Smart Homes and Home Automation - 3rd Edition

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Jan 20, 2015, 01:10 ET

NEW YORK, Jan. 20, 2015 /PRNewswire/ -- Executive summary

Smart homes and home automation are ambiguous terms used in reference to a wide range of solutions for controlling, monitoring and automating functions in the home. Berg Insight's definition of a smart home system requires that it has a smartphone app or a web portal as a user interface. Devices that only can be controlled with switches, timers, sensors and remote controls are thus not included in the scope of this study. Smart home systems can be grouped into six primary categories: energy management and climate control systems; security and access control systems; lighting, window and appliance control systems; home appliances; audio-visual and entertainment systems; and healthcare and assisted living systems.

North America recorded strong growth in the smart home market during 2014. The installed base of smart home systems in the region increased by 75 percent to reach 10.2 million at the year-end. An estimated 1.8 million of these were multifunction or whole-home systems whereas 8.3 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 7.9 million smart homes at the end of the year. This corresponds to 6.0 percent of all households, placing North America as the most advanced smart home market in the world. Between 2014 and 2019, the number of households that have adopted smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 37 percent, resulting in 38.2 million smart homes. Market revenues reached US$ 4.2 billion (€ 3.2 billion) in 2014, an increase of 48 percent year-on-year. The market is expected to grow at a CAGR of 34 percent between 2014 and 2019, reaching US$ 18.2 billion (€ 13.7 billion) in yearly revenues at the end of the forecast period.

The European market for smart home systems is still in an early stage and 2–3 years behind North America in terms of penetration and market maturity. At the end of 2014, there were a total of 3.3 million smart home systems in use in the EU28+2 countries, up from 1.75 million in the previous year. Around 0.34 million of these systems were multifunction or whole-home systems whereas 2.93 million were point solutions. This corresponds to around 2.7 million smart homes when overlaps are taken into account, meaning that 1.2 percent of all households in the region were smart at the end of the year. The number of European households that have adopted smart home systems is forecasted to grow at a compound annual growth rate (CAGR) of 61 percent during the next five years, resulting in 29.7 million smart homes by 2019. Market revenues grew by 60 percent to € 0.77 billion (US$ 1.0 billion) in 2014. The market is forecasted to grow at a CAGR of 58 percent between 2014 and 2019 to reach € 7.6 billion (US$ 10.2 billion) at the end of the forecast period. A point solution will in most cases constitute the consumer's first smart home purchase. In fact, point solutions outsold whole-home systems in 2014 by a factor of six to one and generated 59 percent of the combined market revenues in North America and Europe. The most successful point solutions to date include smart thermostats, security systems, smart light bulbs, network cameras and multi-room audio systems. These products are marketed by incumbent OEMs such as Honeywell, Danfoss and Philips; service providers such as SFR, British Gas, Eneco and Protection1; and new entrants such as Nest, Ecobee, LIFX, MyFox and D-Link. In the whole-home system market, traditional home automation system vendors such as Crestron, Control4, Gira and Jung are facing new competition as companies from adjacent industries are entering the market. New entrants such as ADT, Vivint, Comcast and AT&T in North America as well as eQ-3, RWE, Verisure and Loxone in Europe have already established themselves among the largest whole-home solution vendors in their respective regions.
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