Berg Insight estimates that revenues from shipments of home automation systems in Europe and North America will grow at a compound annual growth rate of 19.8 percent from US$ 36.7 billion in 2018 to US$ 90.6 billion in 2023.
According to this research report, the number of smart homes in Europe and North America reached 64 million in 2018. The most advanced smart home market is North America, having an installed base of 33.8 million smart homes at the end of the year. This represents a penetration of 24 percent. Between 2017 and 2018, the market grew by 38.6 percent year-on-year. The strong market growth is expected to continue in the next five years.
By 2023, the analyst estimates that more than 60.3 million homes in North America will be smart, meaning 41 percent of all homes in the region. The European market is still behind North American, in terms of market penetration. There were a total of 30.5 million smart homes in Europe at the end of 2018. The installed base in the region is forecasted to grow to 83.2 million homes at the end of 2023, representing a market penetration of 35 percent.
The most popular products on the smart home market include smart thermostats, smart light bulbs, smart security cameras, smart air conditioners, smart door locks, smart plugs, and smart speakers. The market for smart thermostats is led by companies such as Ecobee, Nest and Resideo.
Berg Insight estimates that the installed base of smart thermostats amounted to 18.9 million units in North America and 6.6 million units in Europe at the end of 2018. Signify is the clear market leader in the market for smart light bulbs and other connected lighting products. Additional vendors in the segment include Ledvance, LIFX, Sengled, Merkury Innovations, and IKEA.
The installed base of connected light points at the end of 2018 amounted to 25.2 million units in North America and 22.4 million units in Europe. Smart speakers with integrated voice assistants have quickly become a popular smart home product. Amazon and Google hold a near-duopoly in the smart speaker market with an estimated combined market share of around 90 percent in North America and Europe.
At the end of 2018, the installed base of voice-controlled smart speakers amounted to around 100 million units in North America and over 21 million units in Europe. The market for whole-home systems is served by traditional home automation specialists, home security providers, telecom operators, and DIY solution providers. On the North American market, interactive home security systems have emerged as the most common type of smart home systems, said Martin Backman, IoT Analyst.
This type of system represented 41 percent of the 13.3 million whole-home systems in the region at the end of 2018. The largest home security providers include ADT, Vivint, and Comcast. In Europe, traditional home automation systems and DIY solutions are more common as whole-home systems, continued Mr. Backman. eQ-3, Deutsche Telekom, Verisure, Centrica Hive, and Somfy are the largest vendors of whole-home systems in the region. The installed base of whole-home systems in Europe amounted to 6.8 million systems at the end of 2018.