Digital technologies for the home are rapidly evolving with the introduction of new standards and advanced systems such as digital assistants, and consumers are showing increasing interest in the possibilities they can offer. The result is that since the pandemic, when so many people have been confined for long periods of time, interest in smart home devices has increased. Sales have been contained in this period as a result of economic and health uncertainty, which has limited growth in 2022, but Omdia experts expect that the spending trend prior to the pandemic will recover from this year .
The researchers explain that since 2021 the growth of the Smart Home device market has moderated, but in 2023 they expect a new boom stage to begin . The current situation is marked by economic and labor uncertainty, but it is expected that retail sales of this type of device may exceed 2,000 million units in 2022 . Expect especially strong growth in energy management solutions and devices certified to the Matter standard in the coming year, marking the biggest technological revolution the product category has seen since its inception.
The category that has dominated sales since 2021 is that of smart speakers , which give access to digital assistants such as Google, Apple or Amazon, and which last year reached shipments of 195 million units. It was followed by smart lighting, smart plugs and switches, and connected health devices. Looking ahead to the next five years, Omdia researchers believe the categories that will grow the most in sales will be water leak sensors/shutoff valves, connected appliances , smart plugs and switches, air quality monitors, and smart locks. which will see growth of more than 30% (CAGR) between 2021 and 2026.
After analyzing consumer behavior over the past year, Omdia highlights that 55% of US homes with broadband access had Smart Home devices. In EMEA the percentage was 21%, in Asia and Oceania 14% and in the Americas, in general, 44%. The leading vendor in the market last year was Xiaomi, followed by Alibaba, Amazon, Google and Baidu, five brands that specialize in smart home speakers. Next up were Ikea, Sengled, Ledvancec and Signify, whose focus is more on lighting systems.
Matter will expand more slowly than anticipated
Although some well-known manufacturers have been making efforts to publicize the possibilities that the Matter standard will offer , and have promoted its adoption in the industry, Omdia researchers believe that the penetration of this new standard will develop more gradually than anticipated. initially. They currently expect that by 2023 there will be around 424 million devices compatible with Matter 1.0. But this assumption is based on 100% of them being certified to this standard, which might not be the case, but would be equivalent to 44% of total digital home device shipments in the coming year.
Although, considering that important categories, such as major appliances, security cameras and robotic vacuum cleaners, among others, are not covered in the launch of the first version of Matter, the penetration of this standard will be slower than previously expected. Despite this, the researchers are convinced that the future of the smart home lies in this standard and in the progressive incorporation of new categories, which will allow consumers to build a truly integrated digital home ecosystem .
“This is an exciting time for the smart home industry as brands innovate rapidly and produce devices that combine advanced features, such as facial recognition and video analytics , with door locks ,” said Blake Kozak, Senior Principal Analyst at Omdia. ”. He also highlights the inclusion of radar technologies in smart devices such as speakers or thermostats. And he says that “ brands are also making moves in terms of partnerships and acquisitions, such as ADT’s acquisition of Sunpro Solar and IOTAS. Advances in connectivity standards such as ultra-broadband, Thread and NB-IoTthey will also bring new use cases to the smart home market, improving both accuracy and distance .”
Challenges for the development of the digital home
Although the outlook for the future is generally positive, Omdia researchers anticipate that the industry focused on digital home devices will face several challenges. The most important is the increase in costs and the price of certain services, which will make it difficult for many manufacturers to compete with brands more focused on models in the lower range and price.
On the other hand, they point out that at the moment there has been no measurable impact from the commodification of the Matter standard, and certain brands could abandon their own initiatives , leaving users without support for the devices they have purchased. This will generate discontent and mistrust when purchasing new devices, despite the fact that they bear the stamp of the standard promoted by the main players in the industry.
Despite this, it is expected that in the coming years the ecosystem of Smart Home devices and standards will be consolidated, offering users a multitude of possibilities when purchasing devices from different brands that can work together. This will open up new avenues of business not only for the manufacturers of these devices, but also for digital service providers that know how to take advantage of the characteristics of these gadgets to offer products and services to consumers.