According to ABI Research, the global smart home market is expected to reach $123 billion by 2022, up from $56 billion in 2018. That growth and the potential for the smart home to be at the heart of consumers' daily lives and purchasing decisions has brought a growing number of players and offerings competing to gain a foothold in the market. The result is a current smart home ecosystem that is immensely complicated. The entire smart home market will need to diversify and be more collaborative for vendors to increase their market share, ABI says.
ABI identifies more than 150 vendors in six main smart home service sectors: Security, Energy Management, Home Entertainment & Media Management, Home Maintenance, Health, and Personalization. Each service sector is a key area for adoption and growth and numerous solutions ranging from voice control and smart plugs to Electrical Vehicle (EV) chargers and motion sensors.
While some of the largest companies in the world - Amazon, Apple, Google, and Samsung - are actively engaged in the smart home market, they do not have the ability to provide everything needed in the smart home space. Partnerships are key for any smart home player, ABI believes. Players need to position themselves to maximize their return on investment, create new revenue streams, identify which channel partners will maximize their go-to-market strategies and zero in on the real competitors for mergers and acquisitions as well as product development.
"The holistic picture of the smart home landscape shows it is getting more crowded with nontraditional vendors, making it more difficult for both established and new players to see where opportunities and adjacencies lie," said Stuart Carlaw, chief research officer at ABI. "A complete look at the entire ecosystem shows how the smart home is crossing over to smart mobility and ultimately smart cities, and this will require extensive collaboration among companies; no one company can survive the smart home market alone."
For instance, well-known automobile manufacturers BMW and Tesla are getting pulled into the smart home ecosystem because they make connected EV chargers. Traditional window manufacturers Pella and Velux make smart enabled windows and blinds.
"However, Samsung and Apple are not in the EV and smart blind markets, respectively, proving that these types of established companies must diversify and collaborate to increase their share of the smart home market," said Carlaw.