Competition prevailing in the global smart home as a service market is considerably high on account of the presence of extremely innovative companies. The absence of standard connectivity platform and existing interoperability issues have intensified the competition among market players further. Considering the scenario, companies are trying to establish their platform as the benchmark, which in turn is giving impetus to the buyers’ bargaining power, finds Transparency Market Research (TMR) in a new study. Vivint, Inc., The ADT Corporation, and AT&T Inc., are some of the leading market players. Strategies adopted by these companies have profound impact on the overall market.
The market players are reeling under the threat of new entrants. As an outcome of the fast proliferating IoT services and incremental ARPU, the market is gaining significant traction from new players. Besides this, considerable investment in CAPEX and IT infrastructure has raised barriers to the entry of new players. The forthcoming years will therefore make competition fiercer in the global smart home as a service market.
TMR has projected the global smart home as a service market to grow at an exponential CAGR of 18.1% between 2017 and 2025. At this, the market will reach a valuation of US$10.9 bn by the end of 2025, from US$2.46 bn in 2016. Based on service, the global smart home as a service market can be bifurcated into managed services and integrated services. Of these, the integrated services segment emerged dominant with an estimated share of 63.6% in 2017. Regionally, North America led the overall market. Its share by the end of 2017 is forecast to reach 45.1%.
Demand for Better Security to Boost Deployment of Smart Home Solutions
As the household sector look for advanced technologies of ensuring better security, it is expected to bolster opportunities for the market. The recent technologies have provided smart home as a service with additional features such as live video surveillance, instant updates, and intrusion alert, which were not present in its traditional counterpart. This driver is forecast to give market considerable boost in the coming years.
In addition, the increasing demand for entertainment content will create lucrative market opportunities. Smart homes enable users to control their entertainment device and other household appliances remotely. This not only offers convenience but increases the overall entertainment quotient. Spurred by this, the demand for smart home as a service is expected to rise further in the coming years.
These solutions have proven ideal for energy management in the household sector. “Smart homes can help customers enjoy benefits of long-term cost savings by curbing their energy consumption,” said a lead TMR analyst. Despite the high cost of smart home products, the potential cost savings they offer is a crucial factor fuelling their demand globally.
Persistent Privacy Concerns Could Limit Growth
On the downside, the increased cost of smart home products is a major restraint for the market players. Moreover, the cost of upgrading these technologies is high as well, which is inhibiting the market’s trajectory especially across emerging nations. Also, privacy concerns and possibility of misusing the technology are not completely dealt away with. These concerns make users skeptical about installing smart home solutions, thereby negatively impacting the overall market.
Nevertheless, with the birthing of novel connectivity standards and influencing eco-systems. The smart home as a service market is also expected to gain from partnerships between insurance and tech companies in the near future.
This review is based on a TMR report, titled “Smart Home as a Service Market (Service - Managed and Integrated; Solution - Security and Access, Lighting and Window, Audio-Visual and Entertainment, Energy Management and Climate, and Integrated) - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2017 - 2025.”
The report segments the global smart home as a service market as:
Global Smart Home as a Service Market, By Service
- Managed Services
- Integrated Services
Global Smart Home as a Service Market, By Solution
- Security and Access
- Lighting and Window
- Audio-Visual and Entertainment
- Energy Management and Climate
- Integrated Solutions
Global Smart Home as a Service Market, By Geography
- North America
- The U.S.
- Rest of North America
- The U.K
- Rest of Europe
- Asia Pacific (APAC)
- Rest of APAC
- Middle East and Africa (MEA)
- Saudi Arabia
- Rest of MEA
- South America
- Rest of South America