Global consumer spending on smart home solutions is set to grow to $123 billion in 2021 after declining in 2020 due to the economic impact of COVID-19.
Strategy Analytics’ 2021 Global Smart Home Forecast report said consumer spending in 2021 on smart home products and services will break through the $100 billion mark after falling short in 2020 due to the pandemic.
Consumers that postponed installations are fulfilling their planned purchases as 30 million additional households acquire smart systems in 2021. The market will continue grow to $173 billion in 2025 when nearly 20 percent of all households globally have at least one smart home product in use up from 15 percent by the end of 2021.
North America is the largest market in 2021 accounting for 40 percent of all consumer spending followed by Asia-Pacific with 29 percent of spending and Western Europe with 18 percent.
Security systems are driving growth in the US and in Western Europe surveillance cameras, smart bulbs and electrical devices are driving smart home adoption.
There are more smart homes in Asia-Pacific but spending per home is half of what it is in the US. As adoption rises among the one billion homes in the region, Asia-Pacific will become the largest smart home market by the late 2020’s.
Bill Ablondi, Director of Strategy Analytics’ Smart Home Strategies advisory service, said, “The smart home market is recovering from the economic and social distancing impacts caused by the pandemic and after spending more time at home consumers are seeking ways to improve their home and are finding that smart home solutions offer enhancements they value.”
Prices for smart home products have continued to drop dramatically making it easier for consumers to try various devices without breaking their bank accounts. This is driving adoption and increasing spending as people buy two or three surveillance cameras instead of one or add half a dozen smart bulbs in their home, Jack Narcotta, Senior Industry Analyst in Strategy Analytics’ Smart Home Strategies advisory service, said.
