- Omdia forecasts about 424m devices that could be Matter capable in 2023.
- Brands to produce devices that combine advanced features like facial recognition and video analytics with door locks and the inclusion of radar technology in smart speakers and thermostats.
- More brands will find themselves on the brink, like Insteon and Wink, threatening to leave millions of users with unusable paperweights.
The open-source standard – Matter – will have a positive impact on smart home adoption and sales next year after experiencing consecutive years of softening growth.
The impending release of the Matter standard, building upon Internet Protocol (IP), to create more connections between more objects, simplifies development for manufacturers and increases compatibility for consumers.
Research from Omdia attributes the downward trend to a combination of factors including wage stagnation, increased unemployment, and a large decline in projected retail sales, especially in 2022.
Strong growth, on par with pre-pandemic levels, is expected to return starting in 2023, driven by increased demand for energy management solutions.
However, Blake Kozak, Senior Principal Analyst at Omdia, said that the impact of Matter is expected to be more gradual than originally anticipated.
Exciting time
When considering the device types that will be part of Matter 1.0, Omdia forecasts there will be about 424 million devices that could be Matter capable, assuming 100 per cent of those devices shipped in 2023 are Matter compatible. This equates to about 44 per cent of global device shipments in 2023.
Considering devices like home appliances, he said that security cameras and robot vacuums, to name a few, won’t be part of the release of Matter 1.0, the initial impact will be slow, especially after considering that many brands will not have 100 per cent of their devices compatible with Matter.
“It is an exciting time for the smart home industry as brands rapidly innovate and produce devices that combine advanced features, like facial recognition and video analytics with door locks and the inclusion of radar technology in smart speakers and thermostats,” he said.
Brands are also making moves in terms of partnerships and acquisitions, like ADT acquiring Sunpro Solar and IOTAS. Advancements in connectivity standards like ultra-wideband, Thread and NB-IoT will also bring new use cases to the smart home market, improving both accuracy and distance.
The next few years, he said will also prove difficult for many brands as costs continue to rise.
Increased price pressure
“The price of services may increase (Wyze and Ring) as brands grapple with ongoing costs while one-off hardware sales face increased price pressure from low-cost brands (thermostats), meanwhile Matter’s impact on commoditisation has yet to be seen,” Kozak said.
Moreover, he said that more brands will find themselves on the brink, like Insteon and Wink, threatening to leave millions of users with unusable paperweights.
“Nonetheless, the smart home market has proven to be resilient, and the latest trends offer up ample opportunity for brands to focus and grow market share in the coming years,” Kozak said.
Smart speakers, with 195 million shipments, had the most global shipments in 2021, followed by lighting, plugs/switches and connected health devices.
The devices forecast to grow the fastest over the next five years include water leak sensors/shutoff valves, connected major home appliances, plugs/switches, air quality monitors and smart door locks, all projected to have an annual growth rate greater than 30 per cent from 2021 to 2026.
In terms of market share for unit shipments last year, Xiaomi was estimated to be the market leader, followed by Alibaba, Amazon, Google, and Baidu. All of the top-five brands specialise in smart speakers, while the next four brands, IKEA, Sengled, Ledvance and Signify, specialise mostly in lighting applications.
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