The Smart Home market demonstrated strong growth in 2015 with no end in sight according to the 4th edition of the Smart Homes and Home Automation report recently released by the Swedish market research firm Berg Insight. Their analysts determined that the number of smart homes in Europe and North America reached 17.9 million in 2015 with 12.7 million of those found in North America. The European market has the next highest concentration; however, it is 2-3 years behind in terms of penetration and market maturity. The analysts forecast a compound annual growth rate (CAGR) of 54% over the next five years with a predicted penetration of 44.9 million smart homes or 20% of all European households by 2020.
The report paints an even rosier outlook for smart thermostats with a forecasted CAGR of 54.5% over the next five years with a total reach of 51.1 million in 2020. Growth is predicted to continue to remain strongest in North America and Europe with an expected penetration of 32.2 million homes and 18.9 million respectively. The appeal for smart thermostats is strong across consumers, energy companies, and service providers due to their strong ties to cost and energy savings, increased comfort, and convenience.
If the Berg Insight estimates for revenues from shipments of home automation systems in Europe and North America prove to be accurate at a CAGR of 34%, the industry will grow from US$ 8.9 billion in 2015 to nearly US$ 39.0 billion by 2020. The Home Automation market has captured the attention of tech industry giants like Google, Amazon, Microsoft and Apple and it is good to see the financial figures line up to back the excitement surrounding the opportunities for home automation and the Internet of Things (IoT).
Other than the smart thermostat, what do you think will be the product that drives the growth in the home automation market?