Smart Home Market Size, Share & Industry Analysis, By Device Type (Safety & Security Access Control, Home Appliances, HVAC, Lighting Control, Smart Entertainment Devices, Smart Kitchen Appliances, and Others), By Application (Retrofit and New Construction), By Protocol (Wired and Wireless), and Regional Forecast, 2024-2032

The global smart home market size was valued at USD 101.07 billion in 2023. The market is projected to grow from USD 121.59 billion in 2024 to USD 633.20 billion by 2032, exhibiting a CAGR of 22.9% during the forecast period. Additionally, the U.S. smart home market is predicted to grow significantly, reaching an estimated value of USD 105.25 billion by 2032, owing to increasing adoption of core communication technologies, Wi-Fi, Bluetooth, Zigbee, Matter, NFC, and the 5G network.

A smart home refers to a flexible and convenient home structure where devices and appliances can be mechanically controlled distantly from anywhere through an internet connection with the help of a mobile or networked device.

The demand for smart home products with AI integration is on the rise. This is due to the increasing popularity of smart features. In addition, the widespread use of smartphones and the internet is driving the demand for connected smart home products. The integration of AI with digital assistance allows for a more convenient and user-friendly experience, which greatly influences buyers' preferences.

Moreover, the home automation business has snowballed, and this trend was aided in part by the COVID-19 pandemic, where people spend more time in their homes owing to lockdown restrictions. As a result, more vendors entered the industry. The market now covers a wide variety of mid-range, entry-level, and low-cost home automation products, with increased availability due to the entry of more businesses in the market and higher online sales.

Smart Home Market Trends

Increasing Deployment of Energy-efficient and Interoperable Smart Home Systems to Propel Market Growth

Smart home devices, such as smart sprinkler systems, smart thermostats, smart meters, smart bulbs, smart power strips, and smart composters, enable people to manage and track their power usage, conserve energy, and contribute to reducing carbon emissions. Demand for the creation of a smart ecosystem, where all the devices work seamlessly together, without any need for additional programming or setup, is increasing. This is achieved by the implementation of communication protocols, including Wi-Fi, Zigbee, and Matter, among others. Smart devices can be energy-efficient and provide sustainable solutions for the environment, which may propel the smart home market growth.

Companies are also deploying smart devices that consume less energy without compromising their functionality. These devices are integrated with energy-efficient components such as LEDs, low-power processors, and power-saving techniques, among others. For instance, in September 2022, Lutron Electronics Co., Inc. unveiled its Claro smart switch and Diva smart dimmer for automating smart home lighting. These products also offer a wireless alternative.

Smart Home Market Growth Factors

High Adoption of Internet of Things (IoT) Solutions to Boost Market Expansion

The Internet of Things (IoT) platform is one of the most significant factors driving the market growth. IoT-based equipment provides energy-saving features at home. According to GSMA Intelligence, IoT connections are expected to reach approximately 25 billion globally by 2025, up from 10.3 billion in 2018. This factor shows that within some years, there will be massive clusters of sensors, devices, and things that will communicate through high-speed technology such as 5G. Such a growing proliferation of IoT devices is likely to drive the market toward a higher growth trajectory.

Furthermore, key firms are concentrating their efforts on the development of IoT platforms and related smart home technologies (machine learning, artificial intelligence, and others) that may be employed in smart appliances. This factor is predicted to expand the global market in the future.

RESTRAINING FACTORS

Security Threats May Hamper Market Growth

The significant obstacle to the market expansion is the rising risk of cyberattacks in high-end connected technologies. The technology faces several security threats from all the connected endpoints. As smart technology is connected to every system and device in the home, hackers can gain confidential personal information if it is not secured properly. According to Rambus Incorporated, a designer, developer, and licenser of chip interface technologies, approximately 80% of IoT devices are vulnerable to online assaults. Connecting historically "standalone" smart devices, such as lights, appliances, and locks, clearly brings a lot of new cyber security concerns. Even connected baby monitors are vulnerable to digital intruders, as many frightened parents discovered after hackers communicated with their young children via a hacked device. This factor is expected to hamper the smart home market share during the forecast period.

