Home > Latest News > Is The Smart Home’s Future Under A Cloud?

Is The Smart Home’s Future Under A Cloud?

The news for the smart home seems grim. You might think that users had decided that flicking a light switch in the corner is easier than asking Siri or Google to do it for you. But there’s more to smart home device numbers released by IDC, and the longer term prognosis still looks promising.

According to IDC, global shipments of smart home devices continued to decline in Q1, 2023, with shipments falling 5.6 percent year-on-year to 186.0 million units. The biggest culprits appear to be smart speakers and networked video entertainment devices. They faced the steepest declines in Q1, down 15.4 percent and 7.8 percent respectively compared to the same time last year.

Looking ahead, the immediate prognosis doesn’t look rosy either, especially with the current economic conditions. “IDC expects the market to decline by 1.8 per cent overall in 2023 as weak consumer demand and economic volatility continue to put significant downward pressure on the market,” it says.

But longer term there is optimism. “Although much uncertainty exists, IDC expects the market will return to growth in 2024 and continue through 2027 with device volumes reaching 1.1 billion shipments in 2027”.

In other words, IDC is predicting an almost 6-fold increase in global smart home device shipments in just four years.

So why the disparity? The problem is a lack of upgrades. Users have already bought all the Apple HomePods, Alexa and Google Home units that they need, for now, and there’s little motivate for them to upgrade or replace them. The launch of Matter, a protocol that lets Google, Apple and Amazon smart home devices interact with one another, hasn’t put sparkle into the market yet.

“While there have been pockets of growth, the market has largely stalled due to lack of meaningful upgrades between one generation of devices and the next,” says Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers.

“Even the launch of the Matter standard has not been enough to spur demand despite offering some ease of use.”

One of the issues is the length of time it is taking for smart home concepts to take off in the broader population. Many people don’t see this technology saving them time or money. At the moment, the smart home remains a niche market for the tech savvy.

Credit: Yanko Design

In its longer term, more positive projection, IDC expects the benefits of smart home technology to penetrate the broader population, and new, emerging markets to develop.

“Apart from smart speakers and networked video entertainment devices, many other smart home categories such as lighting, thermostats, and home monitoring and security devices are expected to witness high growth over the next five years in part due to rising consumer awareness of smart home devices in many parts of the world and the rise of emerging markets.

“In more mature markets like the United States, high installed bases of devices coupled with issues of underutilization, ongoing disruptions form supply chains, logistics issues, high inflation, and record high credit card debt have impacted the market’s growth in 2022 and the first part of 2023 and are expected to continue to put downward pressure on the market for the foreseeable future,” says IDC.

“But other regions that are earlier in their adoption curve like Latin America and parts of Asia/Pacific have much opportunity for growth.”

IDC predicts 857 million smart home units will be shipped by year’s end, with video entertainment (279 million), and home monitoring and security (192 million), the biggest categories. They come in well ahead of smart speakers (107 million) and lighting (101.9 million).

The proportion of home monitoring/security and lighting smart devices shipped will continue to rise to 2027, while the proportion of video entertainment, smart speakers and thermostat devices among smart home devices sold will drop over the years.

Nevertheless, IDC is still banking on the public at large warming to smart technology. That will depend on the innovation ahead.

You may also like
Samsung & Google Develop Dolby Atmos Substitute
IKEA & Big W Now Offer 5 Weeks Leave
iOS 17.2 Beta Allows Users To Change Notification Sounds
Apple Users Warned About Fake Chrome Update
Google Ads Found On Sanctioned Sites