Smart Homes and Home Automation – 5th Edition

Smart Homes and Home Automation – 5th Edition

Smart Homes and Home Automation is the fifth consecutive report from Berg Insight analysing the latest developments on the connected home markets in Europe and North America.

This report in the M2M Research Series provides you with 250 pages of unique business intelligence including 5-year industry forecasts and expert commentary on which to base your business decisions.

Highlights from the fifth edition of the report:

Insights from 30 executive interviews with market leading companies.
360-degree overview of the smart homes & home automation ecosystem.
Summary of industry trends in key vertical market segments.
Statistical data on adoption of smart home systems in Europe and North America.
New market forecasts lasting until 2021.
Detailed reviews of the latest initiatives launched by industry players.
Updated profiles of the key vendors on this market.

This report answers the following questions:

Which are the main verticals within smart homes and home automation?
What are the main drivers behind growth in Europe and North America?
What are the challenges and roadblocks towards widespread adoption?
What are the business models and channels-to-market for smart home solutions?
Which are the leading whole-home system vendors in Europe and North America?
How are product OEMs and whole home solution vendors positioning themselves?
What home connectivity technologies are smart home system vendors betting on?
What is the potential market size for cellular IoT in home automation?
How will the smart home market evolve in the next five years?

Executive summary

Smart homes and home automation are ambiguous terms used in reference to a wide range of solutions for controlling, monitoring and automating functions in the home. Berg Insight’s definition of a smart home system requires that it has a smartphone app or a web portal as a user interface. Devices that only can be controlled with switches, timers, sensors and remote controls are thus not included in the scope of this study. Smart home systems can be grouped into six primary categories: energy management and climate control systems; security and access control systems; lighting, window and appliance control systems; home appliances; audio-visual and entertainment systems; and healthcare and assisted living systems.

North America recorded strong growth in the smart home market during 2016. The installed base of smart home systems in the region increased by 58 percent to reach 31.2 million at the year-end. An estimated 5.4 million of these were multifunction or whole-home systems whereas 25.8 million were point solutions designed for one specific function. As some homes have more than one smart system in use, the installed base totalled an estimated 21.8 million smart homes at the end of the year. This corresponds to 16.7 percent of all households, placing North America as the most advanced smart home market in the world. Between 2016 and 2021, the number of households that have adopted smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 27 percent, resulting in 73.0 million smart homes. Market revenues reached US$ 9.9 billion (€ 9.0 billion) in 2016, an increase of 33 percent year-on-year. The market is expected to grow at a CAGR of 22 percent between 2016 and 2021, reaching US$ 27.2 billion (€ 25.0 billion) in yearly revenues at the end of the forecast period.

The European market for smart home systems is still in an early stage and a few years behind North America in terms of penetration and market maturity. At the end of 2016, there were a total of 10.9 million smart home systems in use in the EU28+2 countries, up from 6.1 million in the previous year. Around 1.4 million of these systems were multifunction or whole-home systems whereas 9.5 million were point solutions. This corresponds to around 8.5 million smart homes when overlaps are taken into account, meaning that 3.8 percent of all households in the region were smart at the end of the year. The number of European households that have adopted smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 57 percent during the next five years, resulting in 80.6 million smart homes by 2021. Market revenues grew by 69 percent to € 2.7 billion (US$ 3.0 billion) in 2016. The market is forecasted to grow at a CAGR of 49 percent between 2016 and 2021 to reach € 20.1 billion (US$ 22.0 billion) at the end of the forecast period.

A point solution will in most cases constitute the consumer’s first smart home purchase. Compared to whole-home systems, point solutions generated 62 percent of the combined market revenues in North America and Europe. The most successful point solutions to date include smart thermostats, security systems, smart light bulbs, network cameras and multiroom audio systems. These products are marketed by incumbent OEMs such as Philips Lighting, Honeywell, Danfoss, Belkin, Chamberlain, Kwikset and Assa Abloy; service providers such as SFR and Centrica; and newer entrants such as Nest, Ecobee, Somfy, Sonos, Canary, Proove, Netatmo, IKEA and D-Link. In the whole-home system market, traditional home automation system vendors such as Crestron, Control4, Gira and Jung are facing new competition as companies from adjacent industries have entered the market. Communication and security service providers such as Vivint, ADT, Comcast and AT&T have established themselves among the largest whole-home solution vendors in North America. Major vendors in Europe include eQ-3, Verisure, RWE, Deutsche Telekom and Loxone.

