Smart thermostats dominate European connected home market


Smart thermostats remain the product where Europeans spent the most money within the connected home market, according to a new study released by consulting firm Delta-EE.

The smart thermostat market accounted for €371million ($440 million) of spending in 2019, compared to connected lighting, in second place, at €279 million ($330 million) according to the Connected Homes; State of the Market 2020 report.

The UK, Germany and the Netherlands accounted for 70% of all connected homes product sales in 2019.

The UK and The Netherlands both have an interesting combination of a majority of gas boilers and a highly competitive market for heating and energy, boosting the deployment of smart thermostats.

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To date, Europe has over 7.5 million connected homes and is expected to expand the market by 13% this year, despite COVID-19.

The pandemic, however, disrupted the market with the UK, for example, witnessing almost no connected homes sales during the first two weeks of the lockdown, even six weeks later sales hadn’t recovered.

New entrants into the connected home market include France who has a big installed base of gas boilers and electric heating. Italy was the largest growing region in 2019, increasing by 50%, but it remains small.

Like Spain, Italy has strong opportunities in connecting air conditioning systems. The report notes this to be a key growth area, particularly as heatwaves become more frequent.

Additionally, Eastern Europe and China are increasingly looking to design and manufacture devices as the market expands to new players.

Arthur Jouannic, principal analyst at Delta-EE, said: “The growth of connected home devices in these countries shouldn’t come as a surprise. Both energy and heating companies have been keen to keep pushing the connected home energy market forward. The shift to more of us working from home places new emphasis on comfortable working conditions, including heating and home automation. This means connected devices have a key role to maintain comfortable conditions.

“It’s a fascinating time in the connected homes space as changes are afoot.

“Smaller markets are growing at pace; new innovations are being refined and commercialised such as remote boiler diagnostics; But one area of interest is the changing business models around connected homes. Heat-as-a-service is growing in popularity and this is working in tandem with more subscription-based approaches for connected homes devices. Many players are now bundling in energy, heating and repairs bearing much more risk than current energy suppliers. This makes connectivity key to ensure best in class customer experience is achieved while keeping costs down.”