According to a new report from IHS Markit, the market for smart home devices continues to grow as 47 million connected devices shipped globally in 2015. However, that figure seems small when compared to the expansion the market is expected to experience over the next several years. In fact, the research firm predicts that the market will increase at a compound annual growth rate of 60 percent, reaching 477 million devices in 2020.
In a statement, Blake Kozak, principal analyst for IHS Markit, said that the American region accounted for 62 percent of global shipments in 2015. However, he said the Asia-Pacific market is expected to gain significant share over the next four years, coming into parity with the American market in 2020. The EMEA region will remain flat, holding steady at 20 percent of the global market for smart devices. This rapid growth will be primarily driven by appliances and air conditioners, according to the research firm.
“The smart home is organized into the following five primary categories: safety and security, climate control, consumer electronics, energy and water control, and lighting and controls,” said Kozak. “The challenge is delivering all five categories on a single platform where the devices will communicate in an effective mesh network, rather than act as isolated and autonomous processes. Bringing all five categories together effectively has been seen as mostly confined to professionally installed systems, but ‘do-it-yourself’ offerings are improving quickly.”
While automation devices - except safety and security devices - accounted for 60 percent of the global market in 2015, they will grow to comprise 80 percent of the market in 2020, according to Kozak. In addition, do-it-yourself (DIY) devices represented about 20 percent of units shipped globally in 2015, however, by 2020, DIY and hybrid system types will account for nearly 60 percent of the market, leaving a significant challenge for purely professional installation business models.
Kozak said the automation devices that will contribute most to market growth are plugs and switches, appliances, air conditioners and lighting. Global annual shipments for these four types of devices are projected to increase from 15 million in 2015 to 300 million in 2020. In terms of total smart home penetration, IHS Markit estimates that while just six percent of North American homes had a smart home system in 2012, 28 percent will have one installed in 2020.
“The possibilities of the smart home are seemingly endless; however, a tightly controlled ecosystem is a necessity for devices to work well together,” Kozak said. “Just because a product is listed as ZigBee, does not mean it will work with every hub that accepts ZigBee. Although the device may function, features may be limited and functionality is not guaranteed.”
For more information, visit www.ihsmarkit.com.
