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Trend Towards Smart Homes Leads Growth In Home Automation Systems

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Smart homes are fast becoming a reality. According to a market research done by Sandler Research the Zigbee Home Automation systems market is set to witness a huge growth in the next four years. The analysts forecast that the global ZigBee home automation market will grow at a CAGR of 26% during the period 2016-2020.

This is because of the rise in the number of smart home connected devices. The growth will come from the home automation systems markets in the developed nations. Many homes in such nations are being renovated into smart homes, wherein consumer electronic devices, media, and entertainment gadgets and other smart electronics are connected to the home network and can interact with each other.

ZigBee protocol which evolved in the early 2000 (between 2003 and 2008) is an Internet protocol-based communication system that creates personal area networks with small, low-power digital radios. It has become relevant in the recent years because of the emergence of IoT and the need for cost effective connected devices. ZigBee protocol is used in applications including wireless light switches, electrical meters with in-home displays, traffic management systems, and other consumer devices that work with short-range, low-rate wireless data transfer capabilities.

According to the research by Sandler in 2015, there were 111.5 million connected households worldwide, with North America having the highest penetration rate of 23%. Europe is the second fastest growing region in terms of the number of smart homes. APAC is still in its nascent stage. The market in APAC is expected to improve after 2018.

One device that has seen big adoption especially in a mature market like America is smart thermostats that analyse the cooling and heating patterns and also remotely monitor appliances to improve energy conservation. The industry watchers like technology research firm Technavio, claim that growth of ZigBee home automation market can be accredited to the rising need to minimize power consumption and subsequently energy tariff.

“The demand for electricity is growing, owing to rapid industrialization and rise in population. This is resulting in increased energy consumption worldwide.  In fact, effective and low power consumption is one of the drivers for the growth of smart appliances. Smart appliance manufacturers are pitching their products in the market on the basis of efficiency and economical utilization. Appliances account for 45% of residential electricity consumption. Planned utilization of electricity and the usage of ZigBee smart home automation help improve the consumers’ savings,” said Navin Rajendra, an industry expert from Technavio, specializing in embedded systems research.

Today, companies like Texas Instruments, Freescale Semiconductor, GreenPeak Technologies, NXP Semiconductors, Silicon Laboratories, STMicroelectronics, Atmel and Digi International, all part of ZigBee Alliance are working on developing Smart Home devices that are capable of understanding consumer behavior through self-learning algorithms and can adjust energy consumption accordingly.

“We are at a tipping point in the industry where the Internet of Things moves from an idea to real world application for consumers. Our experts already have been validating numerous technologies in support of the IoT, and we’re excited to bring the ZigBee Alliance programs into our testing and certification process as its members innovate to connect us all in new and better ways,” said Ghislain Devouge, Vice President, UL Consumer Technology Division. The company has recently joined the ZigBee Alliance, a global body that is working towards making the ZigBee Platform a base for smart home devices, and improve product experience for the end users.

Sandler’s ZigBee Home Automation market report also shows that consumers are looking for devices that take advantage of IoT, and pay per use concept, as well as on-demand services. If we are to look at the American user trend – a market tendency that generally trickles down to other regions globally – there is demand for greater access to the paid content such as Think Broadcast and cable on-Demand coupled with higher penetration of internet-connected content streaming devices such as video gaming consoles and Blu-ray players. Currently Americas dominates global ZigBee home automation market by accounting for around 64% of the overall market share.

According to the report, growing number of members in ZigBee Alliance will be a key driver for market growth. The market is expected to go on overdrive after 2020. The rapidly emerging IoT market worldwide is encouraging various industries to join ZigBee Alliance. The alliance provides global wireless standards. It aids member companies in developing products that are compatible with ZigBee-certified products. “As ZigBee Alliance membership continues to grow at an extraordinary pace, and member companies capitalize on the possibilities around the Internet of Things, we will continue to tap the world’s best testing organizations to provide our members with access to testing services that validate what they implement on a ZigBee-based platform translates into a meaningful and valuable product experience for the end user,” said Victor Berrios, Vice President of Technology, ZigBee Alliance.

As of 2015, the alliance comprises more than 400 members, working together to develop simple and easy-to-use ZigBee standards and products that define the IoT for use in consumer, commercial, and industrial applications. This number is expected to rise further with the growing popularity of ZigBee wireless technology over other OEM technologies.

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