Smart Home Market Size, Share & Growth

Updated on : November 04, 2024

Smart Home Market Size

The global smart home market size was valued at USD 84.5 billion in 2024 and is projected to reach USD 116.4 billion by 2029; growing at a CAGR of 6.6% during the forecast period from 2024 to 2029 . The increasing number of internet users and growing adoption of smart devices, Increasing disposable income in emerging economies, and concerns about safety, security, and convenience among the general population are attributed to the ever-increasing demand for smart home systems.

Now, AI and Gen Al are pushing convenience, efficiency, and personalization to another level in the smart home market. What these advanced technologies bring to the next level are smart devices; they are capable of learning from user behaviors and adapting to user preferences to reach an accuracy never seen before in the prediction of needs. House managing automation, energy consumption optimization, safety measure enhancing—all AI-driven. Gen Al works on the development of more intuitive and interactive user experiences. Further down the line of development, one continues in the same vein: Al's inclusion in smart home ecosystems is going to bring in an overhaul experience for everyday living at home—smarter, safer, and more responsive to the unique requirements of its occupants.

Attractive opportunities in the smart home market

Smart Home Market Analysis Forecast to 2029

To know about the assumptions considered for the study, Request for Free Sample Report

Smart Home Market Trends :

Driver: Increasing number of internet users and growing adoption of smart devices

The IoT has gained much attention among residential consumers, given the advantages attained by connecting household products to the internet. Connecting products, software algorithms, and services with end users, and providing them with flowability, the IoT facilitates data smoothly, aiding in real-time decisions. It has shown its efficiency and enhanced the quality and consistency of the automation systems. That is why scale companies across the world are putting huge investments in the loT industry. It appears that traditional practices of most businesses are trending toward loT; hence, it would reach huge numbers of application areas, such as lighting, HVAC, security, healthcare, and entertainment.

That is to say, the consumer shift towards video doorbells, voice-assisted technologies such as Alexa and Google Home, and surveillance systems is expected to drive the smart home market share. On the other hand, growth in consumer loT adoption is driven by the increasing penetration of the internet, growing usage of smartphones, and expansion of social network platforms. The growing internet users across the world are likely to increase the growth of the overall loT market, as there is a rise in the adoption rate of internet-enabled smart devices such as radio frequency identification, barcode scanners, and mobile computers.

Restraint: Convenience-driven rather than necessity-driven market

Smart homes provide convenience and sophisticated measures to operate a lot of electronic products in the household. These products are usually assumed to simplify daily activities rather than solve energy-efficiency issues. Many concerns are associated with the exclusivity of smart home technology. The technology is often viewed as a luxury, affordable only to some affluent stratum of society. These systems still have to make the homeowners realize the cost and energy savings they offer. To get complete home automation, the buyer has to further invest in displays, software, sensors, and analytical solutions. An average homeowner is often reluctant to learn the information and processes necessary for the installation and operation of hardware devices. Thus, perceived usefulness and perceived ease of use of the system by the homeowner may affect the market negatively. Other than do-it-yourself DIY home automation solutions, in the case of appointment of service providers by the home owners to monitor and control smart home products on a contract basis, maintenance cost has to be paid every month or year that might not be afforded by an average homeowner. This acts as a restraining factor for the growth of the smart home market , mainly in regions like Asia Pacific and RoW Middle East, South America, and Africa, wherein the economies are still developing.

Opportunity: Favorable government regulations to promote green buildings

A green building is a structure that uses environmentally responsible and resource-efficient processes in order to reduce negative impacts on human health and the environment, which goes all the way from siting through design, construction, operation, maintenance, renovation, and demolition of a building's lifecycle. Significant methods of developing sustainable buildings incorporate specifications for:

Local green building materials, reduction of loads, system optimization, and on-site renewable energy generation are some of the strategies. Buildings use up to 40% of total energy while GHG emissions are 30% of the global source of these gases, according to the United Nations Environment Program. For instance, in Hong Kong, building GHG emissions are nearly 70%. These facts demonstrate that sustainable development of buildings would massively help decrease the quantum of GHG emissions coming out from the construction industry into the atmosphere.

