Smart Home device market remains resilient despite pandemicMonday, September 28th, 2020
Worldwide Smart Home Device Forecast Remains Resilient Despite Pandemic, Says IDC
FRAMINGHAM, Mass. — The worldwide market for smart home devices is expected to grow 4.1% year over year in 2020 with shipments totaling more than 854 million units, according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker. Worldwide shipments are forecast to be more than 1.4 billion in 2024 with a five-year compound annual growth rate (CAGR) of 14.0% as consumers ramp up spending and continue to invest in home automation devices and services.
“From a demand-side perspective, smart home devices have remained quite resilient during the global COVID-19 pandemic,” said Adam Wright, senior research analyst, Smart Home. “The market has lost some ground in 2020 compared to prior forecasts – a result of high unemployment and lock-down measures, among other factors – but nevertheless we anticipate positive year-over-year growth in 2020 across all device categories. As consumers shift their spending priorities from other areas like vacations, travel, and going out to eat, smart home devices have remained broadly popular.”
Video entertainment devices are expected to remain the largest category throughout the forecast, accounting for 31.3% of all shipments in 2024 as falling prices and more advanced functionalities, such as 8K video, higher refresh rates, HDR, larger sizes, and integration with smart assistants and streaming platforms, lead many consumers to upgrade their TVs and digital media adapters. New services, such as game streaming, will also play a key role in hardware upgrades throughout the home.
“In-home bandwidth requirements are also growing as consumers spend more time indoors and add to the number of connected devices within the home,” said Jitesh Ubrani, research manager for IDC’s Mobile Device Trackers. “This will likely force upgrades to the in-home network infrastructure and further drive the importance of Wi-Fi 6 in upcoming smart home devices.”
Inhibiting the market’s growth over the next several years are ongoing concerns about security and privacy, consumers’ price sensitivity to upfront and ongoing costs of devices and services, and the underlying uncertainty in labor and financial markets around the world.
Video Entertainment, comprised of smart TVs, digital media adapters such as Amazon’s Fire products or Roku devices, and other products, is expected to grow with a five-year CAGR of 6.3%. As prices on TV panels continue to fall, consumers are finding more value in replacing their entire TV rather than purchasing a digital media adapter. As such, TV shipments will grow in terms of category share and are expected to capture 60% the category by 2024.
Home Monitoring/Security devices such as cameras, door locks, doorbells, and other similar products, are on track for market-beating growth. The fear of missing out as well as security concerns are expected to drive much of the growth in these products. More importantly, the low cost of cameras (in exchange for an on-going storage subscription or data collection) has driven many vendors to shift their strategy from hardware to software and services – this will continue to bolster the category as relatively low upfront cost has enticed many new customers.
Smart Speakers, arguably the most recognizable smart home products today, are expected to grow with a CAGR of 11.1% as emerging markets slowly adopt smart home devices. While audio playback has been a driver for this category in the past, the emergence of smart displays and the steady decline in prices for traditional smart speakers are signs that audio has become a secondary feature. IDC expects the category will continue to face challenges as smart speaker functionality gets incorporated into other device types and as replacement rates continue to elongate.
Smart Home Devices, Forecast by Category, 2020 and 2024 (Shipments in millions)
2020 2020 Market 2024 2024 Market 2020–2024 Category Shipments* Share* Shipments* Share* CAGR Video Entertainment 353.9 41.4% 451.2 31.3% 6.3% Home Monitoring/Security 166.3 19.5% 303.5 21.1% 16.2% Smart Speaker 133.7 15.6% 203.9 14.1% 11.1% Others 200.2 23.4% 483.1 33.5% 24.6% Total 854.1 100.0% 1441.7 100.0% 14.0%
Source: IDC Worldwide Quarterly Smart Home Device Tracker, September, 2020
* Note: All data represents forecast values.