Smart Homes Will Reach 179 million in Europe and North America in 2024

Smart Homes Will Reach 179 million in Europe and North America in 2024

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The number of smart homes in Europe and North America reached 102.6 million in 2020, according to new research from Berg Insight. The most advanced market is North America, having an installed base of 51.2 million smart homes at the end of the year.

This represents a penetration rate of 35.6 percent. Between 2019 and 2020, the number of smart homes in North America grew by 18.7 percent year-on-year. The strong market growth is expected to continue in the next years. By 2024, Berg Insight estimates that close to 78 million homes in North America will be smart, meaning 53 percent of all homes in the region.

The European market is still behind the North American, in terms of market penetration. There was a total of 51.4 million smart homes in Europe at the end of 2020. The installed base in the region is forecasted to exceed 100 million homes at the end of 2024, representing a market penetration of 42 percent.

The Covid-19 pandemic has so far had a very limited negative effect on the smart home market in the two regions. While sales in brick-and-mortar stores declined, online sales instead surged. Many people spent more time at home during the pandemic and thus became interested in smart home products that improve their home.

The most popular smart home products include smart thermostats, smart light bulbs, smart security cameras, smart door locks, smart plugs and smart speakers. On the North American market, interactive home security systems have emerged as the most common type of smart home systems. In Europe, traditional home automation systems and DIY solutions are more common as whole-home systems.

“While connectivity is starting to become a standard feature in some home product categories, there is still a long way to go before all products in the home are connected and able to speak to each other”, says Martin Backman, Senior Analyst at Berg Insight.

“The market opportunity and growth potential in the smart home market are still enormous. Products and systems related to security and energy management have so far been the most successful as they provide a clear value for consumers. Vendors of smart home products in other segments need to develop solutions where connectivity offers time savings, cost savings or other benefits that consumers are willing to pay a premium for”, concluded Backman.

Participants in the smart home industry are now focusing increasingly on the software side of the solutions to develop compelling use cases. Ease of installation, integration with other IoT devices and security will remain key priorities for consumers.

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