Smart home market struggling - IDC releases quarterly report

Worsening macroeconomic conditions have led to a reduction in the outlook for global smart home device shipments according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker.

Worldwide shipments of smart home devices are now expected to decline 2.6% in 2022 to 874 million units with smart speakers and video entertainment devices such as TV and streaming devices facing the brunt of the decline.

Adam Wright, Senior Research Manager, Smart Home and Office Devices, comments, "Shipments of smart home devices have been impacted significantly by ongoing supply chain disruptions.

"Moreover, we're witnessing downward pressure on demand in 2022 as inflation continues to squeeze consumers' wallets. Looking ahead, we expect volatility will continue to inhibit the market's growth in 2023 and beyond."

Though the global market is forecast to return to growth in 2023, it will remain relatively low at 4.6% with most of the growth coming from emerging markets as well as China.

Jitesh Ubrani, Research Manager for IDC's Mobility and Consumer Device Trackers, says, "Though smart speakers arguably helped launch the smart home category, the shine of these products has largely worn off for consumers in developed markets such as the United States and China with shipments expected to decline in the long run."

He comments, "Smart speakers will now rely on emerging markets and places like Europe where language and lack of services have been a barrier to adoption in the past."

Among the other form factors, home monitoring/security products such as cameras, doorbells, or door locks, as well as smart lighting and video entertainment products will account for the largest share and experience the highest growth rates within the smart home market, IDC states.

Smart home devices by product category, forecasting shipment volume, market share and five year CAGR from Q3 2022:

• Video entertainment 2022 shipments were at 296.1 million with 33.9% market share. This will drop to 27.4% market share in 2026, with shipments of 325.9 million and CAGR of 2.4%.
• Home monitoring/security 2022 shipments were at 188.6 million, with a market share of 21.6%. This category will grow at a CAGR of 9.0% to reach 22.4% market share of 266.1 million shipments.
• Lighting is at 94.7 million shipments in 2022 with 10.8% market share. In 2026 it will reach 18.0% market share and 213.5 million shipments with a significant CAGR of 22.6% over the five years.
• Smart speakers reached 116.4 million shipments with a market share of 13.3%. In 2026, this is forecast to reach 132.9 million shipments with a market share of 11.2% and CAGR of 3.4%.
• Thermostat shipments reached 24.8 million to make up 2.8% market share. In 2026 this is expected to reach 31.3 million shipments at a 2.6% market share and a CAGR of 6.0%.