Expected to recover in coming years
Global shipments of smart home devices experienced a setback in the first quarter of 2023, declining by 5.6 per cent compared to the previous year, according to the latest report from the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker. The report indicates that weak consumer demand and economic volatility contributed to this decline, with smart speakers and networked video entertainment devices being the most affected, experiencing drops of 15.4 per cent and 7.8 per cent respectively.
Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers, commented on the situation, stating, “While there have been pockets of growth, the market has largely stalled due to lack of meaningful upgrades between one generation of devices and the next. Even the launch of the Matter standard has not been enough to spur demand despite offering some ease of use.”
Looking ahead, IDC projects that the smart home device market will continue to face challenges, with an overall decline of 1.8 per cent expected in 2023. Factors such as ongoing disruptions in supply chains, logistics issues, high inflation, and record high credit card debt, particularly impacting mature markets like the United States, are anticipated to exert downward pressure on the market for the foreseeable future.
However, IDC also offers a glimpse of hope, predicting that the market will recover and return to growth in 2024. The report forecasts that the market will continue to grow through 2027, with an estimated volume of 1.1 billion shipments in that year.
Adam Wright, research manager of Smart Home and Office Devices at IDC, highlighted the uneven growth patterns across different regions. While mature markets such as the United States face challenges due to high installed bases of devices and issues of underutilization, emerging markets in Latin America and parts of Asia/Pacific are expected to present significant growth opportunities.
Wright stated, “The worldwide smart home market is witnessing uneven growth as some regions fare better than others. In more mature markets like the United States, ongoing disruptions from supply chains, logistics issues, high inflation, and record high credit card debt have impacted the market’s growth in 2022 and the first part of 2023 and are expected to continue to put downward pressure on the market for the foreseeable future. But other regions that are earlier in their adoption curve like Latin America and parts of Asia/Pacific have much opportunity for growth.”
Despite the challenges faced by the industry, IDC expects several smart home categories such as lighting, thermostats, and home monitoring and security devices to witness high growth over the next five years. This is attributed to rising consumer awareness of smart home devices in various parts of the world and the emergence of new markets.
The smart home device market is set to undergo a transformative phase as technological advancements and improved consumer experiences drive its resurgence in the coming years. Industry stakeholders will need to navigate the current challenges while capitalizing on the growth potential in emerging markets to ensure a thriving smart home ecosystem globally.
Tags: IDCSmart home devices