Basically, any green building design balances homebuilding with a sustainable environment. Due to the reduction in the consumption of energy and proliferation of environmental wastes, the concept of green buildings has been supported by various initiatives across the globe. Although the number of new buildings is increasing yearly in Asia due to rapid urbanization, the low electricity prices of some Asian countries often do not encourage energy-saving practices in buildings. Under such circumstances, it is often the government that initiates building energy regulations to promote building energy efficiency. Building energy efficiency standards can be either mandatory or voluntary based on the country. For instance, countries such as Indonesia, the Philippines, Malaysia, and Vietnam have mixed standards-that is, both mandatory and voluntary-while Singapore and Thailand have opted for mandatory regulations for energy conservation in their building energy performance requirements.

Challenge: Difficulties in linking disparate systems, limited functionalities, and lack of open standards

Currently, the smart home market share is fragmented, with competing manufacturers developing different smart home systems using various technologies. While it is easy to integrate devices from the same manufacturer or vendor, it is quite hard to integrate disparate systems offered by different manufacturers or vendors. It results in limited functionalities and unreliable services of devices from disparate vendors normally. Furthermore, most of the systems that are in the market have complex interfaces that prevent further expansion of the capabilities of smart home systems. On deployment, the lack of interoperability is a major obstacle to the acceptance of smart home technology solutions. Before consumers can have current home automation systems ready for use, they have to plough through a vast variety of wireless technologies in an attempt to find the products that best suit their needs and can coexist with the system that is already in place. Therefore, issues of hooking up disparate systems and the difficulty of integrating security systems are major challenges that smart home device and control manufacturers have to contend with. Due to this, smart home device manufacturers are instead focusing on developing open protocol devices with either BACnet or LonMark interoperability since these are the only open standard protocols for communication. However, in In this new world of convergence, interoperable systems that adhere to industry standards must be able to connect with other kinds of equipment, as easily done and integrated into the network. Interoperability from BACnet and LonMark alone is not enough to ensure complete enterprise information compatibility and interoperability. Zigbee, EnOcean, Z-wave, and Wi-Fi provide wireless communication across various equipment of smart homes; however, system manufacturers turn to Zigbee for the purpose of wireless communications most of the time. The best system would be one that supports high data throughput for streaming applications, allows intermittent bursts of small packets of sensor data, consumes enough energy to support high throughput, and supports low-power applications. The security would be provided by the encryption of the signals. Similarly, the network architecture would accommodate a considerable number of systems whereby the user can add new devices with ease. The sad thing is that there is a miss of at least one interoperability standard to address all the needs for the system performance.

Smart home Market Ecosystem

Prominent companies in this market include well-established, financially stable smart home systems providers such as Johnson Controls Inc. (Ireland), Honeywell International Inc. (US), Schneider Electric (France), Siemens (Germany), ASSA ABLOY (Sweden). These companies have been operating in the market for several years and possess a diversified product portfolio and strong global sales and marketing networks. Along with the well-established companies, there are a large number of small and medium companies operating in this market, such as Keus (India),Caavo (US), and Govee (US).

Smart Home Market Share 

By sales channel, Indirect sales segment is expected to grow with the highest CAGR from 2024 to 2029.

The highest CAGR of 7.2% is anticipated for the indirect sales segment over the course of the projected period. There are numerous third-party service providers or indirect sales channels in the smart home industry. The majority of the market participants are able to provide services to end customers because they have robust sales channels and distribution networks. Selling smart gadgets and products through both online and offline channels is known as indirect sales channeling. Retailers, wholesalers, value-added resellers, and independent cellular network carriers are examples of the offline sales channels.

By installation type, retrofit installations segment is expected to grow with the highest CAGR from 2024 to 2029.

It is projected that retrofit installations will see the highest growth at a CAGR of 8.4% during the forecast. Retrofit installations offer convenience in terms of making a home smart without major renovations. This would support gradual and more personalized smart home uptake, where users could add features in line with needs and budget. Retrofitting will therefore be a basis for the implementation of smart systems, such as lighting, security, heating, and cooling in old buildings, to make them more efficient and convenient. The trend is fueled by demands for more comfort, higher security, and better energy management without interfering with the original structure or disrupting operations unnecessarily.

