In a recent study conducted by the International Data Corp (IDC), it has been projected that global shipments of smart home devices will face a challenging year in 2023, experiencing a decline of 1.8%. This downturn can be attributed to weak customer demand and ongoing economic instability, according to the research.
The concerning news doesn’t stop there. IDC anticipates that the market decline will persist until 2024 before witnessing a gradual return to growth, extending through 2027. By that time, smart home device shipments are estimated to reach a substantial 1.1 billion units.
Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers, noted that although certain segments have shown growth, the overall market has largely stalled due to the lack of significant upgrades between successive generations of devices. Even with the introduction of the Matter standard, which promises improved usability, it has not been sufficient to stimulate demand.
Among the different categories of smart home devices, smart speakers and networked video entertainment devices are expected to experience the most significant declines, as forecasted by IDC. Fortunately, other sectors such as lighting, thermostats, and home monitoring and security devices are predicted to witness substantial growth over the next five years. This growth will be driven by increasing consumer awareness and the emergence of new markets, according to IDC.
Adam Wright, research manager for smart home and office devices at IDC, stated, “The worldwide smart home market is witnessing uneven growth, with certain regions outperforming others. In more mature markets like the U.S., high installation rates of devices, coupled with issues of underutilization, ongoing supply chain disruptions, logistical challenges, soaring inflation, and record-high credit card debt, have negatively impacted market growth in 2022 and the first half of 2023. These factors are expected to continue exerting downward pressure on the market for the foreseeable future.”