Smart Homes and Home Automation 10th Edition

Smart Homes and Home Automation 10th Edition

Smart Homes and Home Automation is the tenth consecutive reportfrom Berg Insight analysing the latest developments and trendson the smart home markets in Europe and North America. Thisstrategic research report provides you with 240 pages of uniquebusiness intelligence including 5-year industry forecasts and expertcommentary on which to base your business decisions.

Smart Homes and Home Automation 10th Edition

Smart home and home automation systems include a wide range of solutions for controlling, monitoring and automating functions in the home. Berg Insight’s definition of a smart home system is one that is accessible from remote and includes a smartphone app or a web portal user interface. Devices that only can be controlled and automated locally, through switches, timers, sensors and remote controls, are thus not included in the scope of this study. Smart home systems can be grouped into seven primary categories: security and access control systems; energy management and climate control systems; audio-visual and entertainment systems; lighting and window control systems; home appliances; service robotics and irrigation and water management systems.

The North American smart home market recorded strong growth during 2022. The installed base of smart home systems increased by 12.2 percent to reach 264.9 million at the year-end. An estimated 35.7 million of these were multifunction or whole-home systems whereas 229.2 million were point solutions designed for one specific function. As some homes have more than one smart system in use, the installed base totalled an estimated 57.5 million smart homes at the end of the year. This corresponds to 39.2 percent of all households, placing North America as the most advanced smart home market in the world. Between 2022 and 2027, the number of households that adopt smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 8.9 percent, resulting in 88.1 million smart homes. Market revenues reached US$_45.4 billion (€ 43.2 billion) in 2022, an increase of 10.5 percent year-on-year. The market is expected to grow at a CAGR of 10.1 percent between 2022 and 2027, reaching US$ 73.4 billion (€ 69.8 billion) in yearly revenues at the end of the forecast period.

The European market for smart home systems is still behind the North American market in terms of market penetration and maturity. However, the market has now grown to become almost as large as the North American market. At the end of 2022, there were a total of 206.7 million smart home systems in use in the EU27+3 countries, up 21.0 percent year-on-year. Around 26.5 million of these systems were multifunction or whole-home systems whereas 180.2 million were point solutions. This corresponds to around 63.1 million smart homes when overlaps are taken into account, meaning that 27.1 percent of all households in Europe were smart at the end of the year. The number of European households to adopt smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 12.1 percent during the next five years, resulting in 112.8 million smart homes by 2027. Market revenues grew by 18.9 percent to € 34.9 billion (US$ 36.7 billion) in 2022. The market is forecasted to grow at a CAGR of 14.3 percent between 2022 and 2027 to reach € 68.0 billion (US$ 71.5 billion) at the end of the forecast period.

A point solution will in many cases constitute a consumer’s first smart home purchase. The most popular point solutions to date, in terms of sold units, include smart thermostats, smart lightbulbs, smart plugs, connected security cameras and voice controlled smart speakers. These products are marketed by incumbent OEMs such as Signify, Resideo, Danfoss, Belkin,Chamberlain, Schlage and Assa Abloy and newer entrants such as Ecobee, Sonos, Arlo, Nuki,Mysa, IKEA and Wyze Labs. In the whole-home system market, traditional home automationvendors such as Crestron Electronics, Control4, Savant Systems, eQ-3 and Loxone are facingnew competition as companies from adjacent industries have entered the market.

Communications and security service providers such as ADT, Vivint, Comcast and Telus haveestablished themselves among the largest whole-home solution vendors in North America. Majorvendors in Europe include Centrica, Verisure, Somfy and Deutsche Telekom.

The outlook for the smart home market is positive. The new Matter standard is anticipated tobecome a key driver for mass market adoption of smart home systems in the next coming years.Matter enables interoperability between devices and services from various vendors which willfacilitate the purchasing process and setup of smart home devices for consumers. In recentyears and particularly in the past year, consumer interest for energy efficiency solutions hasgrown as electricity prices have surged in many countries. There are several smart homesolutions that can help households lower their energy consumption and energy bill. Energymanagement products such as smart thermostats and connected heat pumps, and other smarthome product categories with a clear value proposition for the consumer are expected tocontinue to be the most popular smart home products.