Americans will continue to buy smart-home technology throughout 2020, but that spending will be exponentially less than was anticipated prior to the coronavirus pandemic.
A new study from ABI Research—a global tech market advisory firm—finds that smart home revenues in the United States will reach $85 billion in 2020, just a 4% increase over 2019. Pre-pandemic 2020 smart home revenue growth was forecasted to hit 21% over 2019, so that makes a $14.1 billion difference.
Economic uncertainty, consumer spending constraints, restricted physical retail opportunities, installation restrictions, disrupted manufacturing and distribution all have contributed to the smart-home-spending curb, said researchers.
Additionally, the study finds that the spending shortfall is temporary.
"The pandemic is a double-edged sword for the smart home industry," says Jonathan Collins, Smart Home Research Director at ABI Research.
"While the immediate impact may be negative, 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 space."
As restrictions and drags on smart home shipments recede, a greater momentum behind smart home support across a range of devices and systems should push annual smart home revenue higher. By 2026, the smart home market is expected to reach $317 billion, up 5% over pre-COVID forecasts.
Much of the revenue lost in 2020 will be deferred to the next and following years, according to the study.
Of course some technology will be left behind as time passes. Traditional motion and contact sensors, for example, might have missed out, as these capabilities are adopted as features within video camera monitoring or wi-fi motion sensors.
The market will favor new and existing smart home vendors set to use new ways to bring smart home functionality at lower price points or with less hardware, Collins said.
"COVID-19 may have impacted smart home revenues this year, but in the long term, it will also help draw investment, drive greater adoption, and disrupt smart home technology integration.”
Findings come from from ABI Research's Smart Home Systems Market Data report.