This latest study just released by Berg, offers business intelligence, including 5-year industry forecasts, expert commentary and real-life case studies on which to base business decisions.

Smart home and home automation systems include a wide range of solutions for controlling, monitoring and automating functions in the home. Berg Insight’s definition of a smart home system is one that is accessible from remote and includes a smartphone app or a web portal user interface. Devices that only can be controlled and automated locally, through switches, timers, sensors and remote controls, are thus not included in the scope of this study. Smart home systems can be grouped into seven primary categories: security and access control systems; energy management and climate control systems; audio-visual and entertainment systems; lighting and window control systems; healthcare and independent living systems; home appliances and service robotics.

Most advanced market is US

The North American smart home market recorded strong growth during 2021. The installed base of smart home systems increased by 18.0 percent to reach 223.2 million at the year-end. An estimated 30.0 million of these were multifunction or whole-home systems whereas 193.2 million were point solutions designed for one specific function. As some homes have more than one smart system in use, the installed base totalled an estimated 51.3 million smart homes at the end of the year. This corresponds to 35.8 percent of all households, placing North America as the most advanced smart home market in the world. Between 2021 and 2026, the number of households that adopt smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 7.8 percent, resulting in 74.6 million smart homes. Market revenues reached US$ 36.7 billion (€ 31.0 billion) in 2021, an increase of 16.4 percent year-on-year. The market is expected to grow at a CAGR of 11.7 percent between 2021 and 2026, reaching US$ 63.7 billion (€ 53.9 billion) in yearly revenues at the end of the forecast period.

Europe lags behind in maturity

The European market for smart home systems is still behind the North American market in terms of market penetration and maturity. However, the market has now grown to become almost as large as the North American market. At the end of 2021, there was a total of 167.7 million smart home systems in use in the EU27+3 countries, up 22.9 percent year-on-year. Around 20.0 million of these systems were multifunction or whole-home systems whereas 147.7 million were point solutions. This corresponds to around 53.7 million smart homes when overlaps are taken into account, meaning that 23.0 percent of all households in Europe were smart at the end of the year. The number of European households to adopt smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 13.7 percent during the next five years, resulting in 99.7 million smart homes by 2026. Market revenues grew by 30.9 percent to € 29.7 billion (US$ 35.1 billion) in 2021. The market is forecasted to grow at a CAGR of 15.5 percent between 2021 and 2026 to reach € 61.1 billion (US$ 72.2 billion) at the end of the forecast period.

Wide mix of players

A point solution will in many cases constitute the consumer’s first smart home purchase. The most popular point solutions to date, in terms of sold units, include smart thermostats, smart light bulbs, smart plugs, connected security cameras and voice controlled smart speakers. These products are marketed by incumbent OEMs such as Signify, Resideo, Danfoss, Belkin, Chamberlain, Schlage and Assa Abloy and newer entrants such as Ecobee, Sonos, Arlo, Nuki, Mysa, Ikea and Wyze Labs.

In the whole-home system market, traditional home automation vendors such as Crestron Electronics, Control4, Savant Systems, eQ-3 and Loxone are facing new competition as companies from adjacent industries have entered the market. Communications and security service providers such as ADT, Vivint, Comcast and Brinks Home Security (Monitronics) have established themselves among the largest whole-home solution vendors in North America. Major vendors in Europe include Centrica, Somfy, Deutsche Telekom and Verisure.