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The Smart home market is expected to grow from USD 76.6 billion in 2018 to USD 151.4 billion by 2024, at a CAGR of 12.02%.
The growth of the system is driven by various factors, such as a large base of internet users and increased adoption of smart devices; rise in the awareness of fitness and healthy lifestyles owning to the high disposable income in developing economies; high importance of home monitoring from remote locations; rise in the need for energy- saving and low carbon emission solutions; cost reduction measures enabled by market; rapid proliferation of smartphones and smart gadgets; existence of market players focusing on expanding their adoption in smart home product portfolios; and widespread concern about safety, security, and convenience smart home market.
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Entertainment and other controls segment to hold the largest share of the smart home market during the forecast period
Entertainment has become an important part of life as it provides relaxation and rejuvenation. A multi-room entertainment control system allows the user to centralize all connected devices and then listen to, watch, and control that equipment from every room in the house simultaneously or independently. Major control systems used in smart homes market system are audio, volume, and multimedia room controls. The growth of the market for audio, volume, and multimedia room controls is driven by the convenience offered by these controls for managing as well as controlling the entertainment systems within a house. Advancements in wireless communication technologies is a major factor in boosting the growth of the market for home theater system controls, thereby driving the overall adoption in smart home market for entertainment controls. The large market share of this segment can be attributed to the high penetration rate of products such as smart meters and smoke detectors. The increasing cost of electricity is a major concern that drives household consumers toward energy savings. Moreover, the increasing popularity of smart plugs, smart hubs, and smart locks is also fueling the adoption of control systems.
Behavioral type software and services to hold the largest market size during the forecast period
The increasing connectivity between machine-to-machine solutions and the Internet of Things is driving the growth of the smart home and energy management markets, which has, in turn, influenced the growth of the market for software and services for smart homes market. The behavioral type software and services help analyze energy-related data and forward it to end users. This category is restricted to transmitting and receiving data and does not perform intelligent actions like the proactive type. Behavioral type solutions provide direct feedback to end users, thereby providing the basic information regarding the real-time energy data, along with the historical data reflecting energy usage. Therefore, behavioral type software and services are likely to hold the largest smart home market share in 2018.
Market in APAC is expected to grow at a significant rate during the forecast period
The smart home market in APAC is expected to grow at the highest rate during the forecast period. Factors driving the growth of the market in this region include strong economic growth, increased population, and improved standard of living, and rapid urbanization that leads to a sophisticated infrastructure. China is likely to account for the largest size of the market in APAC in 2018. However, with the growth of the smart home industry and large-scale implementation of hardware and software solutions in China and Japan, the market in these countries is expected to grow at a higher rate during the forecast period. APAC is considered as a huge market for smart home system because of the considerable rate of implementation of various products such as lighting controls, HVAC controls, security and access controls, among others, in the region of smart home market.
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Key market players
The smart home market is currently dominated by Johnson Controls International (Ireland), United Technologies Corporation (US), Schneider Electric (France), Honeywell International, Inc. (US), and Siemens AG (Germany). A few of the major strategies adopted by these players to compete in the market include product launches and developments, partnerships, and mergers and acquisitions.