Smart and Connected Thermostats - Demand and Sales Forecasts, Market Share, Market Size, Market Leaders

Smart and Connected Thermostats:

Scope, Demand, & Findings

This study analyzes the market for smart and connected thermostats in the US, which totaled $640 million in 2017.

It presents historical demand data (2012 and 2017) and forecasts for 2022 and 2025 by product (smart thermostats and connected thermostats). It also features discussion of the primary sales channels used to purchase these devices, as well as detailed profiles of key product introductions and industry leaders, including Alarm.com, ecobee, Emerson Electric, Honeywell, Nest Labs (Google), and United Technologies.

Will the United States market see growth in this industry? 

Yes!  US value demand for smart and connected thermostats is forecast to decelerate markedly from the rapid growth of the 2012-2017 period to rise 18% per year through 2022, as demand becomes less comprised of initial product purchases and transitions to be more replacement-oriented. Demand for both products will continue to outstrip sales of non-smart types. Smart thermostats will retain a more than 70% share of the market over lower-tech connected types in 2022 based on their declining prices, superior performance, ability to integrate with various other devices in a smart home ecosystem, enhanced capacity to produce cost and energy savings.

Scope & Methodology 

What is a smart thermostat? 

This study analyzes the US consumer market for smart and connected thermostats in both unit and value terms. Other related internet-connected HVAC equipment – such as smart appliances, humidifiers, and vents; separately sold activity and ambient temperature sensors; software add-ons; and accessories like fobs and dongles – are not represented in the data compiled herein, but they are commonly sold with or built into some of the profiled products, particularly smart types.

For the purposes of this study, a thermostat is considered smart when it:

• Autonomously learns user norms and responds to disruptions, either by learning algorithm or geofencing capabilities
  
• Can communicate with other IoT devices (e.g., smart plugs, appliances) within a smart home ecosystem to streamline efficiencies
  
• Leverages data to regulate itself per user specifications or to reduce household energy consumption

Furthermore, connected thermostats refer to those that connect to the internet and allow for remote control via mobile app – features smart types also possess – but do not learn or take action independently, requiring user input.

Other thermostat types include nonprogrammable and programmable, neither of which support remote self-monitoring or autonomous learning and are excluded from the scope of this study. Also excluded are thermostats used to regulate temperature in appliances, as well as those marketed exclusively to commercial and industrial end users.

Therefore, this study covers smart and connected thermostats sold via conventional consumer markets for use in residences and small businesses.

The study also presents unit and value demand forecasts for smart speakers and hubs.

How does Freedonia conduct research?

The Freedonia Group, a subsidiary of MRDC, has been in business for more than 30 years and in that time has developed a comprehensive approach to data analysis that takes into account the variety of industries covered and the evolving needs of our customers. 

Every industry presents different challenges in market sizing and forecasting, and this requires flexibility in methodology and approach. Freedonia methodology integrates a variety of quantitative and qualitative techniques to present the best overall picture of a market’s current position as well as its future outlook.

Need more detail on methodology? Ask your Freedonia representative or email [email protected]!

Smart Thermostat Overview

Broadband internet access is essential for the effective operation of smart and connected thermostats, which depends on wireless communications between mobile phones and other smart devices. Therefore, it is extremely unlikely that consumers without broadband access would purchase a smart or connected thermostat. As a result, the necessity of extant broadband internet infrastructure to support key product features creates a ceiling for the total number of potential households that could install smart and connected thermostats.

As the most commercially viable IoT devices integrate with a broad range of platforms from a variety of manufacturers to support the diversity of brands a given household is likely to own, demand trends for smart speakers and hubs are key to forecasting the US consumer market for smart and connected thermostats.

From Alexa (Amazon Echo) to Bixby (Samsung SmartThings), the proliferation of virtual personal assistants (VPAs) has driven the development of increasingly sophisticated AI systems that can not only decipher human speech, process requests, and learn a user’s daily routine, but also leverage domotic (home automation) data to proactively learn household norms and identify disruptions to them. For example, most smart thermostats are equipped with geofencing capabilities, which enable the device to recognize when a household is empty and adjust the interior temperature to maximize energy efficiency.

The study will provide additional background information on technology & product innovation including:

• Activity & Ambient Temperature Sensors 
• Geofencing
• Learning Algorithms
• Blockchains

Key Findings

Are you looking to answer any of the following questions?

With over 35 charts, tables, and graphs - and 100+ pages of analysis - this study will be able to answer the below questions and more: 

• How do internet subscriptions affect demand? 
• What sales channel are most important for smart thermostats?
  
• What is the value demand for smart thermostats? What about volume?
  
• What are the marketing strategies for smart and connected thermostats?
• What's the current market share for smart thermostats?