Solid Growth for Smart Home Automation Systems and Wi-Fi Deployments

April 30 2015, 04:00
Global revenues from smart-home automation systems will grow at a 21% CAGR between 2015 and 2020, according to ABI Research. North America will account for the lion’s share of the smart-home automation system revenues in 2020, contributing close to 46% globally, followed by Europe and Asia-Pacific.

“Smart home automation system revenue was primarily driven by mass consumer adoption of smart home security systems but the market is also witnessing strong revenue growth from the adoption of smart plugs and smoke and air quality monitors,” says Senior Analyst Adarsh Krishnan.

Regional differences are also reflected in device adoption. In 2014, North America and Western Europe witnessed increased adoption of security cameras, especially those with embedded motion sensors which were used not only for home security but also indoor activity tracking. In China, due to increasing concern about air quality, environmental sensors are gaining popularity. To augment growing domestic demand, in 2014, Alibaba, Xiaomi, Tencent, and Baidu announced their entry into the smart home market with air quality monitors.

With regard to wireless protocol adoption, proprietary wireless technologies from United Technologies, Honeywell, and Bosch Security — operating in 433 MHz and 900 MHz spectrum bands —continue to dominate in low-cost battery-operated devices including contact sensors and motion sensors. “Higher quality of service assurance and longer battery life are primary drivers for the continued adoption of proprietary technologies in smart home security,” says Principle Analyst Jonathan Collins.

Low power mesh networking wireless technologies Z-Wave and ZigBee also continued increased adoption in the smart home market. Sigma Designs’ Z-Wave is embedded in more than 1,000 interoperable devices while ZigBee’s latest 3.0 protocol will help drive its growth as it addresses many of the earlier interoperability issues.

These findings are part of ABI Research’s Smart Home Market Research which examines the market for home energy management, connected appliances, home security management, home healthcare, entertainment, and lighting control.

802.11ac Wi-Fi to Accelerate in 2015
The worldwide consumer Wi-Fi equipment market increased 5% in 2014, surpassing 166.1 million unit shipments. “Shipments of devices which support the 802.11ac standard grew significantly in 2014, representing more than 11% of total access point shipments,” says Jake Saunders, VP and Practice Director, ABI Research.

Since 802.11ac device shipments started to accelerate, the market share of devices with older generation Wi-Fi standards has started to decline. “In 2014, total shipments of consumer Wi-Fi devices with the 802.11n standard declined 3% from 2013. New generation 802.11ac products are expected to gain market share in the years to come. ABI Research expects that nearly 71 million 802.11ac access points will be shipped in 2015,” adds Khin Sandi Lynn, Industry Analyst.

The next Wi-Fi standard likely to enter the market is 802.11ad which can provide up to 7 Gbps. Leading Wi-Fi chipset manufacturer, Qualcomm, has recently demonstrated its newer Wi-Fi solutions which support tri-band, 802.11ad (60 GHz), and 802.11ac (5 GHz and 2.4 GHz). According to Qualcomm, the tri-band access point is likely to be shipped in 2H 2015.

In the enterprise Wi-Fi market, 10.5 million access points were shipped in 2014, an 11% increase from 2013. The enterprise class Wi-Fi access point market is expected to surpass 19.4 million unit shipments in 2020. Consumer Wi-Fi devices shipments are expected to reach 219 million in 2020 with a faster growth in residential gateway shipments compared to access points and Wi-Fi routers. Total consumer Wi-Fi equipment is expected to generate US$13.5 billion in 2020.

ABI Research’s study on Wi-Fi Customer Premise Equipment covers the worldwide consumer and enterprise WLAN equipment market. The report tracks equipment by product type, wireless protocol, and geography. The report contains market shares of leading WLAN equipment manufacturers worldwide based on quarterly shipment data and forecasts.

These findings are part of ABI Research’s Broadband CPE and Wi-Fi Market Research.
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