IDC has issued its latest Worldwide Quarterly Smart Home Device Tracker, tipping a 23.5 increase in the number of smart home devices shipped in 2019, from 2018, and a five-year compound annual growth rate of 14.4 percent, which would take 2023 shipments to 1.4 million devices.
IDC’s senior research analyst for consumer IoT, Adam Wright, said growth would be driven by: a combination of downward pressure on prices from intensifying competition; rising adoption of smart assistants; rising consumer awareness of the conveniences, costs savings, and energy reductions that smart home devices provide.
IDC expects the US to represent the lion’s share of unit shipments in each year, accounting for more than 560 million units shipped in 2023. China will be the second-largest country by shipment volume each year but represents the highest growth rate at a CAGR of 22.6 percent between 2019 and 2023, followed by Canada with a CAGR of 19.9 percent and Western Europe with a CAGR of 14.7 percent.
Jitesh Ubrani, research manager for IDC’s Mobile Device Trackers, said video entertainment products such as the Fire TV or Chromecast would at the forefront for the smart home market and would serve as an on-ramp for consumers entering the world of connected home products.
Video will lead the smart home charge
IDC expects video entertainment devices to maintain the largest volume of shipments, accounting for 29.9 percent of all shipments in 2023 as falling prices and advances in functionalities such as 8K, higher refresh rates, HDR, larger sizes, and integration with smart assistants and streaming platforms lead many consumers to upgrade their sets.
Home monitoring/security devices like smart cameras and smart locks will account for 22.1 percent of the shipments in 2023 with a CAGR of 18.4 percent.
Growth in smart speakers and displays is expected to slow to single digits in the next few years with 8.7 percent year-over-year growth in 2022 and 4.7 percent in 2023 as the installed base of these devices approaches saturation and consumers look to other form factors to access smart assistants in the home, such as thermostats, appliances, and TVs.
On the downside, IDC says concerns about security and privacy, consumers’ price sensitivity to upfront and ongoing costs of devices and services, and the rising economic uncertainty stemming from the volatility of financial markets across the world will combine to inhibit market growth.
