After dealing with the realities of the coronavirus pandemic all throughout 2020, many integrators were unsure of how soon the market would return to its previous levels. Thankfully, new data from consumer research firm Strategy Analytics shows an encouraging trend, with global consumer spending on smart home solutions expected to break the $100 billion by the end of 2021.
Strategy Analytics’ recently published report titled “2021 Global Smart Home Forecast” suggests total consumer spending may reach $123 billion after a sharp decline in 2020 due to the coronavirus.
“The smart home market is recovering from the economic and social distancing impacts caused by the pandemic and after spending more time at home consumers are seeking ways to improve their home and are finding that smart home solutions offer enhancements they value,” says Bill Ablondi, director of Strategy Analytics’ smart home strategies advisory service.
20% of Households Will Own Smart Home Products by 2025
While many consumers delayed previously planned installations last year, this year many consumers are fulfilling their planned purchases. According to the data, approximately 30 million households will acquire smart systems in 2021.
The market is showing no signs of slowing down, as data forecasts a continued growth pattern up to $173 billion in 2025. At this time, nearly 20% of all households have at least one smart home product in use, up from 15% by the end of 2021.
Security is the top category driving growth in the US and in Western Europe, with specific devices like surveillance cameras, smart bulbs and electrical devices also driving smart home adoption.
“Prices for smart home products have continued to drop dramatically making it easier for consumers to try various devices without breaking their bank accounts. This is driving adoption and increasing spending as people buy two or three surveillance cameras instead of one or add half a dozen smart bulbs in their home,” says Jack Narcotta, senior industry analyst in Strategy Analytics’ smart home strategies advisory service.
In terms of marketshare, North America is the largest market in 2021, accounting for 40% of all consumer spending. The Asia-Pacific region is the second-largest, accounting for 29% of spending, while Western Europe rounds out the top three regions with 18% of overall spending.
According to Strategy Analytics’ data, there are more smart homes in the Asia-Pacific region, but spending per home is half of what it is in the North American region. However, as adoption rises among the one billion homes in the region, data suggests the Asia-Pacific region will become the largest smart home market by the late 2020s.
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