IDC: Smart-Home Market to Soar Through 2023

The market for smart-home technology has been around for years, but only recently has it started to really gain traction and see unit volumes take off as platforms mature and consumers warm up to the idea of putting speakers, microphones, and cameras all over their homes. Smart speakers are largely credited with leading the way, allowing users to control their smart-home gadgets using voice-activated virtual assistants.

The market is expected to continue growing at a compound annual growth rate (CAGR) of 15% in the coming years.

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Home-monitoring and security devices, such as Amazon’s Cloud Cam, are expected to be the fastest-growing category. Image source: Amazon.

Smart speakers lead the way — for now

Research firm IDC put out its latest estimates on the smart-home market today, noting that global unit volumes in the first quarter jumped 37% to 168.6 million. “This growth was driven by the growing acceptance of connected devices within the home, including smart TVs, smart speakers, cameras, door locks, doorbells, and many more,” according to IDC.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Smart speakers, which include smart displays, are growing the fastest, hitting 23.2 million units in the first quarter. Amazon.com (NASDAQ: AMZN) grabbed 22% of that total with 5.1 million units, followed by Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google with 4.1 million units. Amazon and Google remain neck-and-neck in the smart-speaker market, often trading the title of top vendor in any given quarter. Google recently reshuffled its smart-home portfolio under the Nest brand and introduced a new Nest Hub Max. That product launched in the second quarter.” data-reactid=”27″>Smart speakers, which include smart displays, are growing the fastest, hitting 23.2 million units in the first quarter. Amazon.com (NASDAQ: AMZN) grabbed 22% of that total with 5.1 million units, followed by Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google with 4.1 million units. Amazon and Google remain neck-and-neck in the smart-speaker market, often trading the title of top vendor in any given quarter. Google recently reshuffled its smart-home portfolio under the Nest brand and introduced a new Nest Hub Max. That product launched in the second quarter.

“The emergence of smart speakers and more recently smart displays has helped make the smart home market more accessible than ever before,” IDC’s Jitesh Ubrani said in a statement. “Both Amazon and Google have continued to improve their assistants and improve stickiness with consumers.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Rounding out the top five vendors are China's Alibaba, Baidu, and Xiaomi. Those companies only compete in the Chinese market, which recently overtook the U.S. as the largest smart-speaker market in the world.” data-reactid=”29″>Rounding out the top five vendors are China’s Alibaba, Baidu, and Xiaomi. Those companies only compete in the Chinese market, which recently overtook the U.S. as the largest smart-speaker market in the world.

Smart-speaker growth to decelerate

IDC breaks down the smart-home market into three main categories: video entertainment, home monitoring/security, and smart speaker. The bulk of volumes will be in video entertainment, which mostly consists of smart TVs.

Data source: IDC.

The smart-speaker market is expected to cool off slightly, not unsurprising given its blistering growth in recent years, while home monitoring/security devices should grow the fastest through 2023. Amazon and Google are both positioned to capitalize on that trend, thanks to their growing smart-home portfolios and popular platforms.

However, it’s worth noting that while many people own and buy smart TVs, a significant chunk of smart TV owners don’t actually use the integrated connectivity features because intuitive interfaces aren’t exactly TV manufacturers’ forte. For instance, roughly 25% of smart TV owners in the U.S. don’t use the TV’s built-in internet access, according to a 2018 survey from GlobalWebIndex. People prefer set-top boxes and streaming media players.

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Evan Niu, CFA owns shares of BABA and Amazon. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and BIDU. The Motley Fool has a disclosure policy.” data-reactid=”45″>John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Evan Niu, CFA owns shares of BABA and Amazon. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and BIDU. The Motley Fool has a disclosure policy.

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