Smart Thermostat Market to Reach $2.99 Billion by 2022
NEW YORK — The global smart thermostat market is forecast to reach $2.99 billion by 2022, according to a study conducted by Grand View Research Inc. These thermostats enable users to remotely control their heating and air conditioning systems through wireless connectivity and mobile apps. Smart thermostats form an integral part of smart homes and have gained high traction in developed regions such as North America and Europe. The industry is anticipated to witness a high adoption of these thermostats as they display energy consumption level in real-time and are capable of adjusting to ambient conditions automatically. These devices can be connected to the internet and offer analytics and performance measurement tools through web-based portals. They are usually an integral part of the home automation ecosystem.
Energy utility retailers play a vital role in promoting the adoption of these devices in households. Many utilities offer these products as a part of their home energy management schemes. The involvement of energy retailers amplifies the potential for smart thermostat industry growth. Additionally, the proliferation of mobile phones and their convergence with thermostats make these products much more attractive for end-users.
The growing penetration of smartphones, rising per unit energy costs, the need for effective energy management solutions, and the favorable regulatory scenario are expected to propel market growth over the coming years. The increased penetration of Near Field Communication (NFC) and ZigBee home automation devices is further expected to augment demand. However, the high cost of the devices and the associated data security concerns may restrain the growth prospects of smart thermostats.
The market primarily includes devices based on connectivity technologies such as Wi-Fi, ZigBee, and other technologies including NFC, Bluetooth, and Ethernet. ZigBee-enabled devices are expected to gain a significant share with the increasing consumers' shift toward home automation devices.
In terms of revenue, North America and Europe accounted for about 90 percent of the overall market share in 2015 owing to the high demand for such devices in the region and favorable government mandates. The surge in construction activity and growing popularity of smart homes is expected to spur market demand.
Key players, including Honeywell International Inc., Nest Labs Inc. (Google), and ecobee accounted for over 40 percent of the overall market share in 2015. Original equipment manufacturers have been focusing on the development of new products as well as upgrading the existing product portfolio. Strategic agreements and collaborations have been pursued to gain competitive advantage.
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