The downward trend is attributed to a combination of factors including wage stagnation, increased unemployment, and a large decline in projected retail sales, especially in 2022. Strong growth, on par with pre-pandemic levels, is expected to return starting in 2023, driven by increased demand in energy management solutions and the impending release of the Matter standard.
According to the latest smart home device research from Omdia, smart speakers had the most global shipments in 2021, with 195 million followed by lighting, plugs/switches and connected health devices. The devices forecast to grow the fastest over the next five years include water leak sensors/shutoff valves, connected major home appliances, plugs/switches, air quality monitors and smart door locks, all projected to have a CAGR (Compound Annual Growth Rate) greater than 30% from 2021 to 2026.
In terms of household penetration of smart home devices, Omdia estimated in 2021 about 55% of broadband households in the US had smart home devices installed. For the Europe, Middle East, and Africa region, about 21% of broadband households had a smart home device in 2021. By comparison, the Americas region had a penetration rate of 44% while Asia and Oceania had a penetration rate of about 14% in 2021.
In terms of market share for unit shipments, Xiaomi was estimated to be the market leader in 2021, followed by Alibaba, Amazon, Google, and Baidu. All of the top-five brands specialize in smart speakers, while next four brands, IKEA, Sengled, Ledvance, and Signify, specialize mostly in lighting applications.
Says Blake Kozak, Senior Principal Analyst, Omdia:
“It is an exciting time for the smart home industry as brands rapidly innovate and produce devices that combine advanced features, like facial recognition and video analytics with door locks and the inclusion of radar technology in smart speakers and thermostats.
“Brands are also making moves in terms of partnerships and acquisitions, like ADT acquiring Sunpro Solar and IOTAS. Advancements in connectivity standards like ultra-wideband, Thread and NB-IoT will also bring new use cases to the smart home market, improving both accuracy and distance.”
However, the next few years will also prove difficult for many brands as costs continue to rise. As a result, the price of services may increase (Wyze and Ring) as brands grapple with ongoing costs while one-off hardware sales face increased price pressure from low-cost brands.