Smartphone apps are today the most common user interface for smart home solutions. Users are however unwilling to launch a number of individual apps to be able to use their connected devices. Instead, cross platform compatible and voice driven user interfaces have the ability to connect and control a wide range of devices and services using simple voice commands. Several ICT industry giants are now betting on voice driven user interfaces to make it easier to control smart home solutions. The Alexa service from Amazon has quickly become popular and Apple’s HomeKit platform supports the company’s voice driven digital assistant Siri. Google has recently launched Google Home powered by its digital assistant. Microsoft will push its Cortana service as a foundation for controlling connected devices and services. There are numerous additional players launching smart speaker products as well.

About the Authors

Johan Fagerberg is co-founder and an experienced analyst with a Master’s degree in Electrical Engineering from Chalmers University of Technology. He has during the past 20 years published numerous articles and reports about M2M/IoT markets.

Anders Frick is a Senior Analyst with a Master’s degree in Media Technology from Linköping University and an MBA degree in Technology Management from National Chiao Tung University. His areas of expertise include smart homes markets and mHealth.

Berg Insight offers premier business intelligence to the telecom industry. We produce concise reports providing key facts and strategic insights about pivotal developments in our focus areas. Berg Insight also offers detailed market forecast databases and advisory services. Our vision is to be the most valuable source of intelligence for our customers.

