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?
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.
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