Smart Home Automation Market Size, Share, Trends, Growth and Forecast 2032

Smart Home Automation Industry Prospective:

The global smart home automation market size was worth around USD 95.48 billion in 2023 and is predicted to grow to around USD 436.60 billion by 2032 with a compound annual growth rate (CAGR) of roughly 18.40% between 2024 and 2032.

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Smart Home Automation Market: Overview

Smart home automation refers to devices and solutions designed to automate the functions of devices used in homes. The automation can be processed through rules, scenes, or schedules. For instance, turning on a light with a voice command or an action is an example of a smart home automation system. These tools are designed to make everyday life more convenient as they offer several benefits. Moreover, smart home automation systems can play a crucial role in energy-saving initiatives since these solutions do not solely rely on human intervention to perform certain actions.

Moreover, the ongoing proliferation of Internet of Things (IoT) technology along with greater acceptance of smart devices across homes worldwide is fueling the market demand rate. Smart home automation is divided into three segments: monitoring, controlling, and automating. During the forecast period, the e-commerce industry is expected to shape the future of smart home automation along with a surge in product innovation. However, the high cost and maintenance of the products will limit the smart home automation industry’s adoption rate.

Key Insights:

• As per the analysis shared by our research analyst, the global smart home automation market is estimated to grow annually at a CAGR of around 18.40% over the forecast period (2024-2032)
• In terms of revenue, the global smart home automation market size was valued at around USD 95.48 billion in 2023 and is projected to reach USD 436.60 billion by 2032.
• The smart home automation market is projected to grow at a significant rate due to the growing rate of home improvement and construction projects.
• Based on application, the smart kitchen segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on the components, the hardware segment is anticipated to command the largest market share.
• Based on region, North America is projected to dominate the global market during the forecast period.

Smart Home Automation Market: Growth Drivers

Growing rate of home improvement and construction projects to drive market demand rate

The global smart home automation market is expected to grow due to the rising construction of modern homes. In addition to this, a surge in home redevelopment and improvement projects will further contribute to the global market demand rate. Countries across the world are registering higher migration of people to urban areas driven by several factors. The increase in job opportunities, growing disposable income, and better amenities offered by modern homes are some of the prominent attractive aspects of urban housing facilities.

Moreover, market research suggests that the most prevalent reason for increased home development projects is a better standard of living. According to the market study, in the first quarter of 2024, the US registered over USD 400 million in home improvement-related expenditures. Such projects create opportunities for the installation of smart home systems as people are willing to spend more on modern facilities that aid everyday lifestyles.

Higher demand for security-related smart home automation solutions will promote a market expansion rate

The demand for security smart home automation systems is expected to fuel market revenue in the coming years. The growing crime rate in urban and rural areas is encouraging more homeowners to opt for advanced anti-burglary or anti-theft systems that protect residents and their property in the event of a crime. More than 50% of homes in the US are equipped with home security systems. Product innovation and growing consumer awareness are key to future trends in the industry.

In May 2024, Onetouch, a global leader in home security solutions, announced the launch of its latest innovations at the Smart Home Expo 2024. Some products launched at the Expo included OneTouch Smart Video Door Phone With built-in Network Video Recorder (NVR) and OT500 Digital Door Lock. The former showcases state-of-the-art features such as Biometric access, strong mortise, and integration with smartphones. The development of novel products will attract more customers in the global smart home automation market.

Smart Home Automation Market: Restraints

High initial cost and maintenance expenses will limit the industry’s expansion possibilities

The global industry for smart home automation is expected to be limited by the higher cost of buying and installing smart home automation systems. These solutions are made using modern technologies such as IoT. The cost increases along with the addition of novel offerings such as climate control, voice control, and others. The maintenance of smart home automation tools is equally high.  The lack of easy access to repair centers and maintenance units further discourages product adoption rate.

Smart Home Automation Market: Opportunities

Shifting focus toward energy efficiency will generate higher demand for market players

The global smart home automation market is projected to generate more growth opportunities due to the growing focus on energy-efficient solutions. Installing solutions that offer smart energy consumption is critical to saving power-related costs. In addition to this, energy-efficient smart home automation devices contribute to positive environmental impact. They reduce the amount of greenhouse gas emissions.

