Smart home devices resonate with consumers, global shipments to double by 2027

Consumer adoption of smart home devices continues apace, with a new Futuresource Consulting report indicating that shipments could have exceeded 257 million units worldwide in 2023. That’s a year-on-year increase of 23%, and the specialist research firm expects sector activity to intensify over the next few years.

“We’re seeing a market in rapid ascendance,” says Sophie Harding, Research Analyst, Futuresource Consulting. “While many home technology markets are struggling to grow, the smart home segment is powering through an adoption curve. And with a diverse range of products at various stages of development and consumer acceptance, there’s a hotbed of opportunity for the industry.”

Volume and value on the up, driven by North America and Western Europe

Futuresource expects overall smart home market volume to double by 2027, reaching 523 million units worldwide and achieving a retail value of $61.7 billion. Developed economies will drive the majority of the uptake, with North America and Western Europe on track to attract the highest household ownership rates during the forecast period.

Security a key motivator, eco issues playing their part

Smart home security products lead the way, gaining traction by offering easily deployed, lower-cost alternatives to traditional home surveillance equipment. As consumers seek to safeguard and protect their homes, smart cameras are at the top of the shopping list, with video doorbells taking third position behind smart lighting solutions.

Futuresource also notes that environmental concerns and the desire to manage energy usage have driven interest in the smart lighting and smart thermostat market. Over the last two years, elevated energy prices have acted as a key catalyst for growth, with smart lighting benefiting through a combination of new adopters and an increasing number of smart lights per household.

Tech advancements capture consumer wallets

“As smart home device manufacturers continue to deliver innovative solutions and new features, consumers are taking notice,” says Harding. “From improving the automation of robot vacuum cleaners to integrating image recognition in cameras, or enabling greater cross-device connectivity, all this advancement is encouraging people to adopt smart home technology and expand their networks. Smart home enthusiasts, existing users and new adopters alike are recognising the benefits that these improvements, features and potential new products have to offer. As a result, they are channelling more of their disposable income into smart home technologies.

“We also expect digital health technology and home care to come together in the smart home, with an emergence of products that will accommodate a range of healthcare applications. This will add to consumer appeal and bring additional new audiences into play.”

Interoperability, connectivity and competition are key battlegrounds

Moving forward, Futuresource expects automation and inter-device connectivity to be key focus areas for the industry. However, competition between control platforms and connectivity ecosystems will remain intense, with major brands viewing the smart home ecosystem as a strategic priority.

At the same time, smart home connectivity protocol initiatives, such as Matter, are expected to gain traction. Many manufacturers recognise the importance of simplifying inter-device connectivity, making devices easier to use and more appealing to non-technical adopters.

Futuresource Consulting’s Global Smart Home Outlook report provides analysis and forecasts of the smart home market, including smart cameras, video doorbells, smart locks, smart lights, smart thermostats and robot vacuum cleaners. For more information on this report or to make a purchase, please contact Leon at leon.morris@futuresource-hq.com.

About the author

Sophie Harding

Before joining Futuresource, Sophie graduated from Bath Spa University where she achieved a first-class degree in Business and Management (Accounting). Sophie found research projects the most interesting part of her studies – she particularly enjoyed a project pertaining to the effects of developments in AI and its impact on transforming business practices.