Home Automation Market to Top $100 Billion by 2020

The report predicted the use of wearable devices to passively supply data to control smart home devices will emerge as a key use case towards 2020.

smart homes and juniper

Consumer spending on smart home services, including entertainment, health, energy and home automation will reach $100 billion by 2020, well over twice the estimated spending for this year, at $43 billion, according to a Juniper Research report.

The report noted the market will continue to be characterized by high prices and a low value in connectivity, and consequently, while Samsung expects 100 percent of its portfolio to be connectable by 2020, consumers actually using these features are forecast to remain relatively low.

"Samsung is fairly unique in that it has a diverse portfolio of consumer electronics and appliance products," research author Steffen Sorrell, a senior analyst with Juniper, told eWEEK. "Therefore, having a connected everything strategy makes sense for it, even if SmartThings-Samsung Smart Home doesn’t take off. It’s hardware, and potential service revenues when connectivity is made use of, will benefit from smart home take-up regardless."

Sorrell noted that for others like Alphabet/Google, the every screen, every device strategy is important to diversify the business away from pure ad revenue.

"For Apple it’s about recognition that awareness and demand is gathering pace--they need their solution out there or they’ll get left behind," he said.

The report predicted the use of wearable devices to passively supply 'quantified self' data to control smart home devices is likely to emerge as a key use case towards 2020.

In addition, the report forecast voice control and other 'hands-free' mechanisms would become the principle interface between users and devices in the smart home.

The research forecasts that the number of connected appliances in smart homes will rise to more than 20 million by 2020.

Emerging smart home segments, such as home automation, are expected to begin catching up, driven by falling hardware costs and increased consumer awareness.

"Home automation is a bit of a chicken-and-egg situation. To demonstrate value, in this case products working together, you need to add more devices and sensors into the home," Sorrell said. "But how do you convince the consumer to buy into that? That’s where we believe retail will play a crucial role; Target’s Open House is a good example of how to drive awareness."

He noted that meanwhile, each regional market is unique, and none of the commonly cited major players currently address HomeMatic for example, which is a popular smart home system in Germany.

"Then there are differences in the drivers behind smart home uptake--security, home comfort and so on," he said. "Players will the biggest reach will need to look at those elements and adjust their offering accordingly."