Smart Home Market Growth in Europe and North America

The smart home market in Europe and North America is poised for steady growth leading up to 2029, as indicated by the latest findings from the “Smart Homes and Home Automation” report by Berg Insight. By the conclusion of 2024, an estimated 139 million homes in both regions had been equipped with at least one smart home system, setting the stage for further expansion in the coming years.

For readers of eeNews Europe, this development holds significance due to the increasing adoption of connected devices, platforms, and standards. This trend is likely to influence the demand for wireless modules, gateways, sensors, and control ICs integrated into next-generation residential systems. The data also provides engineers and OEMs with valuable insights for assessing which product categories and connectivity technologies are expected to experience the most significant traction in the market.

Adoption on the Rise in Europe and North America

According to Berg Insight, a smart home system is defined as one that can be remotely accessed through a smartphone app or web portal, encompassing areas such as security, energy management, lighting, AV, appliances, service robotics, and irrigation. In North America, the installed base of smart home systems reached approximately 305.8 million by the end of 2024, representing 66.7 million smart homes and a household penetration rate of around 44.8 percent. Revenues from hardware and services in the region are expected to increase from US$52.4 billion in 2024 to US$81.8 billion in 2029, with a compound annual growth rate (CAGR) of 9.3 percent.

Europe is steadily catching up in terms of volume, although its penetration still lags behind North America. The EU27+3 countries accounted for 240.1 million smart home systems and approximately 72.8 million smart homes in 2024, equivalent to 30.7 percent of households. European revenues in 2024 amounted to €39.3 billion and are projected to rise to €68.3 billion by 2029, reflecting an 11.7 percent CAGR. Overall, Berg Insight anticipates that the number of smart homes in Europe will reach 102.8 million by the end of the forecast period.

Competition Among Vendors: From Point Solutions to Whole-Home Platforms

Berg Insight observes that many consumers enter the smart home market through single-function point products like thermostats, smart plugs, connected cameras, smart speakers, or floor-cleaning robots. These products are offered by established OEMs – including lighting, HVAC, and appliance brands – as well as by specialized entrants focusing on connected devices.

On the comprehensive whole-home front, traditional home automation experts are increasingly competing with communication and security service providers that bundle professionally monitored alarm services with smart home functionalities. This dynamic presents semiconductor vendors and device manufacturers with an expanded market opportunity, ranging from cost-effective radio-equipped sensors to premium gateways and controllers capable of integrating multiple wireless standards.

Driving the Next Phase: Standards, AI, and Energy Efficiency

The report also sheds light on technology and business trends that could reshape the smart home landscape in the next five years. Key areas of focus include the influence of Matter and Thread on interoperability, the potential impact of AI in enhancing voice assistants and automation, and the utilization of connectivity for more intelligent energy management functions amidst fluctuating energy prices. Other notable themes encompass the growing use of cellular IoT in home security and the emergence of paid digital services layered atop connected devices.