Trends in Smart Home Purchases
In the United States, the world's largest market for smart home technology, revenues are expected to grow by 100% by 2020. The Asian market is also expected to grow exponentially and will represent 30% of the global market by 2030. A deep dive into our findings is below.
1) Growth in American Market expected to double in 2020 - In 2016, American consumers spent around 24 billion dollars in smart home devices and this number is expected to double by 2020. Another source projects there to be more than 35 million smart homes in the U.S. by 2035. Security and safety systems is expected to be the largest driver in this increasing consumption. As one analyst notes, "80%+ of U.S. residences simply do not see value in (roughly) $50/month monitored security, but may see value in a less expensive option with fewer features, or more upfront costs." Security systems with smart home technology will give users capabilities such as monitoring their home for fire, leaks or burglars - even when not present in the home. Overall in 2017, the American market accounted for 48% of global revenues.
2) Obstacles for U.S. market - A survey of U.S. households showed over 40% of U.S. households already have smart home technology. It is also worth noting that the average smart home had more than 3 devices per home. However, of the 59% that said they did not have smart home technology, a quarter expressed concerns about data privacy while 29% expressed concerns about price.
3) Europe, Middle East and Africa region to be global leader by 2021 - The EMEA region will account for 42% of global revenues. Certainly, expect Europe to still make up the largest portion of this as it remains the second most mature market in the world by region today.
4) Growing importance of Asia/Pacific market - Certainly, the U.S. still remains the largest and most mature market for smart home devices globally, the Asia and Pacific region is growing at an incredibly rapid pace and is expected to account for a larger percentage of global market share - especially as sales continue to increase in countries like China, India and Japan. China of course deserves special attention because of the size of its market: The country was already the largest consumer for smart home air conditioners by 2015 (with 3 million sold). As noted previously, the Chinese Baidu platform is also the third most used for smart home speakers. Furthermore, China's Smart Home market is projected to reach a value of $20.3 billion dollars this year. This reflects 50% growth from the size of the market in 2015. Overall, Asia is expected to account for 30% of the total smart home market by 2030 (estimated at $115 billion)
5) Smart TV's most used device in China - In China, 2 out of 5 surveyed internet users had some form of smart TV. By 2020, analysts predict smart TV's will penetrate 93% of Chinese households. This study also predicts that at the same time, smart air conditioners will penetrate 55% of Chinese households, smart washing machines will penetrate 45%, and smart refrigerators will penetrate 38%.
6) Japan especially intriguing market - It is worth noting that Japan will become a particularly profitable market for smart home technologies because of the rapidly aging population that seek out these sorts of services. On this front, the company Vinclu recently released an artificial assistant
7) Amazon as clear market leader - In 2017, Amazon and its Alexa platform was responsible for 68% of the over 24 million smart speaker sales globally. This is followed by Google Assistant at 20% and China's Baidu platform at number 3.
8) Globally, 10% of homes will be smart by 2025 - To give you some perspective about how rapid this growth has been, note that only 0.5% of American homes had smart technology in 2010.
9) Energy-Saving - Many consumers purchase smart homes for the purpose of saving energy. Expect the demand for energy-saving smart home technology to continue to drive both the consumption of smart homes as well as the direction that technological development takes. For example, we have recently seen Ecobee3uses use small wireless sensors to control room temperature. Specifically, smart radiator valves will continue to grow in importance - By 2021, 75% of radiator valves will be shipped to Europe.
10) Entertainment - Using smart homes to connect and integrate various entertainment products and technologies is also a key demand in the consumer market. The Amazon Echo can for example integrate 7000 apps plus services. Smart speakers such as the Amazon Echo will continue to be a significant driving force for the industry. In 2016, 7 million smart speakers were shipped globally.
With Amazon leading the way, the smart home market is expected to continue to grow at unprecedented paces in most markets across the globe. This is particularly true for the U.S. market, which is expected to double by 2020 and the Asian market, which is projected to reach 30% market share by 2030.