Study #: 3659 | Published: 07/2018 | Pages: 126 | Individual User License: US$ 2,900

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

Furthermore, increasing consumer familiarity with smart home devices in general and optimism (however cautious) about the potential solutions they represent will underlie gains.

However, connected thermostats will continue to fill a key role in the market, appealing to consumers who may seek the cost- and energy-saving benefits of smart thermostats but are put off by their higher-tech features and/or somewhat higher price tag.


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Smart and Connected Thermostats

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.

Smart and connected thermostat

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 info@freedoniagroup.com!

Freedonia methodology

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? 
Contact your Freedonia sales rep today to find out more information or call and ask for redacted tables at +1-440-684-9600.


Table of Contents

EXECUTIVE SUMMARY

SMART THERMOSTAT OVERVIEW

Key Findings

Smart Versus Connected Thermostats

Broadband Internet Subscriptions per Household

The Internet of Things

Definition

Smart Home Revolution: The Race to Automate the Home

Artificial Intelligence, Domotics, & Ambient Computing

Technology & Product Innovation

Introduction

Activity & Ambient Temperature Sensors

Geofencing

Learning Algorithms

Blockchain

Environmental & Regulatory Factors

Advantages of Smart & Connected Thermostats

Challenges Impacting Smart & Connected Thermostat Demand

Smart Home Integrations

Sales Channels for Smart & Connected Thermostats

Scope

Retail

HVAC Contractor

Utilities

Other Distribution Channels

PRODUCTS

Key Findings

Smart & Connected Thermostat Demand Forecasts

Value Demand Forecast

Volume Demand Forecast

Smart & Connected Thermostat Demand by Type

Key Smart Product Introductions

Overview

Carrier (United Technologies)

ecobee

Honeywell

LUX Products

Nest Labs (Google)

Schneider Electric

PRODUCERS

Key Findings & Industry Composition

Market Share

Research & Product Development

Mergers & Acquisitions

Cooperative Agreements

Marketing Strategies

Overview

Co-Branding Partnerships

Energy Conservation Programs

Philanthropic Initiatives

Smart Neighborhoods

Alarm.com Incorporated

Alphabet Incorporated (Google)

APX Group Incorporated

Ecobee Incorporated

EcoFactor Incorporated

Emerson Electric Company

Honeywell International Incorporated

Johnson Controls plc

LUX Products Corporation

Schneider Electric

tado° GmbH

Tantalus Systems Corporation

United Technologies Corporation

Other Companies Mentioned in Study

APPENDIX

Scope

Definitions

Abbreviations

Freedonia Methodology

Study Specific Methodology

Sources

Associations & Agencies

Related Freedonia Group Studies

Climate Zones

Macroeconomic Assumptions

Economic Environment

Demographic Trends


List of Tables

SMART THERMOSTAT OVERVIEW

Table 2-1 | US Households with Broadband Subscription, 2012 - 2025 (millions)

Table 2-2 | Smart Home Speaker & Hub Retail Sales, 2016 - 2025

PRODUCTS

Table 3-1 | Smart & Connected Thermostat Demand by Value, 2012 - 2025 (million dollars)

Table 3-2 | Smart & Connected Thermostat Demand by Volume, 2012 - 2025 (million units)

Table 3-3 | Smart & Connected Thermostat Demand by Type, 2012 - 2025

Table 3-4 | Smart & Connected Thermostats: Timeline of Key Market Developments

PRODUCERS

Table 4-1 | Selected Smart & Connected Thermostat Market Participants

Table 4-2 | Selected Cooperative Agreements

Table 4-3 | Alarm.com: Key Product Lines

Table 4-4 | Alphabet: Key Product Lines

Table 4-5 | Vivint: Key Product Lines

Table 4-6 | ecobee: Key Product Lines

Table 4-7 | EcoFactor: Key Product Lines

Table 4-8 | Emerson Electric: Key Product Lines

Table 4-9 | Honeywell International: Key Product Lines

Table 4-10 | Johnson Controls: Key Product Lines

Table 4-11 | LUX Products: Key Product Lines

Table 4-12 | Schneider Electric: Key Product Lines

Table 4-13 | tado°: Key Product Lines

Table 4-14 | Tantalus Systems: Key Product Lines

Table 4-15 | United Technologies: Key Product Lines

APPENDIX

Table 5-1 | Relevant Industry Codes

Table 5-2 | Abbreviations & Acronyms Used in Study

Table 5-3 | Macroeconomic Indicators, 2007 - 2022 (billion 2009 dollars)

Table 5-4 | Population & Households, 2007 - 2022 (million persons)


List of Figures

EXECUTIVE SUMMARY

Figure 1-1 | US Smart & Connected Thermostat Market

SMART THERMOSTAT OVERVIEW

Figure 2-1 | Key Trends in the US Smart & Connected Thermostat Market

Figure 2-2 | US Broadband Households that Purchased Smart & Connected Thermostats, 2004 - 2017

PRODUCTS

Figure 3-1 | Key Smart & Connected Thermostat Product Trends

Figure 3-2 | Total HVAC & Smart & Connected Thermostat Demand by Value, 2004 - 2017 (million dollars)

Figure 3-3 | Smart & Connected Thermostat Demand by Volume, 2011 - 2025 (thousand units)

Figure 3-4 | Smart & Connected Thermostat Volume Demand Share by Type, 2012 - 2025

Figure 3-5 | Carrier Smart & Connected Thermostats

Figure 3-6 | ecobee Smart Thermostats

Figure 3-7 | Honeywell Smart Thermostats

Figure 3-8 | LUX Products Smart Thermostats

Figure 3-9 | Nest Labs Smart Thermostats

Figure 3-10 | Schneider Electric's Wiser Air Smart Thermostat

APPENDIX

Figure 5-1 | Continental US Climate Zones

Figure 5-2 | Annual Growth in Real GDP, 2000 - 2017, Compared to 1980 - 2005 Average (percent)

Figure 5-3 | Annual Population Growth, 2002 - 2017 (percent)


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