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Smart Homes and Home Automation – 6th Edition

Smart Homes and Home Automation is the sixth consecutivereport from Berg Insight analysing the latest developments onthe connected home markets in Europe and North America.This report in the M2M Research Series provides you with 285pages of unique business intelligence including 5-year industryforecasts and expert commentary on which to base yourbusiness decisions.

Highlights from the sixth edition of the report:

Insights from 30 executive interviews with market leadingcompanies.
360-degree overview of the smart homes & home automationecosystem.
Summary of industry trends in key vertical market segments.
Statistical data on adoption of smart home systems inEurope and North America.
New market forecasts lasting until 2022.
Detailed reviews of the latest initiatives launched by industryplayers.
Updated profiles of the key vendors on this market.

This report answers the following questions:

Which are the main verticals within smart homes andhome automation?
What are the main drivers behind growth in Europe andNorth America?
What are the challenges and roadblocks towardswidespread adoption?
What are the business models and channels-to-market forsmart home solutions?
Which are the leading whole-home system vendors inEurope and North America?
How are product OEMs and whole home solution vendorspositioning themselves?
What home connectivity technologies are smart homesystem vendors betting on?
What is the potential market size for cellular IoT in homeautomation?
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 rangeof solutions for controlling, monitoring and automating functions in the home. Berg Insight’sdefinition of a smart home system requires that it has a smartphone app or a web portal as auser interface. Devices that only can be controlled with switches, timers, sensors and remotecontrols are thus not included in the scope of this study. Smart home systems can begrouped into seven primary categories: security and access control systems; energymanagement and climate control systems; audio-visual and entertainment systems; lightingand window control systems; healthcare and assisted living systems; home appliances andservice robotics.

The North American smart home market recorded strong growth during 2017. The installedbase of smart home systems increased by 51.1 percent to reach 82.7 million at the year-end.An estimated 8.3 million of these were multifunction or whole-home systems whereas 74.4million were point solutions designed for one specific function. As some homes have morethan one smart system in use, the installed base totalled an estimated 22.3 million smarthomes at the end of the year. This corresponds to 15.9 percent of all households, placingNorth America as the most advanced smart home market in the world. Between 2017 and2022, the number of households that adopt smart home systems is forecasted to grow at acompound annual growth rate (CAGR) of 23.1 percent, resulting in 63.0 million smart homes.Market revenues reached US$ 12.0 billion (€ 10.6 billion) in 2017, an increase of 46.4 percentyear-on-year. The market is expected to grow at a CAGR of 24.7 percent between 2017 and2022, reaching US$ 36.0 billion (€ 32.0 billion) in yearly revenues at the end of the forecastperiod.

The European market for smart home systems is still a few years behind North America, bothin terms of market penetration and maturity. At the end of 2017, there was a total of 57.6million smart home systems in use in the EU28+2 countries, up from 40.0 million in theprevious year. Around 4.3 million of these systems were multifunction or whole-homesystems whereas 53.3 million were point solutions. This corresponds to around 22.5 millionsmart homes when overlaps are taken into account, meaning that 9.9 percent of allhouseholds in Europe were smart at the end of the year. The number of Europeanhouseholds to adopt smart home systems is forecasted to grow at a compound annualgrowth rate (CAGR) of 30.2 percent during the next five years, resulting in 84.0 million smarthomes by 2022. Market revenues grew by 48.2 percent to € 8.9 billion (US$ 10.0 billion) in2017. The market is forecasted to grow at a CAGR of 26.2 percent between 2017 and 2022 toreach € 28.4 billion (US$ 32.0 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 61 percent of the combinedmarket revenues in North America and Europe. The most successful point solutions to date,in terms of sold units, include smart thermostats, smart lamps, smart plugs, network cameras,multi-room audio systems as well as voice controlled smart speakers. These products aremarketed by incumbent OEMs such as Signify, Honeywell, Danfoss, Belkin, Chamberlain,Kwikset and Assa Abloy; service providers such as Altice France and Centrica; and newerentrants such as Nest, Ecobee, Sonos, Canary, Proove, Netatmo, IKEA, Velux and D-Link. Inthe whole-home system market, traditional home automation system vendors such asCrestron Electronics, Control4, Gira and Jung are facing new competition as companies fromadjacent industries have entered the market. Communications and security service providerssuch as ADT, Vivint, Comcast, Brinks Home Security (formerly MONI/Monitronics) and AT&Thave established themselves among the largest whole-home solution vendors in NorthAmerica. Major vendors in Europe include eQ-3, Deutsche Telekom, Verisure, Somfy, Innogyand Loxone.

