The smart home device market is more than a quarter larger this year than last, according to a smart home device forecast from IDC. In 2018, 549.5 million devices will ship, a 26.8% increase over last year. The leading categories are smart speakers and video entertainment products, which will represent 71% of the market in 2018. Those categories will have a compound annual growth rate (CAGR) of 12% from this year through 2022.
It’s a highly competitive sector. “With TVs being the centerpiece of many homes, device and platform makers are competing for users’ attention with the inclusion of smart assistants and other over-the-top services,” Jitesh Ubrani, a senior research analyst for IDC Mobile Device Trackers, said in a press release. “While Amazon’s Alexa leads in this space today, the Google Assistant is expected to gain dominance in the future as an increasing number of international brands include support and consumers’ familiarity with the Assistant on smartphones leads to growing demand for the Assistant on TVs.”
Smart Home Device Forecast
Another category that is expected to grow significantly is home monitoring/security. Its potential is illustrated by Amazon’s acquisition of Ring, which is expected to drive prices down. Google, however, is maintaining Nest as a premium, subscription-based service. IDC expects that to hinder growth.
Smart home devices in all categories will grow during the period from 2018 to 2022: Home monitoring/security (from 7.5 billion to $16.5 billion, a 21.7% CAGR), lighting ($1.8 billion to $4.6 billion, 27% CAGR), smart speakers ($11.8 billion to $27.8 billion, 23.7% CAGR), thermostats ($2.9 billion to $8.3 billion, 30.1% CAGR) and video entertainment ($206.8 billion to $297.5 billion, 9.5% CAGR). The “other” category will move from $25.4 billion to $48.2 billion, (a 17.4% CAGR).
The growth of smart home devices is having an interesting impact on the dynamics of keeping things running, according to Parks Associates. The firm said in April that 34% of smart home device owners experienced problems last year, an increase of 6% compared to 2016.