Consumer spending on smart home technologies will grow in 2020 despite economic disruptions due to COVID-19, according to a new report released by ABI Research.
The research firm predicts the global market will expand by 4% in 2020 compared to 2019.
The market is expected to generate $85 billion in revenue in 2020. However, spending will be well below pre-COVID-19 expectations.
Pre-pandemic 2020 market revenue growth was forecast to hit 21% over 2019 – a $14.1 billion loss.
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Economic uncertainty, consumer spend constraint, restricted physical retail opportunities, installation restrictions, disrupted manufacturing, and distribution have curbed consumer spending.
However, the study finds that the spending shortfall is temporary.
By 2026, the market is expected to reach $317 billion, up 5% over pre-COVID-19 forecasts.
Much of the revenue lost in 2020 will be deferred to the next and following years, especially as smart technologies have cemented their value to vendors and consumers alike.
Jonathan Collins, research director at ABI Research, said: “The pandemic is a double-edged sword for the smart home industry.
“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 homes space.
“Smart home has an increasingly valuable role to play in consumers’ lives and spending habits. Amazon’s Alexa platform, for example, eases consumer spending through Amazon’s own stores by supporting the entire process from shopping list creation to delivery management. This highlights the trajectory for smart home to increasingly shape and drive consumer spending.
“COVID-19 may have impacted revenues this year, but in the long term, it will also help draw investment, drive greater adoption, and disrupt smart home technology integration.”
Read more about the report.