IDC predicts a boom in smart home technology this year, with device shipments across the smart home segment up 31% year-on-year.
All categories of smart home technology tracked by IDC - smart speakers, video entertainment products, connected lighting, smart thermostats, and home monitoring/security products – are expected to see a rise in sales, with shipments going from 643.9m units this year, to reach 1.3bn in 2022, a 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."
Video entertainment devices such as smart TVs and digital media adapters like Google Chromecast and Apple TV will show 10.9% CAGR to see shipments of 457.5m units in 2022. This segment will become a gateway to smart home ecosystems, so IDC predicts immense competition both in content and in price in this segment.
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 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.