The European smart home market is on a steady growth trajectory, with the number of smart homes reaching 65.5 million by the end of 2023, representing 28% of households, according to a new research report by IoT analyst firm, Berg Insight.
Although still behind North America in terms of penetration and market maturity, Europe is rapidly catching up. By 2028, the number of smart homes in Europe will reach 101.2 million, achieving a market penetration of nearly 42%.
This growth is driven by increasing consumer demand for smart home products such as thermostats, security systems, lighting solutions, and entertainment devices.
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Market Overview: Growth Projections and Revenue
In 2023, 218.2 million smart home systems were used across the EU27+3 countries, including 28.9 million multifunction or whole-home systems and 189.3-million-point solutions. With overlaps accounted for, this translates to 65.5 million smart homes. The market is expected to grow at a compound annual growth rate (CAGR) of 9.1% over the next five years. Additionally, market revenues reached EUR 36.2 billion (USD 39.1 billion) in 2023, and are forecast to grow at a 12.5% CAGR, reaching EUR 65.0 billion (USD 70.3 billion) by 2028.
Despite economic challenges in 2023, including inflation and rising living costs, the European smart home market is expected to rebound in 2024. Consumers are increasingly gravitating towards connected devices that offer energy savings, enhanced security, and convenience. Popular products include smart thermostats, light bulbs, security cameras, and speakers. Leading companies in the European market include eQ-3, Shelly, Verisure, and Somfy. While DIY solutions have gained widespread popularity in Europe, whole-home systems from automation specialists like Loxone are also gaining traction.
“Smart and connected products and services in the home provide peace of mind and enable cost-savings and enhanced security,” noted Martin Apelgren, Principal Analyst at Berg Insight. He also highlighted the potential of the Matter standard, which, although slow to roll out, could unify the smart home ecosystem, making it easier for consumers to integrate multiple smart devices, seamlessly.
Europe is on track to achieve significant growth in the coming years as smart homes become a standard feature in modern living. The ability to remotely control and manage home systems is becoming increasingly expected by consumers, further fueling the expansion of the market.
