The smart home device industry is revved for growth now that the Matter standard has been embraced by Google, Amazon Alexa and others, but buyers are not there yet, according to the latest analysis.
In fact, global shipments of smart home devices continued to decline in the first quarter of 2023, dropping by 5.6% to 186 million units compared to a year earlier, IDC said Tuesday.
Part of the problem has been a lack of meaningful upgrades between one generation of devices and the next, said Jitesh Ubrani, research manager at IDC.
Even the launch of the Matter 1.0 standard last October “has not been enough to spur demand despite offering some ease of use,” he said in a statement.
The decline for smart home devices has followed a widespread decline for PCs, smartphones and other consumer products with weak consumer demand and economic volatility. Inflation is often cited as a primary cause for lowered demand.
Many Internet of Things vendors at last week’s Sensors Converge 2023 conference in Santa Clara, California, said they were expecting an upsurge in buyer interest, although many of those companies were focused on an industrial market where smart lighting and related technologies can result in significant energy savings over a period of years.
RELATED: Sensors Converge 2023 is a wrap: Where sensors & wireless & edge met
The IDC findings were not all bad, although the current slump is expected to last into 2024, IDC said.
The smart home market is expected to decline nearly 2% over all of 2023 when compared to 2022, with a return to growth later in 2024 that will continue through 2027. Shipments across all smart home products are expected to reach 857 million globally in 2023, then surge to $1.1 billion in 2027, a CAGR of 6%.
Smart home devices declined for the first time in 2022 by 2.6% compared to 2021, reaching 873 million units, IDC said in March.
In the first quarter, smart speakers decline 15% compared to year earlier, while networked video entertainment devices decline nearly 8%. IDC said lighting, thermostats, home monitoring and security devices will witness “high growth” over the next five years as consumer awareness improves.
The US has joined other mature markets in seeing underuse of smart home devices, IDC said.