A recent market research report has forecast the global smart home market to grow from its current value of $78.3 billion to $135.3 billion by 2025. The forecast takes into consideration the impact of the COVID-19 pandemic, which has curtailed the global supply chain of goods, including electronic devices.
The expected growth is based on the continued consumption of Internet-connected devices, the development of new smart home devices used for both convenience and security, as well as an increase in disposable income for certain demographic groups in some countries. Advances in artificial intelligence (AI), natural language processing and voice recognition technologies have spurred the demand for devices such as smart speakers like Amazon Alexa and Google Home. Hardware platforms such as the Z-Wave 700-Series are aimed at taking AI home speaker systems to the next level with more powerful features, including a 300-foot range.
This bigger picture is set within the current context of the COVID-19 pandemic, which has disrupted supply chains from manufacturing to delivery. The report also states that the ongoing trade war between the U.S. and China will affect the growth of the smart home market. Although uncertainty remains, global sales for the smart home industry are expected to decline by 5 to 10 percent this fiscal year. However, looking at the greater forecast period, the numbers for home Internet of Things (IoT) devices are still expected to climb and this holds true for Asia-Pacific countries where the demand for such devices is very high given the amount of new residential development that is on the horizon in countries like Japan, South Korea and China.
The proliferation of IoT devices entails challenges beyond just supply chain constraints. According to an ABI Research technology analysis report, there are forecast to be over 23 billion IoT connections globally by 2026—all of which will be under constant threat from cyber criminals. These threats will necessitate new cybersecurity technology to keep pace with the increasing sophistication in cybercrime. ABI Research expects IoT authentication services to be valued at $8.4 billion by 2026.
“There are several key technologies revolving around authentication security that currently transform the IoT device value chain. Chief elements among them revolve around IoT identity issuance, provisioning, authentication, encryption key lifecycle management, access management and attestation," explained Dimitrios Pavlakis, an industry analyst at ABI Research. These are the prime focus of IoT vendors that capitalize on the emerging threat horizon to better position their services and explore new IoT monetization models.
“As it currently stands, the IoT is not a secure place for future deployments, and both IoT players and digital security vendors are aware of that,” commented Pavlakis. “The good news is that the recent change in thinking has caused a noticeable mentality shift and investment surge for secure authentication technologies across the IoT ecosystem; the bad news is that this also gives rise to many IoT management offerings with questionable levels of security and intelligence.”
Concern over the rise of the IoT and increased cybersecurity is nothing new. In 2017 a survey of security experts worldwide by ISACA found that 59 percent of respondents were concerned about IoT-related security risks. This came just a year after 2016 was dubbed the “Year of the Smart Device.” The rise in IoT technology for homes and commercial use, along with the corresponding need for cybersecurity, has mobilized companies such as Intel, Microsoft, Amazon, GlobalSign and many others to deliver security authentication services with consumer-oriented pricing models.