKinsey, the number of smart homes in the United States grew at 31% CAGR in the period 2015-2017. However, the corresponding growth in sales was just 17%.
  • The revenue breakup for 2017: 42% was recurring revenue; 15% came from replacement devices; 23% can be attributed to new devices, and 37% of the revenue came from new household connections.
  • According to a report published by Businesscoot, the automation market in the United States grew at 10.5% in the period 2011 to 2017.
  • The Boston Consulting Group expects the United States smart-home devices market to grow at 42% between 2017 and 2022.

ADDITIONAL INFORMATION

  • The IDC had forecasted the worldwide smart home devices shipments to grow by 31% in 2018.
  • According to Strategy Analytics' forecast in 2014, the smart homes household penetration in the United States would grow from 13% in 2013 to 38% in 2019.
  • Kagan, S&P Global Market Intelligence's media research group, estimated that there were 15 million connected homes in the US in 2016. This equates to 12.5% of all US households in 2016; Kagan expects the household penetration to grow to 28% by 2021.

RESEARCH SUMMARY

The growth rate forecasted by McKinsey is for a shorter and more recent period (17% in 2015-2017) as compared to the Businesscoot's forecast (10.5% in 2011-2017). Also, as McKinsey is a top-ranking research firm, we believe it is the more accurate estimate.
Part
04
of four
Part
04

Smart Home Industry, Market Share Leaders

The market leaders in smart speakers are Amazon Echo and Google Home, while leaders in smart security are Google Nest and Amazon Ring. Additionally, the market leader in smart Vacuums is iRobot.

OVERALL SMART HOME MARKET SIZE IN THE UNITED STATES


SMART SPEAKERS: AMAZON ECHO AND GOOGLE ASSISTANT

Amazon Echo

  • Company Name: Amazon.
  • Overview of their smart home product offerings: Amazon has Amazon Echo in the smart speaker category. Because of its successful introduction to the market, Amazon made the new Echo product line up such as Echo Dot and Echo Plus.
  • The original Echo Dot looked like a plastic hockey puck. However, the company redesigned the product to be rounder and covered in fabric such as Google Home mini. It is available in black or white and engineered to sound louder and clearer.
  • Smart Home Revenue: We were unable to determine Amazon Echo's revenue (details in research strategy).
  • Market share in 2019: 61.1%.
  • Market share in 2018: 71.9%.

Google Home

  • Company Name: Google.
  • Overview of their smart home product offerings: Google Home is WiFi smart speaker that is connected to Google Assistant and smart home control.
  • This is the Google version of Amazon Echo. It can be used as entertainment in the home and to manage everyday tasks effortlessly.
  • Smart Home Revenue: In 2018, Google home contributed to $3.4 billion.
  • Market share in 2019: 23.9%.
  • Market share in 2018: 18.4%.

SMART SECURITY: AMAZON RING AND GOOGLE NEST

Google Nest


Amazon Ring

  • Company Name: Amazon.
  • Overview of their smart home product offerings: Amazon bought Ring and make Amazon Ring, a security system that works with Alexa. The ring requires a subscription if the customer wants to upload camera and video for security.
  • Smart Home Revenue: $415 million in 2018.
  • Market share in 2018: 35.93%.

SMART VACUUM: iROBOT

  • Company Name: iRobot.
  • Overview of their smart home product offerings: iRobot is a smart vacuum that has a mission to alleviate the need for people to clean. It has Roomba for the vacuum space, the Braava series for the wet floor care space, and 10% of total iRobot revenue and Mirra for pool cleaning.
  • Smart Home Revenue: $1.28 billion in 2018.
  • Market share in 2018: 85%.

RESEARCH STRATEGY

In order to define the top market leaders in smart home technology, we first searched for any information on the smart home industry and its classifications. After this, we searched for gadgets with the highest demand in every classification. To do this, we looked through press releases, news articles, and market analyses from credible publications and experts in the field. Using this strategy, we were able to determine the names of multiple companies, define an overview of their product offerings, provide market share, and establish the revenues for all but Amazon Echo. When searching for Amazon Echo's revenue, we used the following strategies:


Strategy #1

First, we searched through tech, smart home, smart speaker, and business websites such as Voicebot.ai, Forbes, or PCMag. We searched there because these websites will provide information on the leader of smart speakers in the United States. Amazon's revenue in the first quarter of 2019 was $59.7 billion with its future revenue depending on smart home sales.


Strategy #2

Next, we searched through Amazon official websites and its annual revenue on About Amazon. Oftentimes, an official website will provide data on Amazon annual revenue and probably on smart home revenue either. The latest annual report was from 2018. However, we did not locate the revenue on Amazon Echo. Instead, we found this company's annual revenue for that year was $232.887B and there was no explanation further


Strategy #3

Finally, we looked for the answer in smart speaker market size report websites such as MarketsandMarkets. While we were able to find a report with insight on Amazon Echo's revenue, this data is behind a paywall. We are unable to find Amazon Echo market size because the revenue for Amazon isn't available by division. We assume this information is not available because, as a private company, Amazon does not report its revenue breakdowns by division for competitive reasons.
Sources
Sources

From Part 01
Quotes
  • "Revenue in the Smart Home market amounts to US$27,747m in 2019."
  • "Revenue is expected to show an annual growth rate (CAGR 2019-2023) of 12.0%, resulting in a market volume of US$43,671m by 2023."
  • "Household penetration is 33.2% in 2019 and is expected to hit 53.9% by 2023."
  • "The average revenue per installed Smart Home currently amounts to US$113.16. A global comparison reveals that most revenue is generated in United States (US$27,747m in 2019)."
Quotes
  • "Statista's Digital Market Outlook (DMO) on smart homes reveals the numbers. $5.474 billion was spent on smart homes in the US alone in 2018; China, in comparison, reached just a measly $1.083 billion."
  • "The DMO forecast for the US smart home market in 2019 is $27.240 billion; China will go to $11.6 billion."
  • "Worldwide, the 2019 market will be $71.6 billion total. It expects the market to hit $151.9 billion by the year 2023—that's a 20.7 percent annual growth rate."
Quotes
  • "Five years ago, just 13 percent of American households had some sort of smart technology integrated into there homes. In 2019, it’s anticipated that at least 38 percent of American households will have entered the market. When compared to the UK, the US is predicted to have an 11 percent higher penetration rate."
Quotes
  • "Research from Statista predicts that by the end of 2018, more than 45 million smart home devices will be installed in U.S. homes, making the average revenue per home around $490. This is an annual growth rate for the home automation industry of 22% year over year to nearly $20 billion in the U.S."
From Part 03
Quotes
  • "Some estimate that adoption of smart-home devices in the US will achieve a compound annual growth rate of 42% between 2017 and 2022, as consumers embrace a wide variety of devices. "
Quotes
  • "The worldwide smart home devices market is expected to grow 31% year over year in 2018 to 643.9 million shipments, according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker. "
Quotes
  • "Five years ago, just 13 percent of American households had some sort of smart technology integrated into their homes. In 2019, it’s anticipated that at least 38 percent of American households will have entered the market. "
Quotes
  • "Kagan, a media research group within S&P Global Market Intelligence, reports that the number of U.S. smart homes grew to over 15 million at the end of 2016. While this total equates to just 12.5% of total U.S. households, that percentage is forecasted to grow to 28% by 2021."
Quotes
  • "The US market of smart home automation was valued at USD 3.2 billion in 2010 and grew to USD 3.5 billion in a year’s span. The market has further observed a record growth of USD 6 billion in 2017 growing at a rate of 10.5% from 2011-2017."
From Part 04
Quotes
  • "The top two smart speaker makers in the U.S. remained Amazon and Google in 2018 although their combined market share did dip from 90% at the end of 2017 to 85% one year later. Amazon Echo smart speaker owners represented 61.1% of U.S. adults while Google Home notched a 23.9% share. "
  • "The figures represent a market share loss for Amazon Echo of nearly 11% while Google Home accounted for about half of the decline by rising 5.5% during the year."
Quotes
  • "On the inside, the new Echo Dot has also been engineered to sound louder and clearer. In the brief demos I heard, it did better than the original, though I was in a loud room at the time. All this also means it's a bit larger than the original, but it shouldn't take up much more space. Most importantly, the new Echo Dot is priced the same as the original at $49.99."
Quotes
  • "Google Home is a Wi-Fi speaker that doubles as a smart home control hub and a personal assistant for the entire family. You can use it to playback entertainment throughout your home, effortlessly manage everyday tasks, and ask Google things you want to know. It's essentially Google's version of Amazon's Echo."
Quotes
  • "Among those six, the Nest family of smart home devices is the most popular online, accounting for 38 percent of units sold. Ring is pecking at their heels at 35 percent."
Quotes
  • "Ring also requires a subscription if you want its cameras to record and upload video, but it does so only when it detects motion. The advantage here is that Ring puts much less demand on your home internet connection. A Nest Cam on a Nest Aware subscription will eat up tens to hundreds of gigabytes of data per month, so watch out if your ISP imposes a data cap."
Quotes
  • "iRobot is the undisputed leader in its field: it continues to hold more than 60% of global market share in the robotic vacuum cleaner (RVC) segment despite fierce competition. Regionally, there’s even more contrast. North America’s market share is a staggering 85%. In fact, there the Roomba brand is synonymous with robotic vacuum cleaners in general. In the EMEA iRobot is also the dominant player with 71% market share."
Quotes
  • "in 2019, we expect revenue of $1.28 to $1.31 billion, which is year-over-year growth of 17% to 20%, operating income of $108 to $118 million, and EPS of $3.00 to $3.25, excluding discrete items. "
Quotes
  • "Amazon wants to continue its dominance over e-commerce, but it can only grow so much. In its first quarter earnings posted today, Amazon revealed record-high profit, more than double what investors predicted, and revenue was in line with Wall Street expectations, at $59.7 billion. But the company is again entering a period of high spending that, coupled with its slow revenue growth, may prove an obstacle down the line."
  • "At CES this year, Amazon didn’t have large product announcements of its own but instead introduced 13 new Ring products. It’s safe to say Amazon’s future seems to rely on the success of its smart home devices."