Recent data from Statista confirms that the outlook for residential AV remains buoyant, with revenue in the worldwide smart home market projected to reach US$174.0bn in 2025, with the period from this year to 2029 expected to reveal a compound annual growth rate (CAGR) of 9.55 percent – yielding a projected market volume of US$250.6bn by 2029.
As might be expected from a part of the market where overarching control and connectivity is only becoming more critical, the amount of revenue from this area of technology will continue to grow – and constitute the largest single share of the market – through to the end of the decade. But in fact, there is a notable upward trend for all components of the modern smart home, including comfort and lighting and home entertainment technology. Meanwhile, North America continues to lead the way in terms of market revenue, but it’s noticeable that China is placing second – suggestive of a territory which will surely bring huge opportunities for vendors.
Neatly summarising the overall drift of residential technology, an analyst for Statista remarked: “Customers worldwide are increasingly seeking convenience, efficiency and connectivity in their homes. The demand for smart home devices that offer automation, security, and energy efficiency is on the rise. Homeowners are looking for solutions that can be easily integrated into their existing homes and controlled remotely through their smartphones or voice assistants.”
CONCEPTUAL CHANGE
Several distinct trends were highlighted during interviews for this article, but perhaps the most significant one is the increasing perception – by homeowners and companies active in the space alike – of home and working life as existing on one continuum. Consequently, more than ever it is expected that all technologies in the home be complementary and, wherever possible, unified in terms of control and management.
Stephen Rhead, Sonos Professional’s installed solutions manager UK and Ireland, sums up some of the main changes to have shaped the residential market since the Covid era. “During the pandemic, homeowners upped the ante with home entertainment and smart home technologies to support a more enjoyable domestic-based lifestyle, with working from home, not being able to visit the cinema, attend concerts and so on,” he says.
“Since the pandemic, our homes have increasingly become more multi-functional, supporting hybrid working and more at-home entertainment options such as music, box-office and TV streaming. [Additionally] we now have greater expectations when it comes to connectivity, convenience and functionality – whether that’s the AV tech for a home office with dual monitor set-ups or linking a laptop to a 95in TV screen. Installers make a massive difference in the quality of adapting spaces to meet the new needs of clients.”
But Rhead also suggests that the residential market is increasingly the subject of a tiered philosophy. “The concept of what is AV in residential is changing and becoming an almost three-tier system in terms of complexity and price: luxury, premium and DIY,” he says. “As a part of this tiered system, the DIY market is still growing quickly – which provides a superb gateway for a more premium, installed service. There’s still a huge market to tap into and we’re seeing more and more installers and smart electricians entering the residential sector, alongside the larger companies that have existed for years.”
OUTLOOK CHANGES
Matthew Kamp, senior director of product management at ADI | Snap One, highlights a change in consumer outlook since the pandemic: “The biggest thing is a shift in people’s mindsets from [advanced] residential AV being a ‘nice to have’ to being a ‘must have’. With people working more from home, there has been a drive for people to invest more in smart control systems with higher-end AV. The home is not just a home anymore; it’s become a place of work, [as well as] a place of entertainment and a place of living.” Hence there is an onus on technology that “allows you to bring all of these experiences together efficiently and effortlessly”.
If this is a market in the midst of profound transition, as it certainly appears to be, then there must be value in addressing some of the individual components of residential AV and control to ascertain some of the more specific emerging requirements.
With regard to residential video, a trend towards larger, higher resolution (eg 4K/UHD) and more sensorily-impactful (eg HDR) screens remain prevalent. More than ever, a high quality screen is the hub of domestic non-working life, albeit frequently supplemented by the use of smartphones and tablets for the purposes of accessing second-screen content and social media feeds.
There is, perhaps, more to say right now about the development of audio in the home, which has lately been the subject of several notable technological trends. On one hand, there has been an intriguing return to the old-time physicality of analogue audio, symbolised by the resurgence in vinyl. On the other hand, the availability of virtually every recording ever made through the rise of streaming services has dovetailed neatly with the emergence of immersive and spatial audio, which has already comfortably eclipsed the popularity of previous versions of surround audio such as 5.1. Moreover, there are also signs that homeowners increasingly want to bring the old and new musical ‘worlds’ together.
