Smart home to achieve 14.9% CAGR by 2023

According to IDC Global Quarterly Smart Home Device Tracker (Smart Home Device Tracker), global smart home device shipments reached 168.6 million units in the first quarter of 2019, up 37.3% from the previous year, and this growth is triggered by connected devices inside the home (including smart TVs, smart speakers, cameras, door locks, doorbells, etc.) are increasingly being embraced by consumers.

The fastest growth in the quarter was in global smart speaker shipments (including smart displays), which totaled 23.2 million units, up 37.3 percent from the previous year. Amazon led the market with 5.1 million units shipped in the first quarter, Google came in second with 4.1 million units sold, followed by the two U.S. companies by three Chinese companies – Alibaba, Baidu and Xiaomi – all focused on China’s domestic market.

Jitesh Ubrani, research manager for IDC’s mobile device tracking division, said, “The emergence of smart speakers and, more recently, smart displays has helped consumers reach the smart home market more easily than ever before.” Both Amazon and Google are continuing to improve their mainstay products and increase their stickiness to consumers. While this raises privacy concerns and has successively prompted both companies to configure some privacy-related features, it also empowers business opportunities for other platforms and device manufacturers to offer a more personal smart home experience and get a piece of the market.”

IDC expects the global smart home market to reach 840.7 million units from the first quarter of 2019 through the end of this year, growing to 1.46 billion units by 2023, at a compound annual growth rate (CAGR) of 14.9 percent.

“Services will be a potential driver of this market,” said Adam Wright, senior research analyst for IDC’s IoT Consumer Products Group. “While device elements such as design and reliability are necessary for success, differentiation and profits come from other sources. IoT consumer products are accelerating the integration of service value while the device itself will continue to be less profitable. The breadth, depth, uniqueness and quality of data sets will increasingly determine the value potential of consumer IoT providers, and as device margins decline, the role of the device will largely be relegated to that of a service delivery medium.”

Data for different types of smart home devices, 2019 and 2023

Among the various device types, video entertainment devices are predicted to lead the way, accounting for 29% of all shipments in 2023, due to advances in TVs, such as 8K, higher refresh rates, HDR and larger sizes, which will prompt many consumers to upgrade their hardware devices. In addition to this, home surveillance and security devices, primarily driven by cameras, door locks and doorbells, will account for 23.9% of shipments in 2023, growing at a CAGR of 20.8%. Growth in smart speakers and displays is expected to slow to single digits, with a year-over-year growth rate of just 4.7% in 2023, as other devices such as TVs, thermostats, and lights will begin to be integrated into the functionality of smart speakers.

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Categorized as Smart Home

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