Smart Home Market Segmentation Analysis

By Device Type Analysis

Growing Adoption of Smart Displays and Speakers to Drive the Smart Entertainment Devices Segment Growth

Based on device type, the market is classified into safety & security access control, which includes security cameras, smart door locks, and remote monitoring software & services, home appliances that include smart water heaters, smart washing machines, and smart vacuum cleaners, HVAC components, including smart thermostats, sensors, smart vents, heating & cooling coils, and others (control valves), lighting control that comprises smart lights, dimmers, occupancy sensors, switches, and others (accessories), smart entertainment devices such as smart displays/TV, sound bars & speakers, and others (other streaming devices), smart kitchen appliances that include refrigerators, dish washers, microwave/ovens, and others (kettle, cookers) and other smart devices such as smart furniture, home healthcare.

Amongst them, the smart entertainment devices segment held the largest market share in 2023, owing to the increasing adoption of smart devices such as smart displays/TVs and speakers, bars, and streaming devices. Consumer spending on these smart entertainment appliances has also increased with the growing adoption of IoT devices and digitization. For instance,

• According to Industry experts, the overall video entertainment shipments in smart home devices account for 32.5% of the market share, and smart speakers account for 12.5% of the market share in worldwide shipments.

Such rising adoption of smart entertainment devices contributes to market growth.

The safety & security access control segment is anticipated to grow with the highest CAGR during the forecast period. The interest in security and surveillance solutions to protect themselves against theft and safeguard their family and loved ones is increasing among individuals with the surge in rapid urbanization. For instance,

• As per Industry experts, smart home monitoring and security solutions shipments increased from 140.3 million in 2019 to 351.7 million in 2023, with a market share of a total of 22.6% in 2023.

By Application Analysis

Growing Interest of Customers in Smart Home Devices to Spur the Retrofit Segment Expansion

Based on application, the market is bifurcated into retrofit and new construction.

Amongst them, the retrofit segment held the largest market share in 2023 due to customers' rising interest in smart home devices. Even if their houses are not equipped with smart home solutions, individuals are keen on installing them in their in-built dwellings. Various features such as security, safety, ease of use, and energy management encourage them to deploy these devices in their households.

The new construction segment is projected to grow with a leading CAGR during the study period. The preference of individuals for housing with installed in-built solutions is increasing. As per an industry experts' survey, 81% of buyers are more interested in buying homes with built-in smart home solutions.

By Protocol Analysis

Advanced Features of Wireless Protocol Fuels Segment Growth

By protocol, the market is segmented into wired and wireless.

The wireless protocol includes various protocols, such as WiFi, Bluetooth/BLE, Zigbee, Z-Wave, and many others. The wireless segment accounts for the largest market share and is predicted to grow with the highest CAGR during the forecast period. Broad support with extensive coverage area, efficient data transfer, reliability for mesh networking, and many other features facilitate the usage of the wireless protocol across different smart home devices such as smart locks, smart speakers, thermostats, smart lighting, and security systems, among others.  It also offers various advantages, such as mobility, convenience, cost-effectiveness, and scalability. Users connect several devices without wires, transform them around freely, remove or add devices easily, and save money on installation and cabling.

The wired protocol includes Ethernet, which needs fiber cables to transfer data at high speed. Ethernet tracks the IEEE 802.3 standard and aids secure and reliable data transmission across a network. The wired protocol also offers unparalleled consistency and reliability, enhanced performance and speed, better security, minimum interference, and many more.

REGIONAL INSIGHTS

In terms of region, the market is classified into North America, the Asia Pacific, Europe, the Middle East & Africa, and South America.

North America is expected to hold the largest market share during the forecast period. The strong presence of major players, including Amazon Inc., Apple Inc., Honeywell International Ltd., and Sony Corporation, backs this growth. In addition, factors such as increasing adoption of core communication technologies, Wi-Fi, Bluetooth, Zigbee, Matter, NFC, and the upcoming 5G network are boosting the market growth in the region.

Key companies in this region are focused on entering strategic mergers and acquisitions to expand their business units globally.

• In January 2022, Samsung Electronics Co., Ltd. collaborated with Oracle Corp. to create intelligent energy solutions for its clients. They merged Oracle's contextual and behavioral energy insights with Samsung's SmartThings products and automation services.

