Are you among the millions of people globally to have embraced smart home automation? If so, you are in good company. A new market research report shows home automation adoption growing at a staggering rate. Unsurprisingly, U.S. households are leading the way with Europe close behind.
While the report does show significant adoption of whole-home automation systems, we are also seeing significant demand for single devices and ‘point’ solutions. A point solution would be something like a robotic vacuum cleaner.
Hundreds of Millions of Systems
Research and Markets is the publisher of the report in question. According to their data, the total number of smart home systems installed at the end of 2023 was just over 279 million. An estimated 40 million were whole-home systems installed by big name players like Vivint Smart Home. They include home automation devices like light switches, smart plugs, smart thermostats, and wireless video cameras.
The remaining systems consisted of individual devices and point solutions adopted for a specific function. For example, a homeowner may not have a whole-home system, but he does have a smart lock on the front door and some smart light bulbs he programs to give the appearance that someone is home.
To me, the distinction between whole-home automation and point solutions is important. Can we truly call a home with just a few point solutions a genuine smart home, or does that require a whole-home system?
The Market in Dollars and Cents
Hundreds of millions of home automation systems and point solutions need to be worth some money, right? Absolutely. At the end of 2023, the U.S. market alone was worth an estimated $87.2 billion. That number is expected to jump to $145.1 billion by 2028, representing a CAGR of 10.7%.
It would appear from the numbers that the market is wide open. Perhaps that’s why Research and Markets makes the point of mentioning companies from “adjacent industries” jumping into the home automation pool. It is no longer just Vivint Smart Home and its whole-home competitors. We now have other companies getting involved, companies that previously offered nothing in the home automation arena.
Possible Consumer Motivations
All of this leads to the big question of what motivates consumers. Why are they buying home automation devices? What are they investing in whole-home systems? The general thinking is three-fold:
1. Convenience
Undoubtedly, some investments in home automation devices are rooted in convenience. The convenience of being able to unlock one’s front door with a swipe of a smartphone screen sure beats having to fumble with your keys when you are wrangling children or carrying in groceries.
2. Efficiency
Certain devices, like smart thermostats, are chosen because they increase efficiency. A smart thermostat can be programmed just like its traditional counterpart. But it can also artificially learn a homeowner’s routine, then adjust its own programming accordingly.
3. Security
Companies like Vivint combine the efficiency and convenience aspects of home automation with security. Their systems include things like window and door sensors, video cameras, and smoke and carbon monoxide sensors. It is not unusual for homeowners to invest in combined systems simply because it’s easier to have all of your automation and security equipment work together.
It is clear that the global market for home automation continues to enjoy significant growth. How long that growth will continue is anyone’s guess. I suspect it will continue until nearly every home in developed countries is equipped with a whole-home system that combines convenience, energy efficiency, and security. Home automation is no longer just a fad. It is here to stay.