For a while, it seemed as though the smart home space was beating all economic odds. However, now, it seems like the worsening macroeconomic conditions have forced a shift in that. According to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker, worldwide shipments of smart home devices are now expected to decline 2.6% in 2022.
“Shipments of smart home devices have been impacted significantly by ongoing supply chain disruptions,” said Adam Wright, senior research manager, Smart Home and Office Devices. “Moreover, we’re witnessing downward pressure on demand in 2022 as inflation continues to squeeze consumers’ wallets. Looking ahead, we expect volatility will continue to inhibit the market’s growth in 2023 and beyond.”
Leading the losses here will be smart speakers and video entertainment devices, IDC forecasts. These devices include TVs and those that facilitate streaming services, which, combined, are expected to only experience a CAGR of 2.4% from 2022 into 2026. Smart speakers, similarly, are being given a meager 3.4% growth rate in the next five years compared to lighting’s substantial 22.6% CAGR.
A Silver Lining Amidst a Stormy Year
Despite the news, there does seem to be something shining on the horizon. The market is still forecasted to grow in 2023, however, it is being projected at a modest 4.6% with most of the growth coming from emerging markets. Smart speakers are also expected to continue holding low interest among consumers leading into the new year.
“Though smart speakers arguably helped launch the smart home category, the shine of these products has largely worn off for consumers in developed markets such as the United States and China with shipments expected to decline in the long run,” said Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers. “Smart speakers will now rely on emerging markets and places like Europe where language and lack of services have been a barrier to adoption in the past.”
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Home monitoring/security products (i.e. cameras, doorbells, door locks), smart lighting, and video entertainment will account for the largest shares for the next five years between 22.4%, 22.6% and 27.4%, respectively. It is worth noting, though, that video entertainment’s current share is 33.9% of the market, signifying a drop in market share by roughly 6% in the next five years.
A full table detailing the current and projected values and shares can be found below.
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