Furthermore, this smart ecosystem is rapidly expanding, and existing solution providers are producing advanced technologies for the same. The major players in the market are expanding their product portfolios through mergers and acquisitions and by investing in cutting-edge technologies.

Asia Pacific is predicted to exhibit the highest CAGR during the projection period. The increasing demand for automation solutions from residential applications is anticipated to drive market growth in the region. The region's leading companies are focusing on collaborating with other well-known firms to create and deploy innovative smart devices.

• In November 2022, Huawei unveiled its latest smart home technology in China. The new smart home service incorporates AI and sensors to identify users' locations and adapt to personalized or automatic settings, such as specific lighting preferences.

Europe’s growth is being driven by the expansion of small businesses and increased investment by major corporations in the U.K., France, Germany, and other countries. The growing need for smart security and monitoring systems in this region is fueling the market’s progress.

The Middle East & Africa and South America are likely to grow at a prominent rate during the forecast period. Governments and local players are increasing their initiatives and investments. According to a study conducted by Ciena in June 2021, more than half of adults in Saudi Arabia (57%) and the UAE (54%) believed the future of smart appliances would be driven by increasing adoption of energy-efficient appliances. A vast number of people in both countries (94% in each) were considering conducting more virtual activities to decrease their carbon impact. In addition, the adoption of these systems and consumption of control devices is on the rise (40% in the UAE and 46% in the KSA). As a result of these smart home market trends, metro and edge networks are being used to meet the ever-increasing smart home demand.

List of Key Companies in Smart Home Market

Key Players Focus on Heavily Investing in R&D to Deliver Advanced Products

The major players in the market are Emerson Electric Co., Honeywell International, Schneider Electric S.E., and Samsung Group, amongst others. These corporations are heavily investing in R&D to give advanced products and services to their clients. For instance,

• December 2022: Google introduced 'Matter Support' for its range of smart devices, including Google Home Speaker, Nest WiFi Pro, Nest Hub Max, Nest Mini, Nest Audio, Home Mini, and Nest Hub. This update improves the compatibility of these devices by allowing them to connect and collaborate with different manufacturers and platforms.

LIST OF KEY COMPANIES PROFILED:

• Apple Inc. (U.S.)


• Amazon Inc. (U.S.)


• Centrica Connected Home Limited (U.K.)


• Emerson Electric Co. (U.S.)


• General Electric Company (U.S.)


• Honeywell International (U.S.)


• SAMSUNG (South Korea)


• Schneider Electric SE (France)


• Sony Corporation (Japan)


• Johnson Controls (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• January 2023 – Schneider Electric launched Schneider Home. This energy management solution consists of a house battery for storing sustainable energy, a powerful solar inverter, a smart electric panel, light switches, connected electrical outlets, and an Electric Vehicle (EV) charger. The entire system can be easily controlled through the user-friendly Schneider Home app.


• January 2023 – Apple announced that it is working on a new tablet similar to the iPad, with a lower price point and an updated version of its Apple TV in an effort to increase its footprint in the smart home market. This development is being viewed as a competitive challenge to Google and Amazon, which are currently dominating the voice-enabled smart device space.


• November 2022 – Schneider Electric and Smartworld Developers joined forces to create home automation solutions. Smartworld Developers will build homes that have a positive impact, with reduced waste and healthier interiors. They will achieve this by incorporating Schneider Electric's smart product lines, including Wiser Smart Homes and Modular Switches.


• October 2022 – Roku, which provides streaming and smart home devices, collaborated with Walmart to launch its latest suite of smart home devices, including video doorbells, plugs, security cameras, and lighting devices, among others. This collaboration enabled Roku's business expansion due to the deployment of its smart devices in 3,500 Walmart stores in the U.S.


• April 2022 – ABB Ltd. partnered with Samsung Electronics Co., Ltd. to broaden its range of home automation products. This collaboration aims to simplify cost reduction for new customers and promote a positive environmental impact.

REPORT COVERAGE

The research report includes a detailed analysis of the market and focuses on key aspects such as prominent companies, product types, and leading product applications. Besides this, it offers insights into the latest market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation: