Smart Appliance Market Set To Soar
IHS has forecast that the market will grow at a five-year compound annual growth rate of 134 per cent, from fewer than one million units shipped in 2014 to more than 223 million units by 2020.
The scope of research includes washing machines, clothes dryers, dishwashers, refrigerators, room air conditioners and large cooking appliances, however if other types of connected appliances are included – such as coffee machines, robotic vacuums, rice cookers, microwave ovens, air purifiers and electric toothbrushes – IHS forecasts the worldwide market will reach 700 million units by 2020.
“IHS uses a conservative approach in our forecasting models and there is certainly opportunity for the market to grow even more,” Dinesh Kithany, IHS Technology senior analyst of home appliances, commented.
“However, growth rates depend on how rapidly appliance makers educate and engage with end consumers and provide them with an appropriate price-to-value benefit.”
Among the factors affecting smart appliance adoption, IHS notes energy management initiatives, such as dynamic pricing, government initiatives and structure of utilities will play a role.
IHS also notes standards for interoperability, along with other marketplace dynamics covering product pricing, retail environment, competitive landscape, the approaches adopted by suppliers and overall interest in smart home technology will play a role in appliance adoption.
Samsung and LG Electronics are among the companies vying for first-mover advantage, IHS observed, having shifted focus from businesses such as mobile devices and television to smart home technology devices.
“Electronics giants could also benefit from the convergence of mobile devices and TVs with their home appliance business lines, as all of these devices can integrate well with smart technologies,” Kithany commented.
IHS expects that over the next two-to-three years the market will consolidate, with just a couple of connectivity platforms, operating systems, along with a small number of technology-oriented appliance companies dominating the market by 2018.
“Consolidation will drive consumers toward earlier adoption of smart home technology, with growth similar to what the mobile phone industry experienced just a few years ago,” Kithany stated.