“Home audio is growing; you only have to look at the number of players that are now in the arena,” points out Rhead. “There’s a real eclectic mix of what goes on; for example, you’ve got people with vinyl turntables that stream at the same time and combine it all together. We cater to that, we sell turntables on our website, and we understand that there is no one way of listening to audio. It doesn’t have to be streamed from a streaming service; it can come in different formats.”
WORK & PLAY
Recognising that homes “now need to double as environments for work and play”, Sonos continues to “look ahead and figure out what is needed next, and what is required to maintain that.” Recent developments include a cloud-based app; the Arc Ultra Soundbar, which delivers the full Dolby Atmos experience in the home; and the Sonos Era 100 Pro speaker, which is a commercial product that also suits the home with PoE using a single cable. Rhead: “To complement the new Era 100 Pro, we have added new software into the speaker called zones, which offers the ability to create zonal audio within a business or a home, enabling users to listen to different audio in the bedroom from the living room.”
For ADI | Snap One, Kamp notes that audio has also been an important element of “people wanting to evolve their living space from inside to include the outside, so [outside] has become a large growth area for us. We have developed new combined products as well as solutions for surveillance”. Specific products include the Episode Radiance all-in-one outdoor music and lighting system – whose IP66 certified and UV-protected components mean the product can be “buried, mounted or placed” as required by the nature of the installation – and the Luma X20 PTZ camera, which incorporates AI analytics and auto smart tracking, as well as active deterrence to deter unwanted visitors and trespassers.
“Security cameras are a great example of a situation where people have moved more from a reactive state to a proactive one,” says Kamp. “And then, of course, there has been [a development in the expectations] around control in general, where people want to be able to manage and control their systems with things such as routines, schedules and predictive actions.”
CONTROL & SECURITY
Security precautions are at the top of the priority list for many residential customers in 2025. Once again, it appears that a paradigm shift has taken place over the past couple of years.
Michael Short, Crestron senior director of marketing operations and residential, suggests that. pre-pandemic, home control was popular amongst more expensive homes and “was definitely something that people were aware of – but probably not overly aware of”. But as soon as there was a shift towards more hybrid work, the need for better technology in the home became paramount, and people began to realise that they needed better infrastructure, networking and lighting.
On the working side, there arose a greater appreciation for what at-home quality video conferencing should be. “Obviously you’ve got the basics of webcam and microphones, but then [more advanced] control brings in lighting, shades, temperature,” says Short – all of these other elements that contribute to “what a home should be, and [much of that revolves around] comfort and convenience”.
By way of example, Short alludes to products, including the Crestron UC-MM30-R tabletop conference device, which pair an enterprise-grade speakerphone with native operation of the Crestron Home app, enabling complete integration with an existing Crestron Home system to provide lighting, shade, climate, media, security and camera control. He uses the system himself at home, configuring it so that “when I go into a meeting, I press a button and my lights come on, my temperature will drop slightly, and my shades go down if the sun’s coming through in the morning”.
ARTIFICAL INSIGHTS
Absolutely no prizes for guessing that there is one overwhelming answer when it comes to a question about the ‘next big thing’ expected to influence the residential market: artificial intelligence.
“You’re probably going to get this answer from everybody, but yes, it is AI,” confirms Short, who goes on to identify two primary areas of interest for residential applications: “The initial benefit I see is in delivering better insights and support to our dealers and installers [through] supporting AI on the back-end. Further down the line, I think the benefits will come to the end-user when we start to think about how all the disparate devices and all the data that comes into the smart infrastructure can be utilised to deliver better experiences?”
For instance, contemplate the combination of a personal health tracker and AI-enabled home devices and control systems. “It could tell you that your sleep pattern is currently disrupted and it believes that this is because your shades are coming up too early and therefore you are losing a bit of sleep. That kind of smart interaction where all the devices are talking to the core platform in the house to deliver insightful options [is really exciting].”
In short, these are hugely eventful days for the residential AV industry. Long-term growth seems assured, even with the present unpredictable economic cycles, and vendors are finding strong interest in audio, video and control systems that support every facet of our work and non-work lives. In addition, the home is also proving to be an invaluable testing ground for new technologies, including those that will help keep us safe in an increasingly hostile cyber environment.
There is certainly plenty of reason to regard the residential market as the new frontline for AV. Add to this the ongoing growth of ‘resimercial’ and ‘prosumer’, and residential AV’s importance to the AV industry as a whole is plain for all to see.
