American consulting firm A.T. Kearney has published a report forecasting that the Asian smart home market will reach US$116 billion in sales by 2030, accounting for 30% of the global share.
The report also predicts that the Asia smart home market will surpass Europe by 2027 and North America by 2030.
Two market forces driving the growth are China and Japan. While Japan plays an initial lead in the market, China is expected to take over by 2020, according to the report. In addition, other highly-connected countries such as Singapore, South Korea and Taiwan will play key roles in the market.
The rising household income will be the main reason for China to take over the smart home market. The report predicts that by 2030, 40 million Chinese households will have annual income exceeding US$35,000.
In India and Southeast Asia (excluding Singapore), the report estimates the adoption will remain low due to the low percentage of high-income households and the lack of big domestic players in the smart home industry.
The smart home penetration rates in countries such as South Korea, Taiwan and Singapore are expected to be high for their high percentage of high-income households and great data connectivity.
Four market factors will accelerate the market expansion in Asia, the report states. They are more connected homes and the development of artificial intelligence, interoperability between products from various manufacturers, a better product availability and lower cost, and new monetization models such as advertisement.
The firm also forecast that the global smart home market will reach US$50 billion by 2020 and go over US$400 billion by 2030, up from US$15 billion in 2015. The health and wellness management applications will see the highest growth of 31% per year between 2015 and 2030, topping at US$67.1 billion. The biggest sector is the convenience and comfort application, such as washing machines and refrigerators, reaching US$188.4 billion by 2030.