A moderate level of competition prevailing in the global smart homes market can be attributed largely to a low rate of concentration in the industry, notes Transparency Market Research (TMR). The market is expected to witness the same degree of competition in the long run, as well. Howbeit, the marked presence of competitive market forces notwithstanding, several manufacturers are focusing on adopting novel strategies, in a move to consolidate their shares in the coming years. The inclination toward adopting such strategies will also pave way for several value-added services in the years to come, observes TMR.
Leading players include Johnson Controls, Inc., ABB Ltd, Schneider Electric SE, Siemens AG, and Honeywell International, Inc. They focus on offering tailor-made smart home automation solutions to meet a variety of specific requirements of individual end users in various regions. Numerous prominent players are also harping on differentiated offerings to stay ahead of their competitors.
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The global smart home market is projected to expand at a robust CAGR of 14.6% from 2017 to 2025. Rising at this pace, the opportunities in the market will touch a valuation of US$97.61 billion by the end of the forecast period. The market stood at US$30.02 billion in 2016.
The various applications of smart homes systems are in heating, ventilation, and air conditioning (HVAC) control, lighting control, security and access control, and entertainment control. Of these, the HVAC control segment held the major share in 2016 and is projected to rise at an attractive growth rate through the forecast period. The growth is fueled by the vastly rising demand for energy efficient devices among homeowners.
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Regionally, North America accounted for the leading share in the market in 2016 and is anticipated to hold its sway throughout the assessment period. Meanwhile, Europe will present large number of lucrative prospects for market players to capitalize on in the years to come. The substantial need for regulating the energy usage, especially in a burgeoning industrial sector, will aid in the expansion of this regional market.
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Soaring Demand to ride on Rising Popularity of IoT
The staggering rise in number of internet users worldwide, coupled with the marked rise in disposal incomes in several emerging economies, is a key factor driving the demand for smart homes. The wide popularity of internet of things (IoT) systems in various regions is stoking the demand for smart homes. The proliferation of IoT devices has led to a marked decline in the prices of compute resources such as processors and sensors, which has provided a robust impetus to the growth of the market in recent years. The global smart homes market has also benefitted several notable technological advances in IoT network in various developing and developed nations.
Constant improvements in internet speed for residential users also bode well for the market. The growing popularity of wireless connectivity of smart home automation system is also accentuating the growth of the market.