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Smart Home Market and its key opportunities and challenges

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Smart Home Market and its key opportunities and challenges

August 25
11:56 2020
The Smart Home Market is expected to grow from USD 76.6 billion in 2018 to USD 151.4 billion by 2024, at a CAGR of 12.02% as per a report by MarketsandMarkets.

The Smart Home Market is expected to grow from USD 76.6 billion in 2018 to USD 151.4 billion by 2024, at a CAGR of 12.02% as per a report by MarketsandMarkets. 

Why expected incorporation of lighting controllers with in-built data-connectivity technology remains a good opportunity?

The lighting control market has seen considerable growth over the past few years. This market includes a considerable number of products such as dimmers, timers, occupancy sensors, daylight sensors, and relays. These products are used either independently or in an integrated form. They can be integrated with home automation systems through wired and wireless technologies. To enable their automated operations, lighting controllers have to be externally integrated with communication protocols. However, lighting control manufacturers are now manufacturing products with inbuilt data connectivity. These controllers can be operated directly, without external communication protocols and connectivity. This is expected to create a considerable demand for such products, thereby creating opportunities for the smart home industry players.

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How linking disparate systems, limited functionality, and lack of open standards could act as a key challenge?

Currently, the smart home market is fragmented as many competing manufacturers are developing various smart home systems with different technologies. It is easy to integrate devices made by the same manufacturer or vendor; however, it is difficult to integrate disparate systems offered by different manufacturers or vendors. Integrating devices from disparate vendors often results in limited functionality and unreliable services. Further, many systems in the market have complex interfaces that limit the functionality of smart home systems. Hence, issues associated with linking disparate systems and the difficulty of integrating security systems are the major challenges faced by smart home devices and control manufacturers.

Smart home device manufacturers are focusing on the development of open protocol devices, with the BACnet or LonMark interoperability, as these 2 are the only open standard protocols for communication. However, in the new world of convergence, systems that assert to offer interoperability and match the industry standards need to provide connectivity with other equipment that can integrate seamlessly into the network. The BACnet and LonMark interoperability alone cannot ensure a total enterprise information compatibility and interoperability.

The wireless communication between various equipment in smart homes is facilitated by ZigBee, EnOcean, Z-wave, and Wi-Fi technologies; ZigBee is widely used by system manufacturers for wireless communication.

Rapid proliferation of smartphones and smart gadgets

The advent of high-speed Internet broadband, Wi-Fi, and Bluetooth has broadened the use of smartphones worldwide. Approximately, 2.1 billion people were using smartphones in 2016. By 2020, the percentage of global households with Internet access is expected to reach 69%, while the global smartphone penetration is expected to reach 75%. Several companies have seen the potential of the successful adoption of smart home technologies. Hence, they have developed smart devices enabling home automation. The increased penetration of smartphones has facilitated the use of smart home devices with the push of a button. Nest Labs, acquired by Google, Inc. in 2014, is a company that develops smart devices for automation and offers smartphone-enabled home automation. Further, with the growth in the number of smartphone users worldwide, the smart home market is expected to witness a major boost during the forecast period.

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