The Bureau of Energy Efficiency (BEE), a part of India’s Ministry of Power, has launched several energy efficiency programs focusing on lighting in household centers along with other commercial facilities. Furthermore, the fluctuating yet growing price of energy fuels such as coal and power may create more demand for smart home automation devices.

E-commerce sector to promote exceptional growth in the industry during the forecast period

The proliferation of the global e-commerce industry and online product delivery portals are expected to generate more demand in the industry. E-commerce websites offer several advantages. It allows companies to reach remote and international buyers. On the other hand, the sale of smart home automation systems through online channels is guided by the availability of several monetary and non-monetary incentives such as discounts and credits attracting a larger group of consumers.

Smart Home Automation Market: Challenges

Risk of cyber-attacks and data breaches may challenge the market expansion rate

The global smart home automation industry is projected to be challenged by the higher vulnerability of the solutions to cyber-attacks. Smart home automation systems can be hacked using advanced software and programs. Additionally, home automation tools provide access to the private information of homeowners. Confidential data is put at risk in the event of a security breach.

Smart Home Automation Market: Segmentation

The global smart home automation market is segmented based on application, technology, component, and region.

Based on the application, the global market segments are smart kitchen, entertainment, security, HVAC & energy management, and others. In 2023, the highest growth was observed in the smart kitchen segment. The surge in the launch of new and highly modern kitchen appliances with sophisticated features is fueling segmental demand in modern homes. These kitchen appliances can be controlled remotely with the use of applications on smartphones. Home security systems and heating, ventilation, & air conditioning (HVAC) and energy management segments will also contribute to the market growth rate. Over 87% of homes in the US have HVAC systems.

Based on technology, the global smart home automation industry is divided into wireless, cellular, and others.

Based on the components, the global market divisions are software, hardware, and services. In 2023, the highest demand was registered in the hardware segment. Growing application of home security systems, smoke detectors, and smart kitchen appliances are responsible for improved segment growth rate. Product innovations such as compact sizing, wireless connectivity, and portability are integral to modern smart home automation tools. The average cost of a smart home security system is over USD 600.

Smart Home Automation Market: Report Scope

Smart Home Automation Market: Regional Analysis

North America to continue leading the market growth rate during the projection period

The global smart home automation market is expected to be led by North America during the forecast period. The higher disposable income and living standards fuel the regional market growth rate. Additionally, the growing home redevelopment expenditure in Canada and the US will likely create more growth opportunities for the expansion of smart home automation systems.

According to market research, over 50% of homes in the US have video home surveillance systems. Additionally, the regional population has shown greater affinity toward modern solutions that ease every task. Smart kitchen appliances in North America are widely popular. In May 2024, Thermomix, a leading producer of all-in-one Wi-Fi-connected cooking appliances, announced the launch of the Thermomix® Sensor. It is a one-of-its-kind smart thermometer used for monitoring food temperature.

Europe is an important market for smart home automation tools. The surge in criminal activities along with rising rates of product innovation are fueling the regional market growth rate. In October 2023, Resideo Technologies, a leading provider of security & comfort solutions, launched the ProSeries Security and Life Safety platform in Europe. Equipped with carbon monoxide and smoke detectors, it is specially developed for small business and residential applications.

Smart Home Automation Market: Competitive Analysis

The global smart home automation market is led by players like:

• Honeywell
• Amazon
• Bosch Smart Home
• Apple HomeKit
• ADT
• Google Nest
• Xiaomi
• August
• Samsung SmartThings
• SimpliSafe
• Philips Hue
• Lutron
• Ecobee
• Sonos
• Ring.

The global smart home automation market is segmented as follows:

 By Application

•  Smart Kitchen
•  Entertainment
•  Security
•  HVAC & Energy Management
•  Others

 By Technology

•  Wireless
•  Cellular
•  Others

 By Component

•  Software
•  Hardware
•  Services

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa