Smart Homes Market Opportunities and Strategies to 2033

This report describes and explains the smart homes market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global smart homes market reached a value of nearly $106.8 billion in 2023, having grown at a compound annual growth rate (CAGR) of 14.2% since 2018. The market is expected to grow from $106.8 billion in 2023 to $270.92 billion in 2028 at a rate of 20.5%. The market is then expected to grow at a CAGR of 20% from 2028 and reach $675.26 billion in 2033.

Growth in the historic period resulted from the increased internet penetration, rise in deployment of 5G networks and increasing consumer preference for smart devices. Factors that negatively affected growth in the historic period include privacy and security concerns.

Going forward, the increasing demand for smartphones, increasing government support, growing need for smart security and surveillance systems, increasing demand for low carbon emission-oriented and energy-saving solutions and rising adoption of IoT devices will drive the market. Factors that could hinder the growth of the smart homes market in the future include high initial costs.

The smart homes market is segmented by product into lighting control, security and access control, heating, ventilation and air conditioning (HVAC) control, entertainment control and other controls, smart kitchen, home appliances and other products. The security and access control market was the largest segment of the smart homes market segmented by product, accounting for 27% or $28.82 billion of the total in 2023. Going forward, it is expected to be the fastest growing segment in the smart homes market segmented by product, at a CAGR of 25.6% during 2023-2028.

The smart homes market is segmented by software and services into behavioral and proactive. The behavioral market was the largest segment of the smart homes market segmented by software and services, accounting for 67.4% or $71.99 billion of the total in 2023. Going forward, the proactive segment is expected to be the fastest growing segment in the smart homes market segmented by software and services, at a CAGR of 22.8% during 2023-2028.

The smart homes market is segmented by sales channel into direct and indirect. The indirect market was the largest segment of the smart homes market segmented by sales channel, accounting for 62.9% or $67.21 billion of the total in 2023. Going forward, it is expected to be the fastest growing segment in the smart homes market segmented by sales channel, at a CAGR of 22.3% during 2023-2028.

The smart homes market is segmented by technology into wireless technology and cellular network technology. The wireless technology market was the largest segment of the smart homes market segmented by technology, accounting for 84.5% or $90.24 billion of the total in 2023. Going forward, the cellular network technology segment is expected to be the fastest growing segment in the smart homes market segmented by technology, at a CAGR of 24% during 2023-2028.

The smart homes market is segmented by standards and protocols into wireless protocols, wired protocols and hybrid protocols. The wireless protocols market was the largest segment of the smart homes market segmented by standards and protocols, accounting for 57.5% or $61.45 billion of the total in 2023. Going forward, the hybrid protocols segment is expected to be the fastest growing segment in the smart homes market segmented by standards and protocols, at a CAGR of 24.3% during 2023-2028.

Asia-Pacific was the largest region in the smart homes market, accounting for 40.9% or $43.66 billion of the total in 2023. It was followed by North America, Western Europe and then the other regions. Going forward, the fastest-growing regions in the smart homes market will be Africa and South America, where growth will be at CAGRs of 24% and 23.7% respectively. These will be followed by the Middle East and Asia-Pacific, where the markets are expected to grow at CAGRs of 22.7% and 21% respectively.

The global smart homes market is fairly fragmented, with a large number of players operating in the market. The top ten competitors in the market made up to 18.16% of the total market in 2023. Xiaomi Corp. was the largest competitor with an 8.46% share of the market, followed by NRG Energy, Inc. with 1.45%, Honeywell International, Inc with 1.41%, ADT Inc. with 1.31%, ABB Ltd. with 1.23%, Siemens AG with 1.02%, Johnson Controls International Inc. with 1.00%, ASSA ABLOY AB with 0.859%, Legrand Group with 0.858% and Schneider Electric SE with 0.55%.

The top opportunities in the smart homes market segmented by product will arise in the security and access control segment, which will gain $61.31 billion of global annual sales by 2028. The top opportunities in the smart homes market segmented by software and services will arise in the behavioral segment, which will gain $101.78 billion of global annual sales by 2028. The top opportunities in the smart homes market segmented by sales channel will arise in the indirect segment, which will gain $116.34 billion of global annual sales by 2028. The top opportunities in the smart homes market segmented by technology will arise in the wireless technology segment, which will gain $132.1 billion of global annual sales by 2028. The top opportunities in the smart homes market segmented by standards and protocols will arise in the wireless protocols segment, which will gain $81.79 billion of global annual sales by 2028. The smart homes market size will gain the most in the USA at $49.23 billion.

Market-trend-based strategies for the smart homes market include focus on integration of AI to enhance connectivity and visual clarity in smart home security, advancements in cleaning technology with laser navigation systems, launch of next generation smart lighting solutions, strategic partnerships and collaborations among major players drive innovation, introduction of smart home as a service (SHaaS) platforms to improve connectivity and focus on matter-compatible technologies to ensure centralized control of smart home devices.

Player-adopted strategies in the smart homes market include focus on launching new product solutions to expand business, strategic acquisitions to expand business expertise and strengthening business operations through the launch of new products and solutions.

To take advantage of the opportunities, the analyst recommends the smart homes companies to focus on AI integration for enhanced smart home solutions, focus on advancements in laser navigation for home cleaning, focus on next-generation smart lighting solutions, focus on smart home as a service (SHaaS) platforms, focus on matter-compatible technologies for unified smart home control, focus on security and access control segment, focus on cellular network technology segment, focus on hybrid protocols segment for growth, expand in emerging markets, focus on strategic partnerships for enhanced smart home solutions, focus on expanding distribution channels, focus on expanding in the indirect sales channel segment, provide competitively priced offerings, focus on leveraging data-driven digital campaigns, focus on enhancing brand visibility through strategic partnerships and focus on tailoring smart home solutions to end-user needs.