| Study Period | 2019 - 2032 |
| 2024 Market Size | USD 85.7 Billion |
| 2025 Market Size | USD 91.7 Billion |
| 2032 Forecast | USD 157.8 Billion |
| Growth Rate (CAGR) | 8.1% |
| Largest Region | North America |
| Fastest Growing Region | APAC |
| Nature of the Market | Fragmented |
| Largest Application Category | Retrofitting |
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The smart homes market size stands at USD 85.7 billion in 2024, and it is expected to advance at a compound annual growth rate of 8.1% during 2025–2032, to reach USD 157.8 billion by 2032.
This is credited to the increasing disposable income in developing economies, rising importance of remote home monitoring, surging number of internet users, and growing adoption of smart devices. Essentially, the growth in safety concerns, rise in the demand for convenience among the general population, expansion of smart home product portfolios by the players, and escalation in the need for energy-saving solutions are propelling the market.
The growth in the usage of enhanced technologies, such as IoT, machine learning, artificial intelligence, and automated solutions, such as wireless lighting, is continuously impacting the revenue of the market. The need for on-demand and value-based home automation solutions is rapidly growing due to the increasing customer income, which is enabling them to adopt cloud-based smart home solutions for the enhancement of their comfort.
Moreover, the ability of smart lights to connect with IoT devices and create a variety of ambiances with the use of just mobile phones or tablets has made them popular across residences.
Moreover, lighting consumes around 15% of the total electricity in an average house, and about USD 225 in energy costs can be saved per year by using smart LEDs. The broad range of features, such as dimming, various color tones as per requirement, automatic on/off, energy usage monitoring, and Wi-Fi, Bluetooth, or ZigBee connectivity, coupled with the growing adoption of IoT devices and voice assistant platforms, have created market growth avenues for intelligent lighting.
The major market players are entering into business partnerships with automation technology providers and telecommunication and data analytics software developers. For instance, Emerson Electric Co. and Ameren Missouri have announced a partnership to offer Emerson’s Sensi smart thermostats to Ameren Missouri users. Moreover, the integration of cloud-based services, including wireless home security and surveillance and real-time temperature monitoring systems, is rising.
In this regard, this market is expected to grow due to the technological advancements in home automation and wireless sensing devices. These technologies allow inhabitants to remotely control a number of automated home devices with software commands, thereby resulting in greater comfort and security. With the help of voice commands, people can switch on/off their lights and even control bathroom showers. Nowadays, customers are more aware of smart home technologies—from door locks and basic curtains to room lighting and other products. People want to live an enriched life and are, thus, spending more on such gadgets.
The entertainment category holds the largest share in 2024, of 35%, and it is expected to remain the largest over the next few years. This would be due to the wide variety of solutions offered by technology providers for operating as well as controlling the entertainment systems within a house. For instance, Alexa, an Amazon product, can control lights, TVs, and alarms, deliver news and sports scores, and update users with other real-time information.
The smart home healthcare category is the fastest growing on account of the rising geriatric population, increasing prevalence of chronic diseases, and surging preference for homecare. The COVID-19 pandemic has been a major driver for people wanting to be looked after in their homes and visiting the hospital as infrequently as possible. Moreover, the advancements in IoT, AI/ML, and EHR technologies encourage people to buy remote patient monitoring devices that can be synchronized to smartphones and smartwatches.
We studied these products:
Hardware dominates the market due to the burgeoning demand for smart TVs, access control systems, ACs, and lights, among other things. Further, hardware is the most expensive of all the components of a smart home ecosystem as they consist of cutting-edge sensors and other kinds of electronics. Moreover, hardware with advanced AI/ML technologies is even costlier, and its rising sales leads to the dominance of this category.
Services will witness the highest CAGR, of 9%, during the forecast period. This is because for larger projects, people often require counseling on which brand or type of appliance to buy and which connectivity protocol to choose. Installing and integrating these appliances into existing homes can be a challenging task, necessitating significant design and architectural modifications. This opportunities for professionals and companies dedicated to providing such solutions for smart homes. The need for frequent software and hardware upgrades/replacements and data backup will further drive the demand for services in the forecast period.
These offerings have been analyzed:
The wireless category holds the larger share in 2024, of 80%, and it will also be the faster-growing category in the forecast period. People prefer wireless smart appliances as they are easier to install and operate. They need no additional wiring and can be directly connected to the home Wi-Fi network. Next-generation wireless smart appliances also support other communication protocols, such as ZigBee, Bluetooth, and Z Wave.
Here are the technologies covered in the report:
The retrofit category holds the larger share as an increasing number of people are using smart appliances in their existing homes. Depending on the communication technology, additional wiring may or may not be required. Smart TVs, air conditioners, air purifiers, security systems, and lights have already become rather common in homes.
The new construction category will witness the higher CAGR, of 10%, over the forecast period. This is primarily attributed to the development of smart cities, where all houses will boast intelligent, connected appliances. The expanding access to 5G connectivity will be a key factor behind the increase in the adoption of smart appliances in newly constructed houses.
The scope includes the below-mentioned applications:
The indirect bifurcation dominates the market in 2024 with 65% share, and it will also witness the higher CAGR over the forecast period. This is because individuals generally buy home appliances from specialty retailers and e-commerce platforms, such as Amazon, Walmart, Flipkart, and eBay. These channels offer a wide variety of appliances with differentiated features from major and upcoming brands. Customers are at liberty to browse in detail, compare all specifications, and even see the products in operation before purchasing. Additionally, with the evolving preferences of customers, many specialty retailers and hypermarkets/supermarkets now offer home delivery and installation services, offering further convenience.
The report offers insights into the following sales channels:
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North America is expected to dominate the market during the forecast period. The main driving factors for the regional market are the rising demand for reliable and cost-efficient home management systems, including advanced safety and security systems; enhancing device standards, and rising demand for integrated smart devices, such as tablets, voice assistants, and IoT-enabled devices. The number of houses with such appliances and systems in North America is greater than in other regions, which is the key reason the region generates the highest revenue for product and software providers.
This APAC region is expected to grow at the highest CAGR, of around 11%, during the forecast period. The primary driving factor for this region is the increasing demand for intelligent residences in the developing countries of the region, such as South Korea, India, and China; the presence of a broad consumer base, and the rapid technological developments in such solutions.
Below is the geographical analysis of the market:
This market is fragmented as it is governed by specific technology for both wired and wireless technologies. Players offer residential building automation management system software for on-premises (for centralized connectivity) as well as cloud-based deployment (for remote connectivity). Moreover, companies sell their products via two distribution channels: one is direct and the other indirect. The supplier ecosystem and supply chain network depend on the type of technology made and distributed. Smart home automation systems are mass-produced and easily available with third-party retailers. Moreover, those integrated into luxury residences are made on the special demand of customers. However, the biggest reason for market fragmentation is the availability of a plethora of smart appliances that work on even diverse communication technologies. Moreover, companies either specialize in the hardware, software, or services, not everything at once.
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