Security, Utilities Devices Will Fuel Smart Home Unit Sales to 1.4 Billion by 2021, Report Says
The growth is being driven particularly by sales of security devices, such as security cameras, door locks and sensors, and by utilities devices such as connected light bulbs and smart thermostats.
NEW YORK CITY – Smart home households are forecast to increase more than fivefold from 90 million in 2016 to 463 million in 2021, according to new report by Ovum. That marks a compound annual growth rate (CAGR) of 39% during the forecast period.
Ovum’s “Smart Home Devices Forecast: 2016-2021” found that the United States and China are the largest markets for smart home products and systems, given the high availability of devices and greater consumer interest. Device sales will grow to more than 1.4 billion units globally by 2021, up from 224 million in 2016. The growth is being driven particularly by sales of security devices, such as security cameras, door locks and sensors, and by utilities devices such as connected light bulbs and smart thermostats (see chart above).
Ovum predicts that each smart home household will use on average 8.7 devices, bringing the total smart home active installed base to 4 billion devices.
“Another device category that will become increasingly important is interactive audio speakers, like Amazon Echo and Google Home,” says Ovum Senior Analyst Francesco Radicati, who authored the forecast. “By using voice control as a user interface, they allow consumers to control their smart home devices in a more natural way, without resorting to apps on their smartphones or tablets, while the AI [artificial intelligence] capabilities of assistants like Amazon Alexa or Google Assistant help to deliver increasingly better services.”
Audio Speakers Gaining Popularity
As the newest device category, interactive audio speakers are set to post the fastest growth, with unit sales growing to more than 88 million in 2021, from 5.5 million in 2016 (a CAGR of 74%). Devices such as Echo or Google Home will also spur sales of other smart home devices, as consumers learn to link devices together to satisfy their families’ own particular needs.
However, because these speakers are not widely available outside the U.S., there are opportunities for local companies, for example in China or Japan, to launch their own alternatives. The first is Baidu’s Little Fish device, which includes facial recognition and a camera screen along with voice control.
READ NEXT: NSCA Releases Winter 2016 Electronic Systems Outlook
Yet a distinct gap exists between the number of smart home households and the take-up of dedicated smart home services. For example, on a worldwide basis 15.5% of households will have adopted smart home security technology by 2021, but only 6.2% will be paying for a professional smart home security service.
“This gap between the take-up of smart devices and services suggests that there is an opportunity to develop new business models around smart home technology,” says Michael Philpott, practice leader for Ovum’s Smart Home Services team. “However, players will need to be innovative and open to working with third-party devices and partners if they are to be successful.”
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Commercial Integrator + Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add to your bottom line.
A FREE subscription to the top resource for security and integration industry will prove to be invaluable.