The rising consumer disposable income and growing expenditure on luxurious lifestyles are boosting the market for the smart home.
The global smart home market was valued at US$ 79.63 Bn in 2020 is expected to reach US$ 162.69 Bn by 2027, with a growing CAGR of 10.7% during the forecast period (2021-2027).
Home automation technology has given birth to the smart home that brings in a new level of comfort to a conventional home. The smart home industry has witnessed enormous consolidation over the years. Though there has been consolidation the emerging companies in the smart home market space have the potential to provide innovative products with the purpose of changing the industry. These emerging players are growing with the support of new technologies, government support, crowd funding, adoption of social media, and the use of technologies such as rapid prototyping, further driving the market for the smart home.
The use of technology such as Internet of Things (IoT) is increasingly shaping the smart homes. Further the growing awareness regarding energy efficiency and cost efficiency is adding to the overall industry growth. In addition to this, the government across the globe are undertaking initiatives to support the smart homes market. Some of the initiatives supporting the growth of smart home are the ‘Digital India’ campaign, "Das Haus" Vision: Innovation in Renewables and Energy Efficiency, Energy Plus House and WiMAC@home (Wireless Media and Control at Home), among others.
Moreover, the data privacy issues and concerns over data security along with device malfunctioning are some of the key factors restraining the market growth. Smart homes are largely dependent on the internet, communication technologies, and smart devices. There are high chances of software glitches, technical complexities, or device disconnection. One of the key challenges of the smart home market is compatibility owing to the presence of large devices there is a need for various applications that can test the feasibility of the market. Network connectivity is another common issue encountered by smart home owners disrupting the growth of the market. Other challenging factors are low battery life, lack of interoperability, and high cost of installation and products.
In terms of geography, the Asia Pacific is the fastest growing region coupled with huge internet penetration, growing consumer incomes, excellent adoption of smartphones, and huge manufacturing capacity among others. The region is home to about 60% of the world population providing enormous opportunities for the growth of smart homes. The countries such as China, India, and Japan are the major contributors to the market. The rapid digitization, rising need for energy conservation supported by government initiatives, and rising consumer awareness are further boosting the growth of smart home in the region.
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