By product, the smart kitchen segment is expected to grow with the highest CAGR in 2029.

The smart kitchen segment is expected to register a growth of 11.7% in the CAGR. This increase in segment is attributed to the increase in demand from consumers for convenience and efficiency that drives the adoption of smart appliances, making cooking and kitchen management easier. These ranges of gadgets—from smart refrigerators, which keep track of the inventory of food, to remotely controlled ovens that offer extended features and energy efficiency—will help to attract a number of tech-savvy consumers and households on the go.

Smart Home Market Regional Analysis

In 2029, Asia Pacific is projected to hold the highest CAGR of the overall smart home market.

Smart Home Market by Region

To know about the assumptions considered for the study, download the pdf brochure

The smart home market share in the Asia Pacific is expected to grow at the highest CAGR of 8.4% during the forecast period. This growth is attributed to the swift infrastructure development underway in the Asia Pacific, particularly in China, where smart lighting facilitates infrastructure modernization efforts. The ongoing modernization and establishment of infrastructure, including smart cities throughout the region, are anticipated to fuel the demand for smart streetlights, consequently propelling the smart home market share in the Asia Pacific. The growing inclination toward smart building infrastructure in developing economies of the region, such as Japan, South Korea, and China, a huge customer base, and rapid technological advancements in smart home products are driving the development of the market in the Asia Pacific. In developed countries, such as Japan and South Korea, there are favorable government initiatives which are supporting net-zero homes.

Top Smart Home Companies - Key Market Players:

• Johnson Controls Inc. (Ireland),
• Honeywell International Inc. (US),
• Schneider Electric (France),
• Siemens (Germany),
• ASSA ABLOY (Sweden),
• Amazon.com, Inc. (US),
• Apple Inc. (US),
• ADT (US),
• Robert Bosch (Germany),
• ABB (Switzerland), are some of the key players in the smart home companies.

 Smart Home Report Scope:

Smart Home Market Statistics Highlights

This research report categorizes the smart home market based by product, offering, sales channel, Trends and installation type, statistics and region.

Recent Developments In Smart Home Industry : 

• In August 2023, Yale Assure Smart Deadbolts offer a range of options depending on your needs. They typically include features like keyless entry, touchscreen interfaces, and compatibility with smart home systems like Amazon Alexa, Google Assistant, or Apple HomeKit. Yale offers various models with different features, such as the Yale Assure Lock SL and Yale Assure Lock Touchscreen Deadbolt.
• In July 2023, Schneider Electric signed a memorandum of understanding (MoU) with SAMRIDHI GROUP. to offer sustainable and technologically advanced smart home solutions. Through this agreement, SAMRIDHI GROUP will create energy-efficient and environmentally positive residential spaces powered by Schneider Electric’s products, including the Wiser Smart Home Solution, Unica Pure wiring devices, and low-voltage switchgear.
• In July 2023, Schneider Electric signed a memorandum of understanding (MoU) with SAMRIDHI GROUP to offer sustainable and technologically advanced smart home solutions. Through this agreement, SAMRIDHI GROUP will create energy-efficient and environmentally positive residential spaces powered by Schneider Electric’s products, including the Wiser Smart Home Solution, Unica Pure wiring devices, and low-voltage switchgear.
• In June 2023, ASSA ABLOY acquired Spectrum Brands’ Hardware and Home Improvement (HHI) division. This acquisition enhanced ASSA ABLOY’s current product offering and geographic scope.
• In March 2023, Johnson Controls launched IQ4 NS (No Screen) security and smart home system. It is designed to provide advanced security and smart home capabilities to residential and small commercial properties. The system includes features such as intrusion detection, video surveillance, access control, and integration with smart home devices like lighting, thermostats, and appliances.
• In March 2023, Johnson Controls launched the IQ4 NS (no screen) security and smart home system. It is designed to provide advanced security and smart home capabilities to residential and small commercial properties. The system includes features such as intrusion detection, video surveillance, access control, and integration with smart home devices like lighting, thermostats, and appliances.

Frequently Asked Questions (FAQs):

To speak to our analyst for a discussion on the above findings, click Speak to Analyst