The smart thermostat market was valued at USD 689.8 million, in 2018, and is expected to reach a value of USD 2322.2 million by 2024, at a CAGR of 23.1% during the forecast period (2019
NEW YORK, June 21, 2019 /PRNewswire/ -- Market Overview
The smart thermostat market was valued at USD 689.8 million, in 2018, and is expected to reach a value of USD 2322.2 million by 2024, at a CAGR of 23.1% during the forecast period (2019 - 2024). Lighting and other household appliances consume a considerable amount of energy and presently there is a dire need to use these energy resources efficiently. Therefore, governments are emphasizing on the use of smart devices in homes.
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- The main factors driving the need for smart thermostat are the convenience, energy conservation, energy tracking, and need for an increase in potential savings. For example, Ecobee claims its gear can save an average of 23 per cent off bills whereas Nest claims its systems can save between 10 and 12 per cent on heating and 15 per cent on cooling.
- The BYOT (Bring-your-own-Technology) trend is expected to stimulate the growth of the market over the forecast period. Consumers have independently begun purchasing smart Wi-Fi enabled thermostats capable of receiving demand response control signals. Additionally, with a wi-fi connection and smart thermostats, virtual assistants, like Amazon Alexa, or Google Assistant, are increasingly being used to control and monitor the home temperature, program schedules, or crank up the A/C.
- It was estimated that around 60.5 million Americans used virtual personal assistants and voice-controlled speakers at least once a month, according to an investment firm Cowen & Co. Also, in 2017, 24% of Americans used Amazon Echo and 31% used Google Home for home control settings following music, shopping, and requesting information applications. With the increase in the use of virtual assistants in home control, the forecast period is likely to witness the exponential adoption of smart thermostats.
Scope of the Report
These thermostats are termed as 'smart', due to the inherent capabilities of being able to communicate with IoT devices within a smart building, ability to learn with AI capabilities, active geo-fencing features, reduce energy consumption, and ability to communicate with emerging virtual private assistants. Smart thermostats refer to the devices that allow remote connectivity and can be managed through a handheld device, finding its applications in residential sectors. These are the devices that are connected and allow remote connectivity in the consumer sector.
Key Market Trends
Increasing Internet Penetration and Connected Devices are Driving the Market Growth
- Increasing internet penetration, coupled with the increased usage of smartphones and other mobile devices has resulted in an increased spread of connectivity, owing to the rise in internet-connected devices.
- Owing to technological advancements, the appliances in residential buildings, such as washing machines, heating, and cooling equipment, and refrigerators, are increasingly going smart. This means that they can be connected to the internet.
- Due to this, smart thermostats (that also have the ability to be connected to the internet) are increasingly being adopted. This is because they enable users to adjust heating settings from other internet-connected devices, such as smartphones or laptops, which allows them to control the thermostat remotely. This ease of use is necessary for ensuring energy savings.
- Additionally, M2M is expected to take home-based IoT to the next level. Manufacturers, like LG and Samsung, are already slowly unveiling smart home appliances to help ensure a higher quality of life for occupants.
- For instance, an M2M-capable washing machine could send alerts to the owners' smart devices once it finishes washing or drying, and a smart refrigerator could automatically order groceries from Amazon once its inventory is depleted.
- The increasing popularity of these connected devices is expected to lead to an increased need for control, thereby driving the market growth.
Asia-Pacific to Witness a Significant Growth Rate Over the Forecast Period
- Consumers are adopting the smart assistant devices, such as Amazon Echo and Google Home for many purposes, with almost one-third of people using it as an information provider responding to questions, and over 40% as an audio speaker for listening to streaming music. The smart thermostats find application among the smart assistants, thereby, fueling its demand across the residential sector across the region.
- Moreover, the Chinese government launched the 'New-Type Urbanization Plan,' focusing primarily on new-type, smart, and humanities city construction from 2014 - 2020.
- Besides, in India, the IGBC (Indian Green Building Council) Green Homes is the first rating program that has been developed, exclusively for the residential sector, whose objective is to facilitate the effective use of site resources, water conservation, energy efficiency, handling of household waste, optimum material utilization, and design for healthy, smart homes.
- This will encourage industry players to invest in smart home services, thus, having a positive impact on the smart thermostat market growth.
Competitive Landscape
The smart thermostat market is highly fragmented due to the government's support and promotion for the uptake of smart devices in residential buildings. Many companies are also entering into the market, making it competitive. Some of the key players in the market include Alphabet Inc. (Nest Labs - Google), Honeywell International Inc., ecobee, Schneider Electric SE, and Lennox International Inc. Some recent developments in the market include:
- January 2019 - Honeywell International Inc. introduced its latest T-series thermostats T9 and T10 feature wireless sensors that measure temperature and humidity on a room-by-room basis. The thermostats will be compatible with HomeKit later, allowing them to be controlled in the Home app on iOS and macOS and with Siri. The smart room sensors offer a few other features, including people detection that ensures occupied rooms are at a desirable temperature and a 200-foot range to help deliver whole-home comfort.
- October 2018 - Nest Labs announced the expansion of its thermostat line with the introduction of the nest thermostat E in Europe. With a fresh look and the same great features found in the nest learning thermostat, the nest thermostat E can be controlled from anywhere with a phone and comes with a pre-set schedule so users can start saving energy right out of the box.
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