ABI Research study reports smart home market is set to hit $85 billion by 2021, an increase of 4%. COVID-19 cut growth forecast by 17%
Despite the coronavirus pandemic’s impact around the world, consumer smart home spending will still grow in 2020. However, spending will be well below of pre-COVID-19 expectations. A new study from global tech market advisory firm, ABI Research, finds that smart home revenues will reach $85 billion in 2020, just a 4% increase over 2019. Pre-pandemic 2020 revenue growth was forecast to hit 21% over 2019 – a $14.1 billion loss.
Economic uncertainty, consumer spend constraint, restricted physical retail opportunities, installation restrictions, disrupted manufacturing, and distribution all have curbed spending in the category, but the study finds that the spending shortfall is temporary.
“The pandemic is a double-edged sword for the smart home industry,” says Jonathan Collins, smart home research director at 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.”
As restrictions and drags on home automation shipments recede, a greater momentum behind support across a range of devices and systems will push annual industry revenue higher. By 2026, the 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 the home automation market has cemented its value to vendors and consumers alike.
“Smart home has an increasingly valuable role to play in consumers lives and spending habits. Amazon’s Alexa platform, for example, eases consumer spending through Amazon’s own stores by supporting the entire process from shopping list creation to delivery management. This highlights the trajectory for smart home to increasingly shape and drive consumer spending.