The common trend across various industries is energy efficiency, which can be attributed to the limited resources of power generation that humanity has managed to develop as opposed to the radical infrastructural development for increasing populations. The concept of smart homes tags along the similar lines of energy efficiency, but moves beyond too, formulating ease of living applications such as lighting controls, security, and entertainment. According to a recent business intelligence report by Transparency Market Research (TMR), the demand in the global smart homes market will multiply at a striking CAGR of 14.6% during the forecast period of 2017 to 2025. Revenue-wise, the market for smart home tools and services are estimated to generate opportunities worth US$97.61 billion by the end of 2025, mounting substantially from its evaluated worth of US$30.02 billion as of 2016.
The analyst of the TMR report has notified of a moderately competitive vendor landscape, which can be attributed to a handful of players connected to the value chain. That being said, the number of participants is expected to radically rise in the near future owing to the sheer profitability of the domain. To maintain their slender position of strength, well-established players such as Honeywell International, Inc., Johnson Controls, Inc., Schneider Electric SE, ABB Ltd, and Siemens AG are expected to consistently improve their product portfolio as well as indulge into strategic mergers and acquisitions. Additionally, prominent companies are also focusing on devising customized solutions to different segments of end users.
Based on application, the market for smart homes has been segmented into entertainment control, heating, ventilation, and air conditioning (HVAC) controls, security and access control, and lighting controls. Among these, the HVAC segment continues to provide for the most prominent chunk of demand, which can be attributed to significant energy reliance of these controls. Geographically, the developed countries of the U.S., France, and Germany are expected to maintain North America and Europe as the regions with maximum potential.
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The increasing possibilities with the Internet of Things (IoT) is proving to be a boon for the smart homes market. With the prices of sensors and processors dropping, the automation of homes to save energy is turning into a liking for the urban populations. Across emerging economies, disposable income has increased among urban populations and their new emphasis is on using controls that bring ease of living. With smart home tools, security can also be enhanced multiple folds, and hence the growing uptake. On the other hand, cost of these tools and services and the constant need for maintenance are some of the restraint factors that are curtailing the profitability of the smart homes market.
- Global smart homes market is estimated to be worth US$97.61 billion by 2025
- Although only a handful of companies are currently holding the major shares in the smart homes market, a number of newer players are foreseen to make a foray and intensify the competition in the near future.
- Emerging economies in Asia Pacific, such as China, India, and Japan, are expected to generate substantial new demands towards the end of the forecast period, and the players are suggested to expand geographically to gain greater demands.