Smart home systems and services will ring up sales of $18 billion in the U.S. this year and could more than double to $39 billion by 2019, fueled by security and home control products, Strategy Analytics predicted in a report Thursday.
The opportunities in the sector are drawing in big consumer brands like Apple (NASDAQ:AAPL), Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Samsung.
Professionally installed control and entertainment systems are the largest segment of the market, with 48% of sales today and forecast to be 37% in five years, Strategy Analytics analyst William Ablondi told IBD. The market is increasingly moving from high-end, custom-installed systems to do-it-yourself and mainstream consumer products, he said.
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security systems and services are the second biggest slice of the smart home market, with 29% of sales now and estimated to reach 35% in 2019, he said.
Self-monitoring and control systems are the third biggest part of the market, with 13% of sales now and unchanged in the 2019 forecast.
ADT (NYSE:ADT) and Vivint currently lead the security service segment of the market, with each having more than 800,000 residential subscribers. Comcast’s (NASDAQ:CMCSA) Xfinity Home service and AT&T’s (NYSE:T) Digital Life service also are in the chase, Strategy Analytics said in a press release.
Lowe’s (NYSE:LOW) has a big lead on Home Depot (NYSE:HD) for the do-it-yourself customer with its Iris self-monitoring and control system. But Staples (NASDAQ:SPLS), Amazon.com (NASDAQ:AMZN) and others are selling Insteon devices, home automation networking technology that enables lights, thermostats, motion sensors and other appliances to interoperate through power lines.
Apple’s HomeKit software announced in June showed that the consumer electronics giant is interested in the smart home market as well.
Google signaled its desire to be “a disruptive force” in the market by acquiring Nest smart home devices and Dropcam security cameras, Ablondi said.
Separately, research firm Parks Associates on Thursday said nearly 4% of U.S. households will have a smart home controller by year’s end, rising to nearly 6% in 2015. Such devices can control lighting systems, garage door openers, networked security cameras and programmable thermostats.
“The majority of smart devices installed today were acquired as part of a security or home controls system deployed by providers such as ADT, Comcast or AT&T,” Parks Associates analyst Tom Kerber said in a press release. “However, consumers are starting to buy individual products such as smart programmable thermostats and smart smoke detectors in greater numbers and install them as stand-alone devices — but with the expectation that these new devices will interact with all existing and future devices in the home.”
On Wednesday, Microsoft selected 10 home-automation startups that it will support in an accelerator program it announced in June with American Family Insurance. More than 400 startups applied for the program, Steven Guggenheimer, a Microsoft corporate vice president, said in a blog post.