The latest projections show that the deployment of Internet of Things (IoT) devices didn’t slow down in 2020 as smart home adoption spreads, and is expected to maintain healthy year-on-year growth, according to a Berg Insight report. Smart homes are already here, but not always as one unified solution.
Sometimes, smart homes are made of different devices, and many don’t interact with one another. People love to buy devices that fill important niches in the household, a trend clearly evidenced by Berg Insight’s analysis.
It’s no surprise the primary market for smart homes and their accompanying IoT devices is North America, which registered 51.2 million smart homes at the end of 2020. The market reported an 18.7 percent year-on-year increase to 172.6 million units. But distribution is not uniform.
“An estimated 19.1 million of these were multifunction or whole-home systems whereas 153.5 million were point solutions designed for one specific function,” the researchers say. “As some homes have more than one smart system in use, the installed base totaled an estimated 43.1 million smart homes at the end of the year. This corresponds to 30.2 percent of all households, placing North America as the most advanced smart home market in the world.”
The compound annual growth rate (CAGR) for North America is expected to reach 14.1 percent by 2024 from its current 12.5 percent, resulting in US$ 52.3 billion (€ 46.7 billion) in yearly revenue.
On the other side of the Atlantic, the European market is a few years behind North America in terms of market penetration. Still, a total of 111.9 million smart home systems were in use in the European Union by the end of 2020, an increase from 83.9 million the previous year.
“The number of European households to adopt smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 20.2 percent during the next five years, resulting in 101.1 million smart homes by 2024,” the report states.
“The market value is forecasted to grow at a CAGR of 24.3 percent between 2019 and 2024 to reach € 49.0 billion (US$ 54.9 billion) at the end of the forecast period,” the Berg analysis also concludes.
Both markets seem to have traversed 2020 and its COVID-19 restrictions with little negative impact. Likely, being stuck indoors drove people to look for devices that save them time or increase their sense of security, pushing the market forward despite other economic downturns.