Global shipments of smart home devices have hit a slump that is expected to extend into 2024, at which time sales are expected to pick up again.

The market continued to decline in the first quarter of 2023 as shipments fell 5.6% year over year to 186.0 million units, according to the International Data Corporation (IDC) Worldwide Quarterly Smart Home Device Tracker.

Smart speakers and networked video entertainment devices faced the steepest declines in the first quarter, down 15.4% and 7.8% respectively compared to the prior year.

Looking ahead, IDC expects the market to decline by 1.8% overall in 2023 as weak consumer demand and economic volatility continue to put significant downward pressure on the market.

Although much uncertainty exists, IDC expects the market will return to growth in 2024 and continue through 2027 with device volumes reaching 1.1 billion shipments in 2027.

Jitesh Ubrani, Research Manager for IDC's Mobility and Consumer Device Trackers, says, "While there have been pockets of growth, the market has largely stalled due to lack of meaningful upgrades between one generation of devices and the next. Even the launch of the Matter standard has not been enough to spur demand despite offering some ease of use."

Apart from smart speakers and networked video entertainment devices, many other smart home categories such as lighting, thermostats, and home monitoring and security devices are expected to witness high growth over the next five years in part due to rising consumer awareness of smart home devices in many parts of the world and the rise of emerging markets, IDC finds.

Adam Wright, Research Manager, Smart Home and Office Devices at IDC, says, "The worldwide smart home market is witnessing uneven growth as some regions fare better than others.

"In more mature markets like the United States, high installed bases of devices coupled with issues of underutilization, ongoing disruptions form supply chains, logistics issues, high inflation, and record high credit card debt have impacted the market's growth in 2022 and the first part of 2023 and are expected to continue to put downward pressure on the market for the foreseeable future.

"But other regions that are earlier in their adoption curve like Latin America and parts of Asia/Pacific have much opportunity for growth."

IDC's Worldwide Quarterly Smart Home Device Tracker provides insightful analysis, quarterly market share data, and a five-year forecast for the smart home device market.

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis.