Smart Home Automation Market is forecast to reach $170.2 billion by 2025, at a CAGR of 11.9% during 2020-2025 due to its rapid adoption across residential applications and increasing demand for features such as the convenience of remote operation and exceptional experience offered by smart home automation is likely boost the market growth over the forecast period. In addition the advancement of Internet accessibility and the growing penetration of Internet of Things (IoT) which helps in the move to direct digital controls for better machine to machine (M2M) communication have encouraged users to adopt the smart home automation technology which accelerate the market growth in the forecast period.
Component – Segment Analysis
The service segment is expected to grow at a highest CAGR of 9.5% in the forecast period owing to increasing demand and adoption of integrated services, which is likely to witness steady growth and thus remain dominant throughout the forecast period. Rapid advances in smart home automation system as well as using advanced technologies such as security and access, lighting and window, audio-visual and entertainment, energy management and climate and integrated solutions to add value to the provision of urban services require authorization for sustainable development of new methods which may involve the integration of service that would improve the competitiveness of the environment in which smart home automation system operates. All these advancements are expected to accelerate the market in the forecast period.
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Application – Segment Analysis
The smart kitchen segment is expected to witness highest CAGR of 8.9% owing to the high demand for smart appliances and with pacing technological advancements such as Internet of Things the kitchen concept has gone through very radical change with a major focus on increasing efficiency around the kitchen and reducing the time spent in cleaning and cooking. IOT is a growing network of everyday objects, connecting industrial machines to consumer home appliances that can share information and complete tasks, while people are engaged in other routine activities. All these advancements will likely to create opportunities for smart kitchen segment on smart home automation market.
Geography – Segment Analysis
In 2018, North America dominated the Smart Home Market share by more than 35%, followed by APAC and Europe. The economy of North America is majorly influenced by the countries such as U.S. and Canada. In these countries, presence of leading players including Honeywell International Inc., Acuity Brands, Inc., Johnson Controls Inc., United Technologies Corporation and Crestron Electronics, Inc. etc. are supplementing the market growth with their innovative products and promotions. In addition to this high rate of adoption and awareness of technological improvement in this region. For Instance, According to the report given by in 2018, more than one-third of US consumers have two or more smart home devices shows the expansion of smart home automation market in North America.
Drivers – Smart Home Automation Market
Advances in technology and enhanced security options have expanded the global adoption of home automation devices. The development of automated control systems has been simplified with the introduction of various wireless technologies such as ZigBee and Bluetooth and different standards for home automated controls, such as EnOcean and Z-wave, have increased the adaptability of different components. The home automation market is also driven by advancements such as IoT and growing adoption of the home monitoring system, increasing the need for home monitoring from remote locations and increasing consumer awareness of the convenience of smart home devices, including lighting and automated security systems are expected to accelerate the growth of the market in the forecast period.
Implementation of Stringent Government Regulations
The stringent regulations from regulatory bodies are bringing disruption in the power industry, with rise in power consumption. At present, regulatory bodies are focusing on effective utilization and manage electricity consumption by creating awareness about domotics or smart house. Different regulations as imposed by the respective authorities. For instance, in 2018, China’s five-year plan targets for energy efficiency projects. Similarly, European 2020 energy targets to reach net-zero energy districts form nearly-zero energy buildings or automation buildings in public and private buildings. These regulations are anticipated to boost the growth in adoption of smart automated controls during the forecast period.
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Challenges – Smart Home Automation Market
High installation cost for home automation systems
High installation cost is required to deploy smart home automation. For instance, the average cost to install home automation varies in between $5000 to $9000 which is very high which increases the payback period, thus limiting the adoption of these controls in many regions. On the other hand increase in prices of components, such as controlled devices, sensors, and interface devices, during the forecast period is expected to eventually increase the payback time, thereby leading to a lower adoption of smart home automation which hamper the market in the forecast period.
Partnership, acquisitions and technology launches are key strategies adopted by players in the Smart Home Automation Market. In 2018, the market of Smart Home Automation industry outlook has been consolidated by the top five players accounting for 55% of the market share. Smart Home Automation market top 10 companies include ABB Ltd., Control4 Corporation, Crestron Electronics, Honeywell International Inc., Ingersoll-Rand plc, Johnson Controls, Legrand SA, Leviton Manufacturing Company, Lutron Electronics Co., Schneider Electric, and Siemens AG among others.
In November 2019, Germany industrial giant Siemens has announced a deal to acquire US startup Pixeom for an undisclosed fee, in a move to boost its industrial automation, digitalization division and smart home automation.
In February 2019, Control4 acquired Neeo, a Switzerland-based company specializing in multi-device remote controls.
The smart kitchen segment is expected to witness highest CAGR owing to the high demand for smart appliances and with pacing technological advancements such as Internet of Things.
The service segment is expected to grow at a highest CAGR in the forecast period owing to increasing adoption of the smart home automation technology.
North America dominated the smart home automation market with a share of more than 33.57% due to presence of developed countries such as U.S. and Canada where there is high adoption and awareness of technological improvement.
Major Players in Smart home automation market include ABB Ltd., Control4 Corporation, Crestron Electronics, Honeywell International Inc., Ingersoll-Rand plc, Johnson Controls, Legrand SA, Leviton Manufacturing Company, Lutron Electronics Co., Schneider Electric, and Siemens AG among others.
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