Smart speakers with built-in voice assistants have had a major impact on the smart homeindustry in 2017. Amazon and Google are the largest vendors of such devices, having acombined market share of over 90 percent. During 2017, many of the well-known smart homedevice and system vendors have made their products compatible with Amazon Alexa andGoogle Assistant and more and more consumers see the benefits of using smart speakers asthe main interface for the smart home. The high growth in the smart homes market can partlybe credited to the popularity of smart speakers.

Executive summary
1 Smart homes, connected homes and home automation
1.1 Introduction
1.2 Types of home automation
1.2.1 Security and access control systems
1.2.2 Energy management and climate control systems
1.2.3 Audio-visual and entertainment systems
1.2.4 Lighting and window control systems
1.2.5 Healthcare and assisted living
1.2.6 Home appliances
1.2.7 Service robotics
1.2.8 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 communications 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 Amazon Alexa
2.3.2 Google Assistant
2.3.3 Android Things and Weave
2.3.4 Apple HomeKit
2.3.5 IFTTT
2.3.6 Open Connectivity Foundation
2.4 Smart home platforms
2.4.2 Amdocs
2.4.3 Arrayent (Prodea Systems)
2.4.4 Ayla Networks
2.4.5 Greenwave Systems
2.4.6 Technicolor
2.4.7 ThroughTek
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
3.1.6 Popularity of smart speakers boost smart home product sales
3.2 Security and access control system vendors
3.2.1 Assa Abloy
3.2.2 August Home (Assa Abloy)
3.2.3 Canary
3.2.4 Chamberlain
3.2.5 Groupe HBF (Otio)
3.2.6 iSmartAlarm
3.2.7 Kwikset
3.2.8 Minut
3.2.9 Schlage
3.2.10 UTC Climate, Controls & Security
3.3 Energy management and climate control system vendors
3.3.1 Climote
3.3.2 Danfoss
3.3.3 Diehl Connectivity Solutions
3.3.4 Ecobee
3.3.5 Eve Systems
3.3.6 Geo
3.3.7 Honeywell
3.3.8 Netatmo
3.3.9 Radio Thermostat Company of America
3.3.10 Schneider Electric
3.3.11 Tado
3.4 Audio-visual and entertainment system vendors
3.4.1 D+M Group (Sound United)
3.4.2 Harman (Samsung Electronics)
3.4.3 Kaleidescape
3.4.4 Logitech
3.4.5 Naim
3.4.6 Sonos
3.4.7 Sony
3.5 Lighting and window control system vendors
3.5.1 CentraLite
3.5.2 iDevices (Hubbell)
3.5.3 IKEA
3.5.4 Leviton
3.5.5 LIFX
3.5.6 Lutron
3.5.7 Osram
3.5.8 Signify (Philips Lighting)
3.5.9 Velux
3.5.10 View
3.6 Healthcare and assisted living
3.6.1 Doro
3.6.2 Greatcall
3.6.3 Hidea Solutions
3.6.4 Qorvo (GreenPeak Technologies)
3.6.5 Sleep Number
3.6.6 Tunstall Healthcare Group
3.6.7 Verklizan
3.7 Home appliances
3.7.1 BSH
3.7.2 Electrolux
3.7.3 GE Appliances (Haier)
3.7.4 Haier
3.7.5 LG Electronics
3.7.6 Whirlpool
3.8 Service Robotics
3.8.1 Double Robotics
3.8.2 Dyson
3.8.3 Husqvarna
3.8.4 iRobot
3.8.5 Neato Robotics
3.8.6 Robomow
3.8.7 Softbank Robotics
3.8.8 Zucchetti Centro Sistemi (Ambrogio Robot)
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 Grenton
4.3.12 Ingersoll Rand
4.3.13 Iris by Lowe’s
4.3.14 Legrand
4.3.15 Loxone Electronics
4.3.16 MiOS
4.3.17 Nest Labs
4.3.18 OBLO Living
4.3.19 Proove (Telldus)
4.3.20 Safe4 Security Group
4.3.21 Samsung Electronics
4.3.22 Somfy
4.3.23 TP-Link
4.3.24 Viva Labs
4.3.25 Wink
4.4 Smart home service providers
4.4.1 ADT
4.4.2 Altice France
4.4.3 AT&T
4.4.4 Brinks Home Security (MONI)
4.4.5 Centrica (British Gas)
4.4.6 Comcast
4.4.7 Cox Communications
4.4.8 Deutsche Telekom (QIVICON)
4.4.9 Innogy
4.4.10 Verisure
4.4.11 Vivint Smart Home
4.4.12 Vodafone
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 Greater consumer awareness benefits all players
5.1.3 Lower price points opens the doors to the mass market
