A reduction in office occupancy and lease terminations, due to the growth of remote work, has had an inverse effect on consumer spending. As an example, despite the economic issues in some markets, spending on smart home devices grew in 2022.

According to the latest market study by ABI Research, by the end of the year, smart home hardware revenues  — including devices, hubs, and controllers — will surpass $30 billion worldwide, that’s up by 15 percent over 2021.

Smart Home Market Development

According to the ABI assessment, driving investments in the face of a sharper economic reality is a growing expectation among consumers for smart home capabilities that deliver greater value.

“The COVID pandemic-induced emphasis on home improvement boosted the Smart Home industry,” said Jonathan Collins, research director at ABI Research.

The Work-from-Home phenomenon moved into a more mainstream awareness that continues to bolster spending as consumers look to replace or improve devices in and around their homes.

Similarly, the largest consumer technology and home goods players, from Amazon and Apple to Ikea and Somfy, are expanding their products that connect to existing smart home systems.

Strong support for the Matter 1.0 specification, released in early October, enables cross-vendor device interoperability, which maximizes the potential for their products to reach consumers and simplifies a homeowner’s purchase and installation of new devices.

Moreover, as consumer demand and expectations for smart home capabilities grow, device purchases are pushing into previously underserved market areas, such as Multi-Dwelling Units (MDUs) and rental properties, the hospitality sector, and other environments.

“That is not to say growth will be even across device categories or vendors. Interoperability, functionality, and application integration will all be key to spending as consumers increasingly transition from single-device purchasing to building out whole-home systems,” says Collins.

As we look to the future, more research will explore how the smart home market is positively impacted by recent economic disruptions within the commercial real estate market, and how consumer demand for improved home office technologies evolved.

Outlook for Smart Home Applications Growth

That said, I anticipate home networking and device connectivity technologies — including Wi-Fi and Bluetooth, will continue to advance and enable more secure ways for employees to remotely access corporate IT or SaaS applications.

Furthermore, forward-thinking internet access service providers are already seeking new ways to enhance their offerings that effectively meet the evolving distributed workforce requirements of progressive corporations that support flexible working models.

In addition, I believe the design of digital workspace solutions will change to meet the needs of two distinct use case groups of remote stakeholders — home-based knowledge workers, and mobile frontline employees. The development of new Online Employee Experience benefits will also drive growth.