Europe drives doubling of smart thermostat market

Europe drives doubling of smart thermostat market

Market news |
By Nick Flaherty

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The market for smart thermostats is set to double over the next five years, driven by Western Europe and increasing consolidation.

The latest report from ABI Research highlights growth in smart home device shipments for energy management, specifically smart thermostat systems, as well as smart lights, and smart plugs, growing from 230.9 million in 2024 to over 584 million in 2030. 

Smart thermostats sector will have the highest impact on residential energy consumption, with over 45% adoption in Western European and North American households, amounting to 67.2 million devices shipped globally by 2030.

“Western European households will lead the adoption of energy efficiency smart home devices, followed closely by North American households. The rate and speed of adoption depends on many factors such as increased household Wi-Fi connectivity, device price points, installation type, and customer service,” explains Rithika Thomas, Sustainable Technologies Senior Analyst at ABI Research. “Global Energy Regulations, eco bonuses, and subsides in Europe (particularly in France, Germany, and Italy) will additionally drive adoption during the forecast period and open opportunities in retrofit markets, which will surpass new builds.”

Legacy, big-name brands are strengthening their offerings by acquiring smaller companies with niche expertise as the fragmented smart home industry matures. Currently, the ecosystem is fragmented, with no dominant overall players and a significant disconnect between product marketing, market hype, consumer adoption, and purchasing power.

Data privacy, security, sustainability, convenience, energy savings, and interoperability with existing devices are strategic considerations vendors use to drive customer satisfaction and ensure vendor stickiness.

Google, Honeywell, Amazon, and Ecobee represent more than 60% of the global market share for smart thermostats with an installed base predominantly in single-family residential homes. Other smart thermostat vendors include Carrier, Schneider Electric in France, Netamo, Samsung, Siemens, and LeGrand & Tado in Germany.

“As the smart home market matures, consumers are becoming tech savvy and comparing product performance – vendors need to prioritize customer engagement, ease of installation, demonstrate use cases, adopt Artificial Intelligence (AI), Machine Learning (ML), and data analytics to enhance the user experience without being intrusive to stay ahead of the game,” said Thomas.

The data comes from the Smart Home Hardware for Energy Management report from ABI Research

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