For years, the smart home market has been in a state of flux, promising a future of seamless usability but often delivering a confusing array of hardware and rising costs. Early adopters often became frustrated troubleshooters, grappling with incompatible devices and a confusing array of apps. Now, thanks to the latest developments at IFA 2025 in Berlin, this narrative is taking a turn for the better. There is a renewed sense of promise that this sector can take positive steps forward to become the seamless part of our lives we imagined it would be when we first uttered the words “Hey Google”.
This year’s event provided us with a real insight into the direction some of the biggest players in the sector are heading and the consumer trends they are tapping into. The focus has shifted from novelty to genuine utility, addressing the friction points that held back mass adoption. The market is moving from a collection of gadgets to a cohesive ecosystem.
The UK Market and Key Trends
UK interest in the sector has remained strong, even though initial momentum has plateaued. Ownership of smart products has doubled in the past five years. Knowledge of products is a key factor in the market, and around 80% of UK households have at least one smart home product.
A big part of further adoption is devices that are able to operate with other products, be it other device categories or brands. Matter, the open-source protocol that enables devices from different brands to seamlessly interact, has been a slow burner since its 2022 release. However, its growing importance is as critical to the category’s future as ever. It operates over Wi-Fi and, crucially, Thread, a low-power mesh network where each new device strengthens the entire system’s reliability and speed. Virtually all major brands, including smart lighting partners like Philips, revealed enhanced Matter support in their products at IFA 2025. This move reaffirms their commitment to the protocol and highlights its benefits.
Alongside this element, new AI features are also expected to drive a new wave of smart home interest, as Google has scheduled a Gemini for Home rollout for later this year. The era of the simple, reactive voice assistant is ending, replaced by proactive partners that can handle complex requests like, “Plan a dinner menu based on my smart fridge’s inventory and start a cooking playlist.” At IFA, brands like Aqara showcased AI capabilities for their security cameras, enabling them to better detect people or motion, delivering those insights to the user. The new generation of smart assistants aims to enhance task completion and responsiveness. They are also designed to be more conversational and interactive.
Smart Home Security
The trend in security is about being Proactive and AI-powered. Instead of just passively recording events, modern systems use on-device AI to actively identify specific threats and take deterrent action. This intelligence transforms security from a reactive tool to a preventative one.
The smart home security market is valued at £31.9 billion in 2025 and is projected to grow to over £114 billion by 2034, showing a strong CAGR of 15.31%.
The Google Nest ecosystem serves as a prime example of this intelligent security. The Nest Cam and Nest Doorbell use sophisticated on-device AI to differentiate between people, packages, animals, and vehicles, ensuring users only receive important alerts. This on-device processing also means faster notifications and enhanced privacy. A key feature is Familiar Face detection, allowing the system to learn who belongs at your home, so it can specifically announce on a Nest Hub or speaker when a family member arrives, or if an unfamiliar face is at the door. This deep integration is key; a motion alert from a Nest Cam in the garden can automatically display its live feed on the Nest Hub in your kitchen, providing immediate context without you needing to reach for your phone.
Smart Lighting
The market has moved beyond simple colour changes to focus on Human-Centric Lighting. This trend is all about wellness, with systems automatically adjusting the colour temperature of light to support the body’s natural circadian rhythm.
The global smart lighting market is valued at approximately £27.2 billion in 2025 and is projected to reach over £100 billion by 2032. Affordability was also a focus at IFA, with 35% of UK consumers saying that their smart home adoption is hampered by higher costs.
Trending Products:
Philips Hue: Remains the market leader. Its popularity is currently being boosted by wellness-focused products like the Philips Hue Twilight sleep lamp. In a move to address costs, the brand also brought in a new range of lower-priced bulbs starting at £25, which importantly support Matter over Thread connectivity to drive new user adoption.
Nanoleaf: Very popular for its aesthetic, modular light panels like Nanoleaf Shapes. The brand has gained ground by being an early adopter of the Matter and Thread protocols, making its products exceptionally fast and reliable.
Govee: A fast-growing competitor, especially popular with gamers, driven by vibrant, customisable products like the Govee Curtain Lights at an accessible price.
Wearables In Focus
The trend for personal tech has also evolved significantly. Wearables have transformed from fitness trackers into Personal Health Hubs. The focus is on advanced health monitoring and providing actionable insights for sleep and recovery.
The global wearables market is valued at an estimated £165.7 billion in 2025. While smartwatches are the biggest segment, smart rings are the fastest-growing category.
Trending Products:
Pixel Watch: The Pixel Watch’s Wear OS platform is the intelligent software powering a range of smartwatches. The flagship example is the Google Pixel Watch, which combines helpful Google features like Maps, Wallet, and Calendar on your wrist with deep health integration from Fitbit. It excels at providing a holistic view of your wellness, tracking everything from daily steps and heart rate to advanced sleep analysis with a daily Sleep Score.
Oura Ring: The leader in the smart ring category. The Oura Ring is popular with users focused on sleep quality, using metrics like HRV and body temperature to generate a daily “Readiness Score.” It syncs with Google’s Health Connect, allowing its data to contribute to a user’s overall wellness picture.
Convenience, Savings, and Privacy
One of the biggest draws of smart home technology is the convenience it offers. This sentiment is echoed by industry leaders, who state that “The AI Home isn’t about building a sci-fi house of the future, it’s about those simple wins that make life easier”
This ability to centralise management of devices allows for greater energy efficiency, allowing for utility cost savings which touch upon strong customer sentiment. Since heating accounts for about 55% of household energy use, smart thermostats can learn user habits and adjust heating schedules, potentially saving owners hundreds of pounds a year. This extends to smart plugs, cutting power to standby devices and appliances running during cheaper, off-peak hours.
As these systems integrate into our lives, privacy has become paramount. In response, the industry is shifting to on-device processing, where powerful chips inside devices like a Google Nest Cam analyse data locally instead of sending it to the cloud. This keeps personal data within the home, enhancing privacy and response speed. Brands now compete not just on features, but on their commitment to transparent security policies, a key factor in purchasing decisions.
With the UK smart home market set for an annual growth rate of 10% through to 2029, up to around £14bn, there is a huge market for brands to get involved with if they can marry up their products and ecosystems to the key consumer trends. The real promise is a convenient smart home that works seamlessly, saves money, and respects user privacy.
To read the published article by Rupert Cook, Marketing Director, please visit ERT