5.1.4 Cloud-based systems and the integrated hub opportunity
5.1.5 Open versus closed smart home ecosystems – getting the timing right
5.1.6 Lack of interoperability causes problems for users
5.1.7 Security and integrity issues when the home is being connected
5.1.8 Smart homes and the Internet of Things
5.1.9 Professional security leads the North American smart home market
5.1.10 Cellular M2M in the smart home market
5.1.11 Mergers and acquisitions in the smart home industry
5.2 Popular smart home product categories
5.2.1 Smart speakers
5.2.2 Smart thermostats
5.2.3 Smart lighting
5.2.4 Smart plugs
5.3 Europe
5.3.1 Revenues
5.3.2 Shipments
5.3.3 Installed base
5.4 North America
5.4.1 Revenues
5.4.2 Shipments
5.4.3 Installed base
List of Figures
Figure 1.1: Example of an alarm system
Figure 1.2: Examples of security and access control systems
Figure 1.3: Examples of energy management and climate control devices
Figure 1.4: Annual energy bill, single-family detached home in the US
Figure 1.5: Sonos audio system
Figure 1.6: Examples of lighting and window control systems
Figure 1.7: Philips Hue lighting system
Figure 1.8: Care@Home activity monitoring solution
Figure 1.9: Samsung Family Hub Smart Fridge
Figure 1.10: Examples of service robots
Figure 1.11: Types of markets for home automation
Figure 1.12: Households, dwelling types and homeownership by country (NA 2017)
Figure 1.13: Households, dwelling types and homeownership by country (EU28+2 2017) 19
Figure 1.14: Definition of luxury versus ultra-luxury home
Figure 1.15: Existing homes and housing starts (North America 2014–2017)
Figure 1.16: Existing homes and housing starts (EU28+2 2014–2016)
Figure 1.17: 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: Dotdot over Thread
Figure 2.6: Examples of IFTTT applets
Figure 3.1: Installed base per application area (EU28+2 and NA 2017)
Figure 3.2: Smart home strategies for product OEMs
Figure 3.3: Examples of incumbents and new entrants by application area
Figure 3.4: The new Yale Assure Lock SL
Figure 3.5: The Kwikset Kevo smart door lock
Figure 3.6: Second generation of Point
Figure 3.7: New Ecobee products
Figure 3.8: Eve Aqua Smart Water Controller
Figure 3.9: Honeywell Lyric Round Thermostat and security controller
Figure 3.10: Marantz Remote App and HEOS by Denon app
Figure 3.11: Logitech Harmony mobile app
Figure 3.12: IKEA Trådfri smart kit
Figure 3.13: SmartCare by Doro
Figure 3.14: Bosch Home Connect
Figure 3.15: LG Electronics’ SmartThinQ ecosystem
Figure 3.16: Dyson 360 Eye Robot Vacuum Cleaner
Figure 4.1: Penetration of whole-home automation systems (EU28+2 and NA 2017)
Figure 4.2: Competitive landscape – Service providers and whole-home system OEMs .. 168
Figure 4.3: Top whole-home system vendors (EU28+2 2017)
Figure 4.4: Top whole-home system vendors (NA 2017)
Figure 4.5: Attach rates in whole-home systems (EU28+2 and NA 2017)
Figure 4.6: Market segments
Figure 4.7: Installed base of whole-home systems (North America 2017)
Figure 4.8: Monitored small alarm systems by country (EU28+2 2017)
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 starter kit
Figure 4.13: Nest thermostat
Figure 4.14: TellStick ZNet Lite Gateway
Figure 4.15: Homegate by Safe4
Figure 4.16: TP-Link’s Deco M9 Plus Smart Home Mesh Wi-Fi System
Figure 4.17: AT&T Digital Life packages
Figure 4.18: Verisure home alarm system
Figure 5.1: Smart home penetration and installed base (EU28+2 and NA 2016–2022)
Figure 5.2: Smart homes with professional security (North America 2016–2022)
Figure 5.3: Cellular connections in the smart home market (2016–2022)

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