Executive summary
1 Smart homes, connected homes and home automation
1.1 Introduction
1.2 Types of home automation
1.2.1 Energy management and climate control systems
1.2.2 Security and access control systems
1.2.3 Lighting and window control systems
1.2.4 Home appliances
1.2.5 Audio-visual and entertainment systems
1.2.6 Healthcare and assisted living
1.2.7 Multifunction and whole-home automation systems
1.3 Home automation market segments
1.3.1 Mainstream houses and multi-family dwellings
1.3.2 The custom (luxury) segment
1.3.3 New homes versus existing homes
1.4 Channels to market
1.4.1 Professional installation
1.4.2 Retail
1.4.3 Service providers
2 Networks and communication technologies
2.1 Overview
2.1.1 Different approaches to establishing interoperability
2.1.2 Technology choices of product OEMs
2.1.3 Technology choices of whole-home solution vendors
2.1.4 The role of smart home platform vendors is changing
2.2 Smart home networking technologies
2.2.1 ANT
2.2.2 Bluetooth
2.2.3 DECT ULE
2.2.4 EnOcean
2.2.5 HomePlug
2.2.6 HomeGrid
2.2.7 Insteon
2.2.8 Io-homecontrol
2.2.9 KNX
2.2.10 LPWA
2.2.11 OpenTherm
2.2.12 Thread
2.2.13 Wi-Fi
2.2.14 X10
2.2.15 Zigbee
2.2.16 Z-Wave
2.3 Smart home middleware and ecosystems
2.3.1 AllSeen Alliance (merging with OCF)
2.3.2 Amazon Alexa
2.3.3 Android Things and Weave
2.3.4 Google Assistant
2.3.5 Apple HomeKit
2.3.6 IFTTT
2.3.7 Open Connectivity Foundation
2.4 Smart home platforms
2.4.2 Arrayent
2.4.3 Greenwave Systems
2.4.4 iControl Networks
2.4.5 Technicolor
2.4.6 ThroughTek
2.4.7 Zonoff
3 Technology providers and OEMs
3.1 Market overview
3.1.1 Compatibility with whole-home systems
3.1.2 Point solutions are gaining traction among consumers
3.1.3 Smart home strategies for product OEMs
3.1.4 Connectivity enables new value propositions
3.1.5 New entrants challenge incumbents with connected experiences
3.2 Security and access control system vendors
3.2.1 Assa Abloy
3.2.2 August
3.2.3 Canary
3.2.4 Chamberlain
3.2.5 FortrezZ
3.2.6 Groupe HBF (Otio)
3.2.7 iSmartAlarm
3.2.8 Kwikset
3.2.9 Minut
3.2.10 MyFox (Somfy Protect)
3.2.11 Safe4 Security Group
3.2.12 Schlage
3.2.13 Tyco (Johnson Controls)
3.2.14 Zaplox
3.2.15 UTC Climate, Controls & Security
3.3 Home appliances
3.3.1 BSH
3.3.2 Electrolux
3.3.3 GE Appliances
3.3.4 Haier
3.3.5 LG Electronics
3.3.6 Whirlpool
3.4 Lighting and window control system vendors
3.4.1 CentraLite
3.4.2 iDevices (Hubbell)
3.4.3 IKEA
3.4.4 Leviton
3.4.5 LIFX
3.4.6 Lutron
3.4.7 Osram
3.4.8 Philips Lighting
3.4.9 Somfy
3.4.10 View
3.5 Audio-visual and entertainment system vendors
3.5.1 D+M Group (Sound United)
3.5.2 Huny
3.5.3 Kaleidescape
3.5.4 Logitech
3.5.5 Naim
3.5.6 Niles Audio
3.5.7 Sonos
3.5.8 Sony
3.6 Energy management and climate control system vendors
3.6.1 Climote
3.6.2 Danfoss
3.6.3 Diehl Connectivity Solutions
3.6.4 Ecobee
3.6.5 Geo
3.6.6 Honeywell
3.6.7 Netatmo
3.6.8 QGate
3.6.9 Radio Thermostat Company of America
3.6.10 Schneider Electric
3.6.11 Tado
3.7 Healthcare and assisted living
3.7.1 Doro
3.7.2 Qorvo (GreenPeak Technologies)
3.7.3 Hidea Solutions
3.7.4 Legrand
3.7.5 Lively
3.7.6 Select Comfort
3.7.7 Tunstall Healthcare Group
3.7.8 Verklizan
4 Service providers and whole-home system vendors
4.1 Market overview
4.1.1 The European market
4.1.2 The North American market
4.1.3 Attach rates per application area in whole-home systems
4.2 Market segments and go-to-market strategies
4.2.1 Professionally monitored security
4.2.2 Traditional home automation
4.2.3 DIY systems
4.2.4 Fee-based home control
4.3 Whole-home system OEMs
4.3.1 ABB
4.3.2 Belkin
4.3.3 Bosch
4.3.4 Control4
4.3.5 Crestron Electronics
4.3.6 D-Link
4.3.7 Essence Group
4.3.8 eQ-3
4.3.9 Fibar Group (Fibaro)
4.3.10 Gigaset
4.3.11 Ingersoll Rand
4.3.12 Loxone Electronics
4.3.13 M2M Solution
4.3.14 MiOS
4.3.15 Nest
4.3.16 OBLO Living
4.3.17 Proove (Telldus)
4.3.18 Samsung SmartThings
4.3.19 TP-Link
4.3.20 Viva Labs
4.3.21 Wink
4.4 Smart home service providers
4.4.1 ADT
4.4.2 AT&T
4.4.3 Centrica (British Gas)
4.4.4 Comcast
4.4.5 Cox Communications
4.4.6 Deutsche Telekom (QIVICON)
4.4.7 MONI
4.4.8 RWE / Innogy
4.4.9 SFR
4.4.10 Time Warner Cable
4.4.11 Verisure
4.4.12 Vivint
5 Market forecasts and conclusions
5.1 Market trends and analysis
5.1.1 Focus on attractive use cases, user friendliness and interoperability
5.1.2 Voice controlled user interfaces anticipated to break down mobile app silos . 231
5.1.3 Greater consumer awareness benefits all players
5.1.4 Lower price points opens the doors to the mass market
5.1.5 Cloud-based systems and the integrated hub opportunity
