Connected Homes Market | Industry Analysis Report, 2034

Connected Homes Market Overview

The Connected Homes Market size was valued at USD 91334.96 million in 2024 and is expected to reach USD 138983.2 million by 2033, growing at a CAGR of 4.8% from 2025 to 2033.

The global connected homes market is currently measured at approximately 91 billion USD in 2024, with over 95 billion USD recorded for 2025 and projected upward toward 138 billion USD by 2033. This estimate incorporates more than 892 million smart home devices shipped worldwide in 2024, reflecting flat volume in shipments near 0.6 percent but representing nearly 18.8 billion connected IoT devices globally. Within the U.S. smart home space, about 154.4 billion USD was tied up in consumer spending for 2024, with 60.4 million smart homes recorded in the U.S. alone.

Voice-controlled systems are in 50 percent of U.S. households, while smart appliances exist in 41 percent and smart lighting in 36 percent. Globally, 127.7 billion USD was tied to the smart home market in 2024, with 45 percent of U.S. internet households owning at least one such device and 18 percent of homes using six or more connected products. AI‑enabled homes now include smart switches, thermostats, locks, cameras, entertainment devices, and energy management tools. In India, 4.53 billion USD worth of connected home systems were active in 2024, supported by nearly 17 billion IoT endpoints worldwide. The region led Asia‑Pacific adoption at 17.4 percent household rates in 2024, signaling a broad rise in deployment of intelligent home devices.

Key Findings

Top Driver reason: Integration of AI‑powered efficiency, with 77 percent of owners reporting improved quality of life, and smart device installs increasing 48 percent in 2024.

Top Country/Region: United States, holding 36.38 billion USD of the smart home market in 2024 and accounting for 45 percent of U.S. internet households equipped with smart tech.
Top Segment: Home security, encompassing cameras, locks, and sensors, makes up about 30 percent of the market, with North America and Europe seeing 20 percent annual adoption growth.

Connected Homes Market Trends

The connected homes market is increasingly driven by security systems, which formed 30 percent of overall demand in 2024. Smart cameras, doorbells, and locks account for the bulk of these systems, while smart lighting systems represented 26 percent of devices and security cameras 23 percent, as of early 2025. In the U.S., smart TV usage reached 57 percent, while 29 percent of households used smart cooking appliances and 28 percent smart kitchen systems in 2022. Voice-control prevalence is notable: 50 percent of U.S. homes use voice-activated devices, and smart speaker adoption has reached 79 percent. Globally, smart homes supported by IoT totaled approximately 127.7 billion USD in 2024. As of 2032, that figure is expected to exceed 633 billion USD.

Automation expansion is supported by over 17 billion IoT endpoints globally by late 2024, with the number rising steadily toward 27 billion by 2025. Connectivity standardization through Matter now ensures compatibility among lighting, thermostats, locks, cameras, TVs, appliances, and energy systems, with version 1.4.1 launched in May 2025 enabling NFC onboarding and multi‑device setup. AI integration in connected homes is growing, as seen in Samsung’s Ballie companion robot and AI‑equipped ovens and fridges that suggest cooking options or energy settings. Smart switches, such as LeGrand’s Excel Life platform, now cost around 300 USD for starter kits and represent a major entry point for new users. Homes now average 10.9 connected devices in Australia, 18 in U.S. Verizon households, and 8 types per home globally.

Energy optimization is becoming key—smart lighting installations grew by 45 percent and HVAC integrations by 44 percent between 2024 and 2025. Remote monitoring tools comprised 45 percent of usage growth, while cloud-based home management systems rose 46 percent. Entertainment systems involving connected LEDs and audio streamers accounted for 44 percent of smart device owner usage. Moreover, installation of AI-powered hubs and integration platforms increased by 49 percent. However, some consumers remain dissatisfied: less than half of smart appliance buyers consistently use internet connectivity, citing privacy and interoperability concerns. Cybersecurity issues remain relevant, with 79 percent of Americans expressing privacy concerns. Overall, market trends reflect a shift toward intelligent automation, interoperability, energy efficiency, and AI features, with security systems maintaining dominance.

Connected Homes Market Dynamics

Drivers

Integration of AI-enhanced efficiency and convenience.

More than 77 percent of connected device owners report improved quality of life, while smart home spending grew from 86 billion USD in 2020 to about 150 billion USD in 2025, nearly doubling over five years. Smart lighting sees 45 percent uptake, smart security devices 46 percent, and HVAC energy controls by 44 percent. This trend is driven by increased installations of digital assistants (voice-control in 50 percent of homes), smarter appliances (41 percent in U.S.), and smart lighting (36 percent). Energy management systems now realize demand increases of 47 percent and remote monitoring use grew 45 percent, further motivating adoption. Smart home hardware shipments in 2024 showed 892 million devices delivered globally, supplying nearly 18.8 billion active IoT endpoints.

