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In 2017, 433,1-million smart home devices were shipped worldwide, growing 27,6% from the previous year.

Looking ahead, the market is expected to experience a compound annual growth rate (CAGR) of 18,5% as it balloons to 939,7-million devices shipped in 2022.

This is according to the Worldwide Quarterly Smart Home Device Tracker  from International Data Corporation (IDC) that focuses on market sizing and forecasting of IP-connected devices used in the home, inclusive of smart speakers, digital media adapters, lighting, thermostats, and more. The historical data is accompanied by a five-year forecast that offers insight into upcoming trends and the ever-evolving market.

Within the smart home market, the smart speaker category, which includes devices like the Amazon Echo and Google Home, will remain the fastest growing category throughout the forecast. Meanwhile, shipments for most other categories, with the exception of video entertainment products, will experience a double-digit CAGR during the same period.

“The smart home market is still in its infancy but we’re already seeing some significant changes in consumers’ and vendors’ approach,” says Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. “There’s less of a focus on having a central hub and apps as the center of the interface as hardware makers race to create interoperability with smart assistants like Alexa, Siri, or Google Assistant.

“On the other hand, consumers, while still somewhat hesitant to anthropomorphise smart assistants, are beginning to expect a more natural user interface to the myriad of smart home devices.”

“While it’s still early days for the smart home market – and the wider consumer IoT ecosystem in general – we expect to see considerable growth over the next few years, especially as consumers become more aware of and increasingly interact with smart assistant platforms like Amazon’s Alexa and Google Assistant,” says Adam Wright, senior research analyst for IDC’s Consumer IoT Program.

“Whether in the form of a smart speaker or embedded in a thermostat, fridge, TV, or any other device, smart assistants are quickly becoming the cornerstone of consumer IoT by enhancing the accessibility, use, and functionality of connected devices, which will noticeably boost adoption rates in the near future.”

Video entertainment devices, inclusive of smart TVs, digital media adapters, and other IP-connected video devices, are forecast to deliver a CAGR of 8,3% for unit shipments over the 2017–2022 forecast period. These devices are also expected to capture around three quarters of the dollar value of the entire smart home market as the average sale price (ASP) for TVs will be among the highest. Leaders in the TV category during 2017 were Samsung and LG while category leaders for digital media adapters during the same period were, in order, Amazon, Google, and Roku.

Home monitoring/security is comprised of devices like connected door locks, cameras, moisture sensors, door bells, and more. IDC expects this will remain the second largest category in terms of unit shipments through 2022 as products become easier to deploy in the home and will not require consumers to have a “DIY attitude” to integrate these products with their smart assistants and other devices.

Smart speakers with built-in smart assistants have captured the spotlight recently as major new brands like Apple have entered the market. In addition, Amazon and Google have been quick to respond by offering additional models and price points through their first-party speakers and by partnering with numerous other brands to bring Alexa- or Google Assistant-enabled speakers.

What remains to be seen is how long the partners can survive since the sale of hardware stands to be the smallest part of the overall revenue associated with this category.

Connected lighting products, like those from Philips, GE, IKEA, and others, have to some extent been the gateway for consumers to the larger smart home market. With prices quickly dropping and bundling with smart speakers as an entry level smart home solution, the lighting category has a lot of future potential. IDC anticipates this category to be worth more than $3,5-billion dollars by the end of 2022.

Thermostats, like the ones offered by Nest or Ecobee, are expected to have a worldwide CAGR of 20,8% for unit shipments by 2022. Despite the high growth, IDC expects it to be among the smallest categories as most homes will have a single thermostat and a large part of the world (for example, Asia/Pacific and Middle East) does not use standalone thermostats, relying instead on those built into air conditioners or heating units.

Other smart home products like connected appliances, sprinkler systems, and other smaller devices are expected to see shipments grow at a CAGR of 18,2% from 2017–2022. Many of the analogue counterparts, like traditional appliances, have long replacement cycles and are expected to have limited overall appeal within the future smart home.