Global smart home market expected to fall $20B amid COVID-19 crisis
Asian market smart home revenue forecast falls 24.2 per cent
Amid the continued fallout of the coronavirus crisis, the global smart home market is expected to fall nearly $20 billion short of revenue expectations in 2020, according to Omdia.
The global smart home market will total $101.1 billion in 2020, down from Omdia’s previous forecast of $120.6 billion. Smart home device shipments are now projected to reach 603.5 million units in 2020, down from the earlier forecast of 693.8 million.
The smart home market consists of devices that have digital connectivity and act as part of a smart home, including appliances, security systems and climate and lighting control.
“Due to the vast number of products available, the smart-home market tends to be more resilient in the face of economic challenges like coronavirus compared to other, less-diversified industries,” said Blake Kozak, principal analyst at Omdia. “Nevertheless, the smart home market is expected to undergo a correction during 2020, where growth will slow for most countries.”
Asia is forecast to see the biggest slowdown in 2020, with a downward revenue revision equating to $7.8 billion and 66.2 million fewer shipments than originally forecast.
As the Asia region begins to recover from the coronavirus pandemic, production should ramp back up. However, depleted inventories could put added strain on potentially lower demand to start the second quarter of 2020.
In the Americas, the smart home device revenue outlook has been reduced by 10.6 per cent. Device growth in the U.S. is forecast to remain stronger than other countries. Growth projections could be further reduced if stock markets do not rebound or if the virus spreads to influence U.S. supply chains.
In some regions of the U.S. and in other countries with widespread coronavirus cases, the number of professional smart home installations could be reduced. Although demand may not slow for some channels, the capability to either ship and deliver products or to install devices could be drastically diminished. This has already occurred in China, where sites such as Alibaba are taking orders for smart speakers, but delivery has been delayed.
Overall, despite the diversity of smart home ecosystems, supply chain challenges combined with a restrained consumer market and installation and service delays could further slow adoption of smart home technology in 2020.