The smart home is no longer a futuristic fantasy; it’s rapidly becoming a reality for many. A recent report by Parks Associates reveals that nearly half of US households with internet access now boast at least one smart device. This surge in popularity is fueled by the rise of artificial intelligence, which is transforming homes into more secure and automated environments.
From smart locks and lightbulbs to intelligent speakers, these devices are designed to make life easier. Imagine arriving home to find your lights and TV already on, creating a welcoming atmosphere – a smart home experience that’s increasingly appealing to homeowners.
According to Parks Associates’ whitepaper, “Smart Home Evolution: Unlocking Value,” the smart home market is maturing, with 45% of US internet-connected households owning at least one smart device in 2024 (excluding smart speakers/displays). This represents a remarkable 165% increase over the past decade. In the last four years alone, roughly 13 million new households have entered the market, and 18% of smart home device owners are considered “power users,” owning six or more devices.
The report also highlights that millennials are the most enthusiastic adopters of smart home technology, followed by Gen X. Interestingly, households with children are particularly drawn to smart home solutions, with 63% owning at least one smart home product compared to only 37% of those without children.
AI as key accelerator
AI is a major catalyst for smart home growth, with vendors increasingly incorporating AI features into their products. “Smart home device owners are likely to be on the forefront of AI usage generally, as they are more familiar than non-owners with the next wave of generative and conversational AI tools like ChatGPT, Claude, and Gemini, and more likely to use these tools,” the paper noted. Consumers are drawn to the AI-enabled benefits, especially those related to home safety and security.
The report identifies key competitive differentiators in smart home solutions:
AI-Driven automation and personalization: Machine learning adapts to user behavior to optimize energy use, security, and comfort. Next-generation voice assistants and predictive automation further enhance user convenience.
Advanced sensing and real-time monitoring: Smart sensors improve safety with real-time alerts for fire, CO, water leaks, and motion detection. Video analytics and AI-powered security enhance threat detection and verification.
Proactive and predictive services: Internet service providers monitor network traffic for malicious activity and offer proactive support. Predictive maintenance reduces downtime and costly repairs for HVAC, appliances, and security systems.
Challenges remain
Despite its strong growth, the smart home market still faces challenges. According to the report, 52% of users experience setup difficulties, and 34% face connectivity issues. Cybersecurity is also a major concern, with consumers seeking assurances that their products are secure and that they can control their data. The paper indicates that 31% of internet households would like independent cybersecurity certification to resolve their data security concerns.
Interoperability remains a significant pain point, with 60% of device owners using products as standalone solutions rather than integrated systems. A fragmented experience, such as a Google setup in the living room and an Amazon setup in the bedroom that don’t communicate, can negatively impact user satisfaction.
“The number of apps required to manage different smart home features poses a significant challenge to interoperability and user experience. This fragmentation makes it harder for consumers to adopt and integrate new smart home technologies and creates barriers for achieving a truly connected home. Integrating these devices is also difficult today,” the paper states.
Looking Ahead
Overcoming these challenges requires a collaborative effort from manufacturers to adopt common standards and protocols that enable devices to communicate seamlessly, regardless of brand. The industry is pinning its hopes on standards like Matter and Aliro to address fragmentation, enabling multi-brand compatibility and smoother device coordination.