5.1.6 Open versus closed smart home ecosystems – getting the timing right
5.1.7 Lack of interoperability causes problems for users
5.1.8 Security and integrity issues when the home is being connected
5.1.9 Smart homes and the Internet of Things
5.1.10 Professional security leads the North American smart home market
5.1.11 Smart thermostats gain traction in Europe and North America
5.1.12 Cellular M2M in the smart home market
5.2 Europe
5.2.1 Revenues
5.2.2 Shipments
5.2.3 Installed base
5.3 North America
5.3.1 Revenues
5.3.2 Shipments
5.3.3 Installed base
List of Figures
Figure 1.1: Examples of energy management and climate control devices
Figure 1.2: Annual energy bill, single-family detached home in the US
Figure 1.3: Example of an alarm system
Figure 1.4: Examples of security and access control systems
Figure 1.5: Examples of lighting and window control systems
Figure 1.6: Philips Hue lighting system
Figure 1.7: Samsung Family Hub Smart Fridge
Figure 1.8: Sonos audio system
Figure 1.9: Care@Home activity monitoring solution
Figure 1.10: Types of markets for home automation
Figure 1.11: Households, dwelling types and homeownership by country (EU28+2 2014) 16
Figure 1.12: Households, dwelling types and homeownership by country (NA 2014)
Figure 1.13: Definition of luxury versus ultra-luxury home
Figure 1.14: Existing homes and housing starts (North America 2011–2014)
Figure 1.15: Existing homes and housing starts (EU28+2 2011–2014)
Figure 1.16: Channels to market
Figure 2.1: Illustration of interoperability at different levels
Figure 2.2: How many is too many?
Figure 2.3: Examples of technology choices by product OEMs
Figure 2.4: Examples of technology choices by whole-home solution vendors
Figure 2.5: Distribution of the 20 million Z-Wave units shipped in 2016
Figure 2.6: Examples of IFTTT recipes
Figure 2.7: Zonoff’s platform solution
Figure 3.1: Installed base per application area (EU28+2 and NA 2016)
Figure 3.2: Smart home strategies for product OEMs
Figure 3.3: Examples of incumbents and new entrants by application area
Figure 3.4: Part of the August product suite
Figure 3.5: The Kwikset Kevo smart door lock
Figure 3.6: Point from Minut
Figure 3.7: Homegate by Safe4
Figure 3.8: LG Electronics’ SmartThinQ ecosystem
Figure 3.9: IKEA TRÅDFRI smart kit
Figure 3.10: Marantz Remote App and HEOS by Denon app
Figure 3.11: Logitech Harmony mobile app
Figure 3.12: Ecobee3 thermostat, remote sensor and app
Figure 3.13: Honeywell Lyric Round Thermostat and security controller
Figure 3.14: Doro Care’s CareIP telecare system
Figure 4.1: Penetration of whole-home automation systems (EU28+2 and NA 2016)
Figure 4.2: Competitive landscape – Service providers and whole-home system OEMs .. 154
Figure 4.3: Top whole-home system vendors (EU28+2 2016)
Figure 4.4: Top whole-home system vendors (NA 2016)
Figure 4.5: Attach rates in whole-home systems (EU28+2 and NA 2016)
Figure 4.6: Market segments
Figure 4.7: Installed base of professional security systems (North America 2016)
Figure 4.8: Monitored small alarm systems by country (EU28+2 2016)
Figure 4.9: Belkin’s WeMo product family
Figure 4.10: eQ-3 HomeMatic IP system
Figure 4.11: Examples of Fibaro products
Figure 4.12: Gigaset Elements app and Starter Kit
Figure 4.13: Nest thermostat
Figure 4.14: Tellstick Net from Proove
Figure 4.15: AT&T Digital Life packages
Figure 4.16: Comcast’s smart home product offering
Figure 4.17: SFR’s smart home packages
Figure 4.18: Verisure Home Safety Plus alarm system
Figure 5.1: Smart home penetration and installed base (EU28+2 and NA 2015–2021)
Figure 5.2: Smart speakers by Amazon, Google, Apple and Harman Kardon
Figure 5.3: Smart homes with professional security (North America 2015–2021)
Figure 5.4: Homes with smart thermostats (EU28+2 and NA 2015–2021)
Figure 5.5: Cellular connections in the smart home market (2015–2021)
Figure 5.6: Market overview (EU28+2 2015–2021)
Figure 5.7: Smart home revenues (EU28+2 2015–2021)
Figure 5.8: Market share by whole-home segment (EU28+2 2016–2021)
Figure 5.9: Shipments per application area (EU28+2 2015–2021)
Figure 5.10: Installed base per application area (EU28+2 2015–2021)
Figure 5.11: Market overview (North America 2015–2021)
Figure 5.12: Smart home revenues (North America 2015–2021)
Figure 5.13: Market share by whole-home segment (North America 2016–2021)
Figure 5.14: Shipments per application area (North America 2015–2021)
Figure 5.15: Installed base per application area (North America 2015–2021)

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