What's in Your Smart Home? - The Smart Home Market

According to the definition provided by Statistica, the Smart Home market includes the sale of devices and services that allow private users (B2C) to automate their homes using networked devices connected to the internet through a gateway. The main purpose of these devices is to control, monitor, and regulate functions within a household.

To qualify as a Smart Home device, it must be capable of remote control and monitoring and be able to communicate directly or indirectly with other devices in the household (known as the Internet of Things). Services required for the maintenance or control of the household network, such as subscription fees for control apps or external monitoring services, are also included.

However, devices such as smartphones and tablets whose primary function is not home automation or remote control are not included in the Smart Home market. Similarly, devices that have only a limited connection to household automation, such as smart TVs, are not included either.

In 2018, Sonny Ali and Zia Yusuf wrote ‘Mapping the Smart- Home Market’ breaking it down to 11 sectors- Smart Energy, HVAC and Lighting, Software Platforms, Security and Safety Systems, Audio Visual, AI and Natural Language Processing, Connected Health, Wearable and Mobile Apps, Robotics, Components, and Smart Kitchen.

My definition of a ‘Smart Home’ goes way beyond these. However, from these perspectives, we can gather an idea of the overall size of the Canadian market using their definition and modeling. According to Statistica's projections, the Smart Home market in Canada is estimated at US$3.05 billion (2022), with an annual growth rate of 15.2%.

In terms of active households, the market is expected to have 10.37 million users by 2027, with a household penetration of 60.3% by 2027. The average revenue per installed Smart Home device is projected to be US$517.10.

In the United States, the Smart Home market saw a revenue of 31.45bn (2022). The number of active households in the Smart Home market is expected to reach 93.59 million users by 2027, with household penetration increasing from 43.8% in 2022 to 68.6% by 2027.

The average revenue per installed Smart Home device is expected to be US$546.50. Comparing the Smart Home market globally, the United States generates the most revenue.

Statistica's estimate for the worldwide Smart Home market show that revenue is approximately US$117.60 billion (2022), with an annual growth rate (CAGR 2022-2027) of 12.47%. This growth is expected to result in a projected market volume of US$222.90 billion by 2027.

The number of active households in the Smart Home market is expected to amount to 672.60 million users by 2027, with household penetration increasing from 14.2% in 2022 to 28.8% by 2027. The current average revenue per installed Smart Home device is projected to be US$381.90.

According to Fortune Business Insights, the global Smart Home Market size is projected to reach USD 380.52 Billion in 2028, at a CAGR of 21.1%.

While these various models conjecture a future dollar amount, there is no way to measure the ‘value’ of the changes that are coming our way, the integration and features that lie on the horizon when a ‘Smart Home’ incorporates technologies that we haven’t even thought of yet.

Regardless of what you include as a measure of the smart home industry and how fast the adaptation occurs, it’s likely to include an ever increasing integration into current hardware and software in an attempt to automate and monitor tasks effortlessly into our daily routines.

How this looks in the not so distant future may seem just evolutionary or even unimpressive today. The future of our ‘Smart Homes’ will come not only from existing industry players but from new company start-ups. Consider the exponential effect of what is on the horizon- Artificial Intelligence.

‘AI’ is changing how everything progresses from here, and new start-up businesses have great opportunities to exceed in all industries. Perhaps Peter Diamandis, co-author of ‘Exponential Organizations 2.0’ w/Salim Ismail, explains it best- “The technologies that were only available to large corporations that required tens of millions of dollars to get going are now completely demonetized and democratized… It’s all about generative AI…”

Thanks for reading!

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Looking for more info?

Here’s a few sources for detailed information of the Smart Home Market.

Fortune Business Insights

https://www.fortunebusinessinsights.com/industry-reports/smart-home-market-101900

Statistica

https://www.statista.com/forecasts/887554/revenue-in-the-smart-home-market-in-the-world