Smart Homes Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The smart homes market was valued at USD 79.13 billion in 2021, and it is expected to reach USD 313.95 billion by 2027 and register a CAGR of 25.3% over the forecast period (2022 - 2027). Across real estate companies and the architect ecosystem, the ‘new normal’ defined through the social distancing practice resulted in a requirement to go back to the redesign basics and reinvent the residential real estate products by factoring in new-age designing, efficiency, and innovation. As the redesigning happens, the need for a totally new set of amenities has resurfaced and gained prominence. What the customer will need in the ‘new normal’ has undergone a revolution in the crisis triggered by the COVID-19 pandemic, and it is leading to a paradigm shift in residential spaces.

• Home automation and smart homes are two ambiguous terms used in reference to a wide range of monitoring solutions, controlling, and automating functions in a home. Unlike simple home automation solutions (which could range from motor-operated garage doors to automated security systems), smart home systems require a web portal or a smartphone application as a user interface to interact with an automated system.​
• Globally, the increasing importance of the need to counter security issues is anticipated to fuel the demand for smart and connected homes over the forecast period. Moreover, innovative wireless technologies, including security and access regulators, entertainment controls, and HVAC controllers, are expected to foster market growth.
• The companies are continuously investing in new product designs. For example, Google’s Nest smart-home division recently introduced a new smart thermostat. The new Nest Thermostat is a simpler model than the Nest Learning Thermostat or Nest Thermostat E and is offered at a lower price of USD 129.99, accounting for a difference of USD 40 less than the Nest E and USD 120 less than the top-of-the-line third-generation Nest Learning Thermostat. It was made available to pre-order immediately.​
• T-Mobile also announced that it will be launching a 5G-based home network by 2024. The aim is to extend coverage to previously underserved rural areas across the United States. It is currently offering a trial version of the service on its 4G LTE network to a select a number of T-Mobile customers.

Scope of the Report

Smart home devices are suitable for a home setup where devices can be automatically controlled distantly from any Internet-connected place in the world, using a mobile or other networked devices. A smart home has its devices connected through the Internet, and the customer can regulate functions, such as security access to the house, temperature, lighting, and home theater. The smart homes market is segmented by product type (comfort and lighting, control and connectivity, energy management, home entertainment, security, and smart appliances) and geography.

Report scope can be customized per your requirements. Click here.

Key Market Trends

HVAC Systems are Among the Most Significant Contributors to the Market

According to a report from the US National Academy of Sciences (NAS), the first decade of the 21st century was 0.8°C (1.4°F) warmer than the first decade of the 20th century. The variation in climatic changes has led to the increasing demand for electrical cooling systems in summers and, simultaneously, for natural gas, heating oil, wood, and electrical heating systems in winters.

With the advent of new government regulations regarding efficiency, the usage of HVAC systems is expected to rise. This has opened a gateway to the smart HVAC control systems for the most advanced heating and air conditioning units in buildings. Thus, the already existing HVAC equipment would have to be either replaced or retrofitted to adjust the energy efficiency as per the government standards. This would drive the need for HVAC retrofitting, thereby augmenting the overall market's growth positively.

Proper airflow will also help in humidity control. If the buildings maintain a relative humidity of 40%-60% inside, this will decrease the virus's ability to infect occupants. If the HVAC system incorporates makeup air, it also will increase ventilation, thus creating an even more healthy environment. In multiple commercial HVAC systems, filters are measured in MERV (minimum efficiency reporting values).

Moreover, reducing IoT sensor costs is also expected to result in OEMs offering products for a more competitive and lower price, which could indirectly impact the HVAC equipment market. Green HVAC systems are being developed to bring down costs and improve energy efficiency.

Starting from 2023, all new residential central air-source heat pump systems sold in the United States are expected to meet new minimum energy efficiency regulations and standards. The latest minimum energy efficiency standards for these equipment types went into effect in 2015. The new regulations require an increase in the heating efficiency of all air-source heat pumps.

To understand key trends, Download Sample Report