Strong market growth is expected to last for years to come
The number smart homes in Europe and North America reached 17.9 million in 2015, according to a new study. North America is the world’s most advanced smart home market and the region had an installed base of 12.7 million smart homes at the end of the year, a 56% year on year growth, said Berg Insight.
The strong market growth is expected to last for years to come, driving the number of smart homes in North America to 46.2 million by 2020, which corresponds to 35% of all households.
The European market is two to three years behind North America in terms of penetration and market maturity, said Berg. At the end of 2015, there were 5.3 million smart homes in Europe and the market is forecasted to grow at a compound annual growth rate (CAGR) of 54% in the next five years to reach 44.9 million smart homes by 2020, which corresponds to 20% of all European households.
The most successful products on the smart home market include smart thermostats, security systems, smart light bulbs, network cameras and multi-room audio systems from vendors such as Philips Lighting, Honeywell, Belkin, Nest, Ecobee, MyFox, Sonos, Canary, Netatmo and D-Link.
Major vendors of comprehensive whole-home smart home systems include a mix of energy, security and communication service providers and home automation specialists such as Vivint, ADT, Comcast, Control4 and AT&T in North America and Verisure, eQ-3, RWE, Deutsche Telekom and Loxone in Europe.
“There is no doubt that regular consumers in the future will own and operate a wide range of connected objects in their homes, from connected home appliances and luminaires to thermostats and security devices” said Johan Svanberg, senior analyst, Berg Insight.
The smart home market is still in its infancy though and many smart home ecosystems are underdeveloped and products are often complicated to use, added Svanberg: “Attractive use cases, interoperable devices and well-implemented user interfaces are needed in order to accelerate the market.”
Several ICT industry giants are now betting on voice driven user interfaces to make it easier to control smart home solutions. The Alexa service from Amazon has quickly become popular and shows the value of smart home solutions to a broader audience.
Furthermore, Apple’s HomeKit platform supports the company’s voice driven digital assistant Siri.
Microsoft is likely to push their Cortana service as a foundation for controlling connected devices and services and Google announced its conversational digital assistant named Google Assistant in May 2016.