The new study by global tech market advisory firm, ABI Research, finds that smart home devices revenues will reach $85 billion in 2020, just a 4% increase over 2019. Pre-pandemic 2020 smart home revenue growth was forecasted to hit 21% over 2019 or a $14.1 billion loss.
The latest forecast remains optimistic that even in the middle of the pandemic and countries announcing recessions, the consumer smart home spending will see some growth this year albeit much lower than was previously predicted.
“The pandemic is a double-edged sword for the smart home industry,” said Jonathan Collins, research director, Smart Home, ABI Research. “While the immediate impact may be negative, many of the long-term and structural changes to consumer lives initiated in 2020 will have a lasting positive impact that will help to drive adoption in many areas of the smart home space.”
By 2026, the smart home market will reach $317 billion, up 5% over pre-COVID-19 forecasts.
Much of the revenue lost in 2020 will be deferred to the next and following years, especially as smart home has cemented its value to vendors and consumers alike.
As new players come into the smart home space, spending will differ from pre-COVID investments in terms of the technologies supported. Lost 2020 shipments will impact the longevity and appeal of some approaches, such as traditional motion and contact sensors. Instead, these capabilities will be adopted as features within video camera monitoring, or technologies such as Wi-Fi Motion sensing from companies like Cognitive Systems and made available through support in broadband routers.
New and existing smart home vendors that are set to use new ways to bring smart home functionality at lower price points or with less hardware.
“COVID-19 may have impacted smart home revenues this year, but in the long term, it will also help draw investment, drive greater adoption, and disrupt smart home technology integration,” said Collins.