Restraints

Privacy concerns and high integration complexity.

Approximately 79 percent of U.S. device owners worry about privacy, and surveys show under half of smart appliance buyers actually connect them to the internet. Interoperability limitations are prevalent—consumers currently manage multiple apps, and only 1.4 standard Matter has begun to unify this. High installation costs, such as smart switch kits priced around 300 USD, and average home automation setup cost ranging between 970–3 310 USD, deter widespread adoption. Security concerns persist: 40.8 percent of American homes report risk exposure due to connected devices. Device depreciation and limited longevity also pose challenges; homeowners demand reliable, long-lasting units rather than internet-linked features.

Opportunities

Expansion in emerging markets and energy sustainability.

India presents a 4.53 billion USD connected home market in 2024, expected to reach 12.76 billion USD by 2033, driven by 11 percent annual expansion in smart city initiatives and broadband growth. Asia‑Pacific adoption sees 17.4 percent household penetration in 2024; Europe smart device installations increased by 46 percent, driven by sustainability concerns leading to energy-saving adoption at double the global rate. Smart energy management systems—with smart thermostats, lighting, and monitoring—represent 25 percent of device sales globally. Matter-enabled systems now support energy and solar management, allowing standardized device adoption.

Challenges

Fragmented standards and cybersecurity threats.

Only one global standard (Matter) emerged in October 2022, but multiple standards and legacy devices still lead to compatibility gaps. Device-level data breaches remain a risk, with users reporting privacy concerns at 79 percent levels. Non‑standardized security measures and depreciation of older devices without backwards compatibility heighten vulnerability. High fragmentation across apps and platforms complicates user experience, while cybersecurity threats grow as more devices connect. Supply chain disruptions—such as chip shortages impacting device delivery and limiting connectivity—further complicate ecosystem cohesion.

Connected Homes Market Segmentation

Connected homes segment by type and application: by type—Energy Management Systems, Security & Access Control, Lighting Control; by application—Dwelling, Business Building, Hotel, Others. Overall, security systems encompass 30 percent of installations, energy systems 25 percent, and lighting systems 26 percent.

By Type

Energy Management Systems incorporate smart meters, thermostats, and solar integration. In 2024, these systems represented 25 percent of device installations, with European uptake 40 percent higher than global average. Remote monitoring grew 45 percent, and energy device integration rose 47 percent in 2024–2025. Matter v1.4 now supports energy and solar devices, adding opportunities in optimizing consumption and managing grid interactions.
Security & Access Control remains the largest single type, accounting for about 30 percent of demand. In North America and Europe, annual adoption of security installations increased by approximately 20 percent in 2024. Smart cameras, doorbells, and smart locks compose a majority of product installs, with U.S. households reporting 50 percent prevalence of video doorbells and 12.3 percent adoption of outdoor cameras. Integration with voice assistants and security apps contributes significantly.
Lighting Control devices—smart bulbs, switches, and sensors—contributed around 26 percent of connected home devices. Smart LED lighting installations grew 45 percent globally, with Asia‑Pacific and European regions showing intelligent lighting demand rises above 40 percent. Smart switches like LeGrand’s starter packs sold near 300 USD, while smart bulbs and dimmers added both convenience and reduced power use.

By Application

Dwelling remains the dominant application with over 60 percent of global connected home deployments in 2024. U.S. residences included an average of eight types of devices and 18 devices per connected household. Smart thermostats and lighting are common in single-family homes, while security systems and smart cameras proliferated in apartments valued at over 31 billion USD in 2024.
Business Buildings adopted smart automation at rising levels: corporate and multi‑tenant facilities integrated HVAC, lighting, energy systems, and security. Demand increased 46 percent for smart building systems in Europe and North America by 2025, and 44 percent in Asia‑Pacific a shift toward centralized energy management and enhanced climate control.
Hotel implementations grew by over 45 percent in 2024, installing smart thermostats, lighting, and mobile access locks. Deployment in hotels has become integral, with stress on convenience via in-room control and energy efficiency measures.
Others (retail, education, healthcare) installations increased by about 42–45 percent, driven by assisted living centers and smart automation in offices and schools.

Connected Homes Market Regional Outlook

The Asia‑Pacific region saw smart home household penetration reach 17.4 percent in 2024, with more than 60 percent growth in device adoption following broadband expansion. India contributed 4.53 billion USD in 2024, with sales projected to reach 12.76 billion USD by 2033. Southeast Asia and China invested in IoT infrastructure to support energy and security device rollouts.

North America

North America held a 33.7 percent share of the connected homes market in 2024. U.S. spending accounted for 36.38 billion USD in domestic smart home sales, with 45 percent of internet households owning at least one smart device. Connected home shipments numbered 60.4 million in the U.S. by early 2024. Energy devices grew by 47 percent, security systems by 46 percent, and smart lighting by 45 percent. Verizon reported that homes had an average of 18 connected devices, indicating multi‑device prevalence and ecosystem expansion.

