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01 Oct 2018

All Categories of Smart Home Devices Forecast to Deliver Double-Digit Growth Through 2022, Says IDC

FRAMINGHAM, Mass., October 1, 2018 – The worldwide smart home devices market is expected to grow 31% year over year in 2018 to 643.9 million shipments, according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker. The entire smart home market, comprised of smart speakers, video entertainment products, connected lighting, smart thermostats, and home monitoring/security products, is forecast to be nearly 1.3 billion devices by 2022 with a five-year compound annual growth rate (CAGR) of 20.8%. The fastest growing category with a five-year CAGR of 39.1%, accounting for almost 100 million units in 2018 and 230.5 million by 2022, will be smart speakers such as the Amazon Echo and Google Home.

"While dedicated smart speakers with built-in voice assistants will be prevalent throughout the forecast, we're already seeing a notable shift in this market," said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. "Many new types of devices, both inside and outside the home, now include built-in voice assistants. Not only do these help to increase the number of touch points available to end users, but it also helps each assistant to grow by expanding reach and gaining a deeper understanding of what, when, and how users approach various tasks."

Privacy and security for smart home devices remains one of the key inhibitors to adoption, as evidenced in IDC's recent Consumer IoT S urvey. However, IDC maintains a positive outlook for the market as the convenience of smart home devices frequently outweighs concerns.

"Security and privacy are top of mind for most consumers when considering deployments of smart home devices," said Adam Wright, senior research analyst for IDC's Consumer IoT Program. "In addition to having adequate security solutions in place when bringing devices to market, vendors must also respond to consumers' concerns by properly educating them about these safeguards and raising awareness about the benefits of sharing data that can ultimately provide better devices, services, and experiences over time."

Category Highlights

Video Entertainment products are comprised mostly of smart TVs and digital media adapters, such as Google's Chromecast, Apple TV, Fire TV, and Roku's devices. Acting as the center of the living room, this category is poised for growth and is forecast to reach 457.5 million units by 2022 with a five-year CAGR of 10.9%. For many brands and consumers, this category is expected to serve as the gateway into the smart home ecosystem and as such IDC anticipates immense competition both in content and in price when it comes to this category.

Home Monitoring/Security devices, ranging from door/window sensors to door locks and IP cameras, are expected account for 19.4% of the smart home market by the end of 2022. While the category faces great potential with a five-year growth of 27.3%, it also remains targeted at a somewhat limited subset of consumers, specifically homeowners, as most products still do not offer a lot of value for consumers living in apartments.

Smart Speakers, despite capturing the spotlight today, will only be the third largest category in 2022 as numerous vendors launch products with support for Amazon's Alexa or Google Assistant. Siri, Cortana, and Bixby are also expected to establish widespread availability, although none of these assistants will challenge the position of Google or Amazon in terms of unit shipments. While there will be a sizeable portion of the market that will not run on any of these platforms, IDC expects the market for these smart speakers to be largely relegated to China where incumbents like Xiaomi and Alibaba have already captured a large share.

Connected Lighting, Thermostats, and Other products will round out the smart home market, providing users with a complete ecosystem of products and services to control and monitor their homes. Combined, these categories are expected to grow with a five-year CAGR of 26.9% with lighting products (e.g. Philips Hue) accounting for almost one third of the shipments. Thermostats, while popular in North America, will face more muted growth in the rest of the world as many countries do not employ the use of central HVAC systems and therefore do not require a dedicated thermostat.

Smart Home Devices by Category, 2018 and 2022 (Shipments in millions)

Product Category

2018 Shipments*

2018 Market Share*

2022 Shipments*

2022 Market Share*

Home Monitoring/Security

97.7

15.2%

244.9

19.4%

Lighting

37.7

5.9%

104.6

8.3%

Others

84.5

13.1%

189.3

15.0%

Smart Speaker

99.8

15.5%

230.5

18.2%

Thermostat

13.6

2.1%

37.5

3.0%

Video Entertainment

310.5

48.2%

457.5

36.2%

Total

643.9

100.0%

1,264.5

100.0%

Source: IDC Worldwide Quarterly Smart Home Device Tracker, October 1, 2018

* Note: All data represents forecast values.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.

For more information about IDC's Worldwide Quarterly Mobile Phone Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn.



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Contact
For more information, contact:

Adam Wright
awright@idc.com
508-283-8087

Jitesh Ubrani
jubrani@idc.com
416-873-0315

Michael Shirer
press@idc.com
508-935-4200