- Connected-home device shipments will grow at a compound annual rate of 67% over the next five years and hit 1.8 billion units in 2019, according to BI Intelligence estimates. We include consumer-targeted smart appliances, smart security and safety systems, and internet-connected home-energy equipment in our definition for connected-home devices.
- The connected-home category will make up about a quarter of shipments within the broader Internet of Things category this year, but that share will increase gradually to roughly 27% in 2019 based on our forecast, as growth picks up.
- Connected-home device sales will drive over $61 billion in revenue this year. That number will climb at a 52% compound annual growth rate to reach $490 billion in 2019.
- Home-energy equipment and safety and security systems, including devices like connected thermostats and smoke detectors, will become popular first, leading the way to broader consumer adoption. Those two categories will account for about 72% of connected-home device shipments this year.
- Consumer awareness and interest in connected-home devices is growing significantly. In the US, nearly two-thirds of Wi-Fi-equipped households are interested in a connected-home device bundle from their wireless service providers, according to survey data from Parks Associates.
- Millennials and people who have been in their home for between three and four years are the most inclined to buy connected-home devices. In each of these demographic groups, 10% of US residents already owns a smart home device.
- There are several barriers on both the consumer and vendor side that will have to be overcome, particularly price and security concerns. Roughly 58% of consumers who do not own a connected-home device say they are put off by price, according to a Bloomberg West survey. A significant number also have concerns about privacy and security. The market is also fragmented. Vendors and developers must adopt a standard so that multiple devices can sync and communicate with one another.
- The industry is ripe for consolidation. Larger tech companies have already acquired upstart device-makers like Nest and SmartThings. Legacy consumer-electronics firms are also looking to enter the space.
Shipments Forecast And Market Size
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