Latin America. The latest research on market size and forecast of IP-connected devices used in the home, including smart speakers, digital media adapters, lighting, thermostats, and more, conducted by International Data Corporation, IDC, highlights the growth this sector will have in the coming years.
According to the report, 433.1 million smart home devices were shipped worldwide in 2017, with a growth of 27.6% over the previous year. Looking ahead, IDC forecasts a compound annual growth rate (CAGR) of 18.5% as the market soars to 939.7 million devices released in 2022.
Within the smart home market, the smart speaker category, which includes devices like the Amazon Echo and Google Home, will remain the fastest-growing category in the entire forecast. Meanwhile, shipments for most other categories, with the exception of video and entertainment products, will experience a double-digit CAGR during the same period.
"The smart home market is still in its infancy, but we're already seeing some significant shifts in the focus of consumers and vendors," said Jitesh Ubrani, research analyst at IDC Mobile Device Trackers.
Adam Wright, senior research analyst at IDC's Consumer IoT Program, commented, "While it's still early days for the smart home market and the consumer IoT ecosystem as a whole, we expect to see considerable growth in the coming years, especially as consumers become more aware of and increasingly interact with smart helper platforms like Amazon's Alexa and Google Assistant. Whether in the form of a smart speaker or integrated into a thermostat, refrigerator, TV or any other device, smart assistants are quickly becoming the cornerstone of consumer IoT by improving the accessibility, use and functionality of connected devices, which will notably drive adoption rates in the near future."
Category Highlights
Video Entertainment devices, including smart TVs, digital media adapters, and other IP-connected video devices, are forecast to offer a CAGR of 8.3% for unit shipments during the 2017-2022 forecast period. The leaders in the TV category during 2017 were Samsung and LG, while the category leaders for digital media adapters during the same period were, in order, Amazon, Google, and Roku.
Home Monitoring/Security is made up of devices like door locks, cameras, humidity sensors, doorbells, and more. IDC expects this to remain the second-largest category in terms of unit shipments through 2022 as products become easier to deploy at home and don't require consumers to have a "DIY" attitude to integrate these products with their smart assistants and other devices.
Smart Speakers with built-in smart assistants have captured attention recently as major new brands, such as Apple, have entered the market. In addition, Amazon and Google have responded quickly by offering additional models. What remains to be seen is how long partners can survive since the sale of hardware is the smallest part of the total revenue associated with this category.
Connected Lighting products, such as those from Philips, GE, IKEA and others, have to some extent been the gateway for consumers in the larger smart home market. With prices falling rapidly and combining with smart speakers as an entry-level smart home solution, the lighting category has great potential for the future. IDC anticipates that this category will be worth more than $3.5 billion by the end of 2022.
Other smart home products, such as connected appliances, sprinkler systems and other smaller devices, are expected to see shipments grow at a CAGR of 18.2% from 2017-2022. Many of the analog counterparts, such as traditional appliances, have long replacement cycles and are expected to have limited overall appeal within the future smart home.
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