Citing weak consumer demand and economic volatility, the International Data Corp. (IDC) saw a continued decline in smart home devices shipment in the first quarter of 2023. IDC expects the market to decline by 1.8% overall this year.
Based on IDC data, global shipments of smart home devices fell 5.6% year over year (YoY) to 186.0 million units. Smart speakers and networked video entertainment devices faced the steepest declines in the first quarter, down 15.4% and 7.8%, respectively compared to the prior year.
“The worldwide smart home market is witnessing uneven growth as some regions fare better than others,” said Adam Wright, research manager of Smart Home and Office Devices at IDC.
Market rebound in 2024
But while the declines are worrisome, the market research firm sees a return to growth in 2024 and continue through 2027 with device volumes reaching 1.1 billion shipments in 2027.
“While there have been pockets of growth, the market has largely stalled due to lack of meaningful upgrades between one generation of devices and the next,” said Jitesh Ubrani, research manager for IDC’s Mobility and Consumer Device Trackers. “Even the launch of the Matter standard has not been enough to spur demand despite offering some ease of use.”
Apart from smart speakers and networked video entertainment devices, many other smart home categories such as lighting, thermostats, and home monitoring and security devices are expected to witness high growth over the next five years in part due to rising consumer awareness of smart home devices in many parts of the world and the rise of emerging markets.