Home automation and the Internet of Things were the talk of the 2015 International CES. It’s also a massive emerging market in value terms and a great opportunity for retailers to invest in providing installation services alongside high tech products.
A new report out of the United States from Transparent Market Research valued the global home automation market at US$4.4 billion in 2014 and predicted it would increase at a compound annual growth rate of 26.3 per cent until 2020.
Driving the market are automated solutions for lighting, security, monitoring and managing energy usage, entertainment, heating and cooling.
North America was the biggest region driving the market in 2014. Europe and Asia Pacific followed North America in the global home automation market to collectively account for more than 40 per cent of the global market revenue share, the report said.
The report also discussed trends which are boosting the market, such as a broad awareness of the need to conserve energy, and that a high degree of internet connectivity and penetration in developed countries such as the US, the United Kingdom, France and Germany is also contributing to the growth of home automation market globally. An unreliable internet connection would be a major stumbling block delaying the uptake of these systems.
A major barrier to entry for consumers will be the (perceived or real) difficulty of the setup processes that accompany these systems, providing savvy retailers with an opportunity to add to their revenue sources by providing smart home installation services.
The report segmented the home automation market by networking technology into wired systems, power-line systems, computing networks and wireless systems.
The report stated that the wireless system segment were the most lucrative, holding the highest revenue share and accounting for more than fifty per cent of the overall market in 2013. “With the increase in number of products equipped with Wi-Fi technology, the demand for wireless technology enabled home automation solutions are observing substantial growth globally. Power-line systems is analysed to be the second fastest growing networking technology segment after wireless systems and is expected to attain a significant growth in the recent future,” the report stated.