Europe

Europe saw smart home penetration increase 46 percent in 2024. Smart lighting systems were adopted 40 percent faster than global averages, and security camera installations rose 20 percent annually. In the UK, smart switch kits priced around 300 USD became mainstream among new homeowners. HVAC systems installations increased by 44 percent. Smart energy device integrations, supported by Matter and utility-led incentives, proliferated in Germany and France.

Asia-Pacific

Asia‑Pacific connected home household penetration was 17.4 percent in 2024, with smart device counts expected to double by 2028. Smart appliance ownership in India included 25 percent small and 36 percent large smart appliances among broadband households. Southeast Asia and China deployed smart energy systems at rates 50 percent higher than other regions. Asia‑Pacific smart home market accounted for 26.8 percent share by 2034 projections.

Middle East & Africa

Middle East & Africa markets experienced 45 percent adoption growth in 2024 across smart energy and security segments. Voice-control devices and integrated lighting systems saw strong urban uptake. Regional projects focused on sustainable city initiatives and solar‑powered energy systems have driven connected home acceptance in GCC nations. Upgrades in broadband infrastructure and 5G expansion are creating a foundation for future integration.

List of Top Connected Homes Companies

ADT
Honeywell
Vivint
Nortek
Crestron
Lutron
Leviton
Comcast
ABB
Acuity Brands
com
Control4
Schneider Electric
Time Warner Cable
Siemens AG
Sonos
Savant
Nest
AMX
Legrand

Top Two Companies with the Highest Share

Honeywell: Holds the largest market share with over 15 percent of global smart thermostat and security control installations in 2024, serving more than 20 million households.

ADT: Owns the second-highest share, with approximately 12 percent of North America’s connected security systems, reaching more than 8 million monitored homes in 2024.

Investment Analysis and Opportunities

Connected homes represent a strategic investment avenue, with global device shipments reaching 892 million units in 2024. Investment trends highlight software platform development, AI integration, and interoperability standards like Matter. Funding rounds in 2024 showed over 500 million USD directed to smart energy startups and another 300 million USD to security platform firms. Venture capital focus in Asia‑Pacific rose 60 percent year over year, targeting markets like India where the 4.53 billion USD connected home sector is expanding. Institutional investors are channeling over 250 million USD annually into smart city infrastructure, supporting consumer product scale‑up.

Energy sector investors are eyeing sensor and meter-based automation: smart meter installation grew 47 percent in 2024, incentivized by energy efficiency regulations. Smart lighting control systems, posting 45 percent adoption, attract funding due to transaction-standardized platforms. ADT and Honeywell initiated joint venture energy–security packages in 2024, backed by 150 million USD capital commitments.

Connectivity platforms leveraging Matter and Thread receive investment toward interoperability. Startups enabling unified voice, energy, security, and lighting control closed funding rounds above 50 million USD. Interest in AI-driven home robotics like Samsung’s Ballie continues, with initial investments exceeding 100 million USD across product and ecosystem development stages. Commercial building retrofits integrate connected technologies, with 400 million USD in smart office investments across Europe and North America.

Smart hotel solution installers saw 130 million USD in capital deployment, with integrations in over 5 million rooms in 2024. Europe’s green energy regulations prompted 200 million USD funding for residential solar-integration automation. Regional investment in Middle East smart home infrastructure reached 180 million USD in 2024, involving energy-efficient and security-focused solutions.

Overall, more than 1.1 billion USD was invested globally in 2024 across hardware, software, and platform development within the connected homes ecosystem. Emerging opportunities persist in affordable voice control, smart sensor platforms, and retrofit security packages. Cross-sector investment is anticipated to exceed 1.3 billion USD by late 2025.

New Product Development

Smart oven models introduced in 2024 included AI‑camera features that analyze ingredients and suggest cooking programs. Samsung’s updated Ballie robot companion expanded to include workout video projection and pet monitoring, marking over 100 million USD invested in development. Smart switch kits from LeGrand, priced around 300 USD,–added integrated power monitoring and NFC onboarding. In early 2025, LeGrand sold over 20 000 starter kits globally.

Matter standard v1.4.1, released May 2025, supports NFC-based onboarding and multi-device setup, simplifying installation by 35 percent and expanding compatible offerings to include solar systems, EV chargers, and water heaters. Smart thermostats updated in 2024 added occupancy sensing and predictive heating features, cutting energy waste by 20 percent. In Europe, smart lighting systems launched automatically adjust color and intensity based on local sunrise/sunset timings.

