Research firms across all industries have had to adjust their predictions and estimates to accommodate the impact of COVID-19. For example, economic uncertainty, consumer spending constraints, restricted physical retail opportunities, installation restrictions, disrupted manufacturing, and distribution all have curbed smart home spending, reports ABI Research.
Consumer smart home spending will still grow in 2020 but well below pre-COVID-19 expectations. Smart-home revenues will reach $85 billion in 2020, just a 4% increase over 2019 while their pre-pandemic forecast for 2020 was 21% over 2019. The difference represents a $14.1 billion loss.
ABI believes that many of the long-term and structural changes to consumer lives initiated in 2020 will have a lasting positive impact that will help to drive adoption in many areas of the smart home. As restrictions and slowly of smart home shipments recede, a smart-home support across a range of devices and systems will push annual smart home revenue higher. By 2026, the smart home market will reach $317 billion, up 5% over pre-COVID-19 forecasts.
Much of the revenue lost in 2020 will be deferred to the next and following years, especially as the concept of the smart home has increased its value to vendors and consumers alike. Amazon’s Alexa platform, for example, eases consumer spending through Amazon’s own stores by supporting the entire process from shopping list creation to delivery management. This highlights the direction to increasingly shape and drive consumer spending.
As new players come into the smart-home space, spending will differ from pre-COVID investments in terms of the technologies supported. Lost 2020 shipments will impact the longevity and appeal of some approaches, such as traditional motion and contact sensors. Instead, these capabilities will be adopted as features within video camera monitoring, or technologies such as Wi-Fi Motion sensing from companies like Cognitive Systems and made available through support in broadband routers.
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