Home Automation System Market

Global Home Automation System Market Size (2023 to 2028)

The global home automation system market size is expected to be worth USD 110.26 Billion in 2023. It is expected to grow at a CAGR of 3.46% from 2023 to 2028 and reach a value of USD 130.70 Billion by 2028.

Global Home Automation System Market Drivers:

Factors such as low insurance premiums, command control over the appliances of the house, and energy conservation are majorly contributing to the growth of the home automation system market. People’s lives and in-home insurance is one of the most highly paid premiums. Low insurance premiums are one the main reasons for the customers' interest in having their houses automated because home automation is the part where not only does life become easy, but it also increases the security systems of the house. An increase in security ensures a safe lifestyle. Recent reports state that Home Automation decreases the cost of homeowners' insurance premiums by 20%. Home automation system gives the customers control over the various appliances all over the house which helps them control the devices using the wireless combination or through the sensors that are pre-installed in them which makes them work freely in the house. Moreover, Home automation saves the wastage of an ample amount of electrical energy in the household. Therefore, these features will further improve the global home automation system market growth from 2023 to 2028.

Growing consumer desire for energy-efficient systems, rising demand for IoT devices, convenience, usability, technological advancements, and a rise in security risks are propelling the home automation system market. Demand for automated homes is anticipated to be further elevated by rising millennial home ownership and rising disposable income in industrialized economies. In addition, major companies are focusing on cutting-edge solutions that improve home management's effectiveness, which is creating a profitable environment for the adoption of home automation systems in the future.

AI and ML technologies are being incorporated into smart home devices to enhance automation and personalization as these devices become more sophisticated. Additionally, ML algorithms are employed to understand user preferences and adjust task automation. The growth of the home automation system market is further driven by the rising demand for energy-efficient solutions and the robust growth of the IoT market, fostering a favorable environment for sales. Combining Internet of Things devices such as security cameras and systems with home automation reduces human management by activating equipment. Users may schedule lighting and thermostats, save money on energy, heating, and cooling bills, and improve safety.

The high rate of urban house development in emerging economies will increase the need for better automation infrastructure. Therefore, the expansion of infrastructure could increase the demand in technologically advanced nations like China, Brazil, and India for smart lighting, smart locks, and smart HVAC controls. Because of this, purchasers who are willing to spend money on home automation systems would rather have their houses move-in ready. In other words, they would be more inclined to buy a house if smart home automation systems were already installed or, at the very least if wiring and communications were set up to allow for the installation of home automation systems.

Global Home Automation System Market Restraints:

The absence of pre-installed home automation systems and provisions for already constructed houses is limiting the growth of the home automation system market. Though they are ready to make the investment, buyers prefer that certain home automation systems be installed before they purchase. Home automation systems like audio and lighting controls are simple for users to install, but installing security and HVAC controls can be expensive. The rising concerns about home automation device security are one of the major challenges currently facing companies. The concern about the cybersecurity of several IoT-based home automation systems is restricting the demand for sensors, controllers, and actuators. This has a significant effect on consumers who purchase home security systems. Smart cameras and locks are two essential home automation devices, and their compromise makes a security breach more serious. Security issues in the product itself or an unsafe wireless connection linking the home automation devices might expose home automation to a breach of security.

Impact of COVID-19 on the home automation system market:

The COVID-19 had a significant impact on the home automation market. It slowed down the world economy, causing disruptions in development and supply chains. The residential construction and infrastructure industries were also slowed down, which negatively impacted the home automation business. As a result of this crisis, the working class delayed their purchases of home automation systems for their homes. The limitations placed on manufacturing facilities and logistics also had an impact on the supply of home automation goods. However, the accelerated digitization during the pandemic proved to be beneficial for the home automation market growth and expansion. The popularity of smart homes increased among younger and working people; because of this growth in smartphone and Internet of Things usage, the market share of home automation systems elevated.

REPORT COVERAGE:

This research report on the global home automation system market has been segmented and sub-segmented into the following categories.

Global Home Automation System Market - By Management:

• On-Premises
• Cloud-Based

Based on management, the on-premises segment captured 55% of the global market share in 2022 and is expected to grow considerably during the forecast period. The central control system is the main benefit of on-premises management systems. This allows users to use a single centralized system to access every smart gadget in their homes. While on-premises administration was the only option accessible for a long time, central control systems are excellent home automation devices. Most of the systems are used for entertainment, security, access control, and HVAC purposes.

Global Home Automation System Market - By Product:

• Lighting Control
• Security and Access Control
• HVAC Control
• Entertainment

Based on the product, the entertainment segment had the major share of the worldwide market in 2022 and the domination is likely to continue throughout the forecast period. Audio and video in the house can be controlled automatically or changed with the help of automated home audio and volume controllers. The market for entertainment controls has grown significantly after the introduction of voice-activated devices like Google Home and Amazon Echo. Also, it has a wide variety of commercial systems that can be bought, or they can have a system built from scratch or customized. Furthermore, smart controls are commonly utilized as standalone devices in houses, including smart meters, locks, smoke alarms, plugs, window blinds, and hubs.

Global Home Automation System Market - By Software and Algorithm:

• Behavioural
• Proactive

Based on software and algorithm, the proactive segment is expected to do well compared to the behavioral segment of the home automation system market. It provides the customers with information about energy consumption as well as a sense of accountability through proactive software and its algorithm. Also, more data can be stored by this system than by the behavioral system. It provides feedback to the end user about efficient energy use, appropriate behavior, and personal preferences. Furthermore, proactive solutions are more advantageous because they can make smart choices and take appropriate action on the consumer's behalf, apart from providing recommendation signals.

Global Home Automation System Market - By Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

The North American home automation system market is leading with a significant share. The demand for smart technologies in North America is driven by more people adopting cutting-edge technology like artificial intelligence and the Internet of things, growing tendencies toward smart cities, and more disposable income. Also, a number of startups, including Sense and CUJO AI, are also present in the area and are helping to drive the market for home automation technologies in North America. Due to the existence of established businesses, new competitors, and the high adoption rate of connection technologies, the United States commands a major share of the North American home automation system market.

Europe's home automation system market is anticipated to witness rapid growth during the forecast period. Germany dominates the region with the biggest share of the home automation system market because of the aging population, which led to a rise in the need for smart home equipment, the Internet of Things, 5G technology, and other factors. The European home automation system market is expanding due to rising internet access, energy-saving needs, smartphone proliferation, home monitoring, and increased safety, security, and convenience.

Asia Pacific home automation market is expected to have the fastest market growth rate during the forecast period. The strong economic expansion and boom in real estate and house building in these countries can be credited for the rapid growth in the APAC region. The local economy's growth and smart city development by China and India are expected to boost home automation adoption in this region.

The Latin American home automation market is projected to demonstrate healthy expansion in the coming years. The rise in smart appliances, enabling remote control via smartphones or tablets, and the integration of machine learning and artificial intelligence technologies are driving the demand for automation systems.

The Middle East and African home automation market will continue to grow at a steady CAGR during the forecast period. Governments, real estate developers, and consumers are recognizing the advantages of smart living, which is ultimately driving market innovation and rapid expansion in the region. Growing prominence to reduce energy expenses is driving a significant surge in the use of smart appliances like water heaters, dryers, lights, and bulbs.

KEY MARKET PLAYERS:

The Major players in the home automation system market are ABB Ltd, Johnson Controls International plc, Crestron Electronics, Siemens AG, Control4 Corporation, Schneider Electronics, Koninklijke Philips N.V