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Double digit growth expected for home automation +MORE

A factor working in favour of the global home automation market currently is its ability to promote energy conservation and manage overall energy consumption in a home.

Rising at a robust CAGR of 26.3 per cent during the forecast period of 2014 to 2020, the opportunity in the home automation market is estimated to reach US$21.6 billion by the end of the forecast duration.

By type (mode of entry), the segment of luxury automation (custom) systems is projected to remain at the top until the end of forecast period of 2014-2020 in terms of demand. By application, the segment of safety and security is forecast to register a strong CAGR compared to other application segments such as lighting, HVAC, entertainment, and energy management.

Subject to some critical restraints being resolved, the global market for home automation may witness exponential growth, with the average annual growth exceeding 70 per cent. Some of the favourable factors driving the market for home automation are energy efficiency, growing connectivity via the internet and mobile devices, the introduction of managed home automation, rising awareness regarding energy conservation, and the ability to manage energy consumption through automation technologies.

The absence of a dominant player and the growing presence of several new players in this market has led to competitive prices being offered to end users, which is further fueling the market for home automation.

The global market for home automation faces challenges from a few underlying but inevitable factors, such as the impending need to develop universal solutions, a lack of consumer awareness and technical know-how, a short battery life of wireless controls, and the requirement of specialised software to manage home automation services. Some of the other factors limiting the growth of the global market for home automation are low consumer awareness, costlier solutions, the need of solutions on a one-size-fits-all model, and perceived security and health risks.

Many opportunities exist in the market for home automation, provided the concerns discussed above are addressed. Currently, the penetration of home automation is less than one per cent worldwide and any attempt to achieve a larger audience can open up new avenues. Home healthcare automation is one such potential market.

The global home automation market is dominated by four players who account for 50.9% of the market in 2013, while rest of the market is highly fragmented between numerous regional players. The top four players are Crestron Electronics, ADT Corporation, AMX LLC, and Johnson Controls. There are specialised players in the home automation market too, operating under specific revenue segments and expanding their product-line depth and width. The strategy behind this is to provide consumers with a comprehensive product mix and at the same time safeguard themselves against possible market risks associated with each application segment.