GOTHENBURG, Sweden — The number smart homes in North America and Europe reached a total of 17.9 million in 2015, according to a new research report from Berg Insight. North America is the world’s most advanced smart home market and the region had an installed base of 12.7 million smart homes at the end of the year, a 56 percent year-on-year growth. The strong market growth is expected to last for years to come, driving the number of smart homes in North America to 46.2 million by 2020, which corresponds to 35 percent of all households.

The European market is two to three years behind North America in terms of penetration and market maturity. At the end of 2015, there were 5.3 million smart homes in Europe and the market is forecasted to grow at a compound annual growth rate (CAGR) of 54 percent in the next five years to reach 44.9 million smart homes by 2020, which corresponds to 20 percent of all European households.

The most successful products in the smart home market include smart thermostats, security systems, smart lighting, network cameras, and multi-room audio systems.

“There is no doubt that regular consumers in the future will own and operate a wide range of connected objects in their homes, from connected home appliances and luminaires to thermostats and security devices” said Johan Svanberg, senior analyst, Berg Insight. The smart home market is still in its infancy though and many smart home ecosystems are underdeveloped and products are often complicated to use. “Attractive use cases, interoperable devices, and well-implemented user interfaces are needed in order to accelerate the market,” added Svanberg.

Several major companies are now betting on voice-driven user interfaces to make it easier to control smart home solutions. The Alexa service from Amazon has quickly become popular and shows the value of smart home solutions to a broader audience. Furthermore, Apple’s HomeKit platform supports the company’s voice-driven digital assistant Siri. Microsoft is likely to push its Cortana service as a foundation for controlling connected devices and services, and Google announced its conversational digital assistant named Google Assistant in May 2016.

For more information, visit www.berginsight.com.

Publication date: 6/20/2016

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