Smart Home Market Booming, Lighting, Entertainment + Security In Big Demand
The market for smart home devices is booming with consumers buying over 895 million devices last year with entertainment and security the two biggest categories with lighting tipped to grow this year.
Overall, the market grew by grew 11.7% in 2021 compared to 2020 according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker.
Networked video entertainment devices – such as smart TVs, streaming sticks, and internet-connected set-top boxes – held the largest volume of shipments with 34.7% share and grew 4.8% year-over-year in 2021.
Smart lighting devices are forecast to be the fastest growing category of devices with a five-year compound annual growth rate (CAGR) of 23.6%.
Driving the market’s growth at a global level is rising broadband penetration, rising disposable incomes, and rising consumer awareness of smart home devices and the cost savings, convenience, and energy efficiencies that they can deliver.
The demand came despite COVID lockdowns and supply chain problems.
IDC anticipates that the worldwide smart home device market will see steady growth over the next five years as smart home users expand their smart home ecosystems and seek more sophisticated connected experiences.
The market’s growth will also be driven by high broadband penetration and increasing numbers of wireless home networks, although consumer concerns around privacy, security, costs, and interoperability will constrain the market’s development for the foreseeable future.
“The notion of the ‘smart home’ is well and truly mainstream in many parts of the world now,” said Adam Wright, senior research analyst, Internet of Things: Consumer. “Smart home devices have proved their merit during the global pandemic as adding meaningful value to people’s lives at home, such as easing social isolation, enhancing home security, and delivering convenience and entertainment, among other benefits. As we look ahead, and buoyed by strong demand, the market is poised for solid growth despite ongoing disruptions from supply chains, logistics, and uneven economies across the globe.”
The Asia/Pacific region was the second largest segment by shipment volume with 31% of shipments and had a year-over-year growth rate of 10.8%, the US market was #1 with growth of 11.6%.
“While there’s plenty of growth to be had in the smart home market, there are still challenges ahead as lack of interoperability and the longevity of smaller OEMs are issues that will negatively impact the market,” said Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers.
“While the upcoming Matter standard will help negate some of these concerns, OEMs will still need to offer a robust services component in addition to hardware in order to stay relevant.”
Smart Home Device Categories by Shipment Volume, Market Share, and CAGR, 2021 and 2026 (* forecast) (shipments in millions)