Smart home service revenues grew during 2022, but there is clear disconnect between smart home adoption and the immediate value to service providers, finds the latest study from ABI Research, a global technology intelligence firm. Total smart home services revenue for 2022 reached US$32.7 billion, up 2% over 2021, well below the more than 20% growth rate in the penetration of smart home capabilities in homes around the world over the same period.
Smart home services encompass whole home system design, installation, and management down to extended online storage for video from a home camera. It is a market that has competes with free offerings delivered and underwritten by some of the largest technology players in the world, including Amazon, Apple, Google, and Samsung.
Service revenue opportunity is limited by free or freemium services typically tied to the price of smart home hardware, rather than a separate services revenue stream. However, there remains strong potential for those smart home providers able to show real value in their subscription services over and above what can be gained in the freemium market. “Home security is an application that has shown resilience during earlier recessions. Those smart home services players with security integrations table to deliver peace of mind as well as whole home functionality, are well placed to defend and even grow their subscription capabilities – even in a tight consumer spending market,” says Jonathan Collins, Smart Homes and Buildings Research Director at ABI Research.
Security is not the only opportunity. Energy management, in a time of rising energy costs and concern especially in Europe, is another area where smart home players can stress the potential to ease consumer utility bills. “However, players must ensure their systems continue to evolve to deliver the functionality, security, privacy or integrations with a host of applications that will support subscription spending,” says Collins.
These findings are from ABI Research’s Smart Home Services market data report. This report is part of the company’s Smart Homes & Buildings research service, which includes research, data, and analyst insights. Based on extensive primary interviews, Market Data reports present in-depth analysis on key market trends and factors for a specific technology.