Smart security devices introduced encrypted local storage in cameras in 2024—compliance enhancements responding to privacy concerns cited by 79 percent of consumers. Advanced alarm systems now integrate video doorbells, sensors, mobile alerts, and remote actuation across 8 million homes in North America. Smart entertainment hubs integrated with voice-controlled TV systems now support centralized app control, with 18 connected devices average in U.S. homes.

Smart metering solutions rolled out residential solar and battery integrations in Asia‑Pacific, enabling households to manage surplus generation—around 12 percent of new smart energy households were solar-integrated in 2024. Robotic vacuums and floor cleaners attained 99 percent user favorability, with over 5 million units sold in 2024, especially in Australia and the U.S.

In China, smart kitchen devices such as AI‑enabled refrigerators offering recipe recommendations based on inventory rolled out across 2 million households. Smart faucets and kitchen appliances captured 2.5 percent and 3.4 percent ownership, respectively, among U.S. broadband homes. Workout robotics—smart scooters and stations—entered 2 percent of U.S. homes.

Connectivity chipset vendors introduced dual‑protocol Matter/Thread modules in late 2024, accelerating rollout across 300 million devices planned by 2025. Over 47 percent of smart home installs in Europe used cloud-based management systems by 2024, requiring enhanced data infrastructure.

Security platforms also added AI‑driven anomaly detection in 2024, reducing false alerts by 40 percent. Cross-platform integrations now available across 70 percent of new smart home devices. Together with Matter standardization, these innovations are driving the next wave of mass adoption.

Five Recent Developments

Matter v1.4.1 standard release on May 7, 2025, added NFC onboarding and multi-device setup, supporting major device categories including appliances and solar systems.
Samsung Ballie robot expansion in late 2024–early 2025 introduced new pet-monitoring and workout video capabilities, reaching a wider global audience.
LeGrand smart switch starter packs launched globally in 2024 with integrated power monitoring, sold for approximately 300 USD, gaining popularity among first-time smart-home users.
AI‑camera ovens and smart fridges, introduced in early 2025, started offering cooking assistance and inventory-based recipes, aiding consumer convenience.
Encrypted local storage cameras rolled out in 2024 to address privacy concerns in 79 percent of users, with enhanced data protection across tens of thousands of households.

Report Coverage of Connected Homes Market

This connected homes market report encompasses a multi-dimensional view of device, application, regional, and competitive landscapes, with detailed analysis of quantitative volumes and spending patterns. It charts device shipment data reaching nearly 892 million units in 2024 and the presence of over 60 million connected homes in the U.S., with global endpoints estimated at 17–18.8 billion IoT nodes. The market’s current value (~91 billion USD in 2024) and projected device valuations (~138 billion USD by 2033) are examined through segmentation by type (energy systems, security, lighting) and application (dwelling, business buildings, hotels, others).

Energy management systems form about 25 percent of the device landscape, supported by smart meter and thermostatic deployments with positive uptake rates. Security systems hold approximately 30 percent share, while lighting control devices occupy roughly 26 percent. Market dynamics are explored through drivers like AI convenience and energy-savings, restraints involving privacy and interoperability, emerging opportunities in solar integration and emerging regions, and challenges related to fragmented standards.

Regionally, North America dominates with 33.7 percent global share and an average of 18 devices per home. Europe benefits from 46 percent installation growth and EU regulatory support, while Asia‑Pacific displays strong expansion in India’s 4.53 billion USD segment and broader market penetration at 17.4 percent. Middle East & Africa show steady urban uptake in security and energy systems tied to smart city budgets.

Competitive analysis highlights Honeywell and ADT as leading players with combined share exceeding 27 percent in the security and thermostat segments, with Honeywell servicing over 20 million homes worldwide and ADT monitoring 8 million homes in North America. The list of top firms includes Nest, Siemens, Leviton, Crestron, Vivint, Comcast, ABB, Lutron, Acuity Brands, Alarm.com, Control4, Schneider Electric, Time Warner Cable, Sonos, Savant, AMX, and Legrand—showing a diversified ecosystem.

The investment section captures over 1.1 billion USD venture and institutional capital in hardware and software platforms globally in 2024. Smart security, energy, and connectivity startups each received hundreds of millions USD. India attracted more than 60 percent growth in investor interest due to smart city initiatives. Product innovation is detailed through flagship deployments like Matter v1.4.1, encrypted cameras, AI ovens, smart robots, and interoperable switches.

New product development emphasizes product iteration, privacy compliance, interoperability standards, and user experience enhancements as key themes. Five recent developments reflect momentum in standardization, AI‑driven home devices, privacy safeguards, and integrated smart platforms.

This report helps stakeholders understand the volume, device types, deployment contexts, techno-economic drivers, and competitive strategies shaping the connected homes market. With comprehensive coverage, it serves as a roadmap for investment, product strategy, market entry, and regulatory alignment across tech-led residential, commercial, and hospitality verticals.