One million smart home appliances shipped globally in 2014, IHS reports.
If your home isn’t smart yet, just wait. That’s because intelligent household appliances — like your washing machine, air conditioner, dryer, stove and refrigerator — are set to multiply in the years to come, a new report from IHS suggests.
According to the firm, the global market for such goods is projected to grow at a five-year compound annual growth rate of 134%, bringing the total units shipped from less than one million in 2014 to more than 223 million shipped by 2020. Factor in smaller home machines, such as robotic vacuums, electronic toothbrushes and coffeemakers, and the total number of smart devices skyrockets to 700 million in that same timeframe.
Beyond that, IHS lists three key factors that will help facilitate smart appliance adoption: energy management initiatives, standards for interoperability, and other marketplace dynamics including pricing, retail environment and competitive landscape.
Already today, appliance makers are shifting their focus from low-profit, low-growth “dumb” products toward emerging high-margin, revenue-oriented connected gadgets. Take for instance, Samsung and LG, who are vying for first-mover advantage — a term that refers to the advantage gained by the initial significant occupant of a market segment — by redirecting their efforts from mobile devices, TVs and other saturated areas to smart home equipment.
“Electronics giants could also benefit from the convergence of mobile devices and TVs with their home appliance business lines, as all of these devices can integrate well with smart technologies,” says Dinesh Kithany, senior analyst of home appliances.
Over the course of the next two to three years, the smart home market is expected to consolidate, and by 2018, IHS believes that there will be only a couple of connectivity platforms, operating systems and a small number of technology-oriented appliance companies dominating the market. One great example of this is the harmonization of ZigBee and Thread, both of which have decided to play nice to simplify home control.
“Consolidation will drive consumers toward earlier adoption of smart home technology, with growth similar to what the mobile phone industry experienced just a few years ago,” Kithany adds.
Want to read more? Check out IHS’ entire report here.