A new report from Juniper Research predicts that global revenues for smart home hardware and services are set to grow from $83 billion this year to $195 billion by 2021.
Smart home revenues across entertainment, automation, connected devices and healthcare are expected to experience rapid growth as public skepticism diminishes and IoT products become smarter and more affordable.
The paper, titled Smart Home Markets: Entertainment, Monitoring, Automation, Health, Metering, Appliances 2017-2021, is the latest forward-looking project from Juniper Research. It found that home automation and smart appliances will witness the fastest growth over the next five years.
This will, in part, be driven by established manufacturers, including Samsung and Bosch, increasing their output of connected units.
Smart home market will see continued domination from ‘Big 4’
The Juniper Research report suggests that in the coming years, market leaders Alphabet, Amazon, Apple and Samsung will increase their market dominance by building on current assets, such as cloud services, and popular device product lines.
Amazon was picked out by the report, as its use of cloud service Amazon Alexa and its ability to capitalize on a strong eCommerce presence puts the retail giant in a leading position.
Research author Sam Barker said: “The company [Amazon] has managed to maximize its value proposition for Alexa by partnering with a large range of complementary players in the market, whilst utilizing its own cloud platform to set Echo and Alexa apart from its competitors in terms of functionality.”
In a recent statement, Fred Potter, CEO of smart home manufacturer Netamo, outlined the future of the sector as he sees it:
“The connected home has become a reality,” he said, “due to the development of broadband, the increased use of smartphones to control devices remotely, Artificial Intelligence offering new services and a better user experience, and greater interoperability that make devices interact and create a more personalized service.
“The smart home is becoming tangible. Interoperability platforms such as Apple HomeKit or Amazon Echo are contributing to the quickening pace of market growth. The next step is the integration of Artificial Intelligence within the home infrastructure to offer new functionalities to users.”
Room for disruption in the smart home sector
Juniper Research predicts that the smart home landscape will shift over the next five years. The revenue share of smart entertainment will slow as emerging market segments, including smart appliances and home automation, grow in popularity.
The revenue share of streaming sites such as Netflix and Amazon is also set to fall from its current level of 70 percent of the total market to 50 percent in 2021.
At the same time, the report picked out segments such as Monitoring & Automation, which are open to disruptive entrants that can and will rival established players with original approaches to product development.