The global connected device market is set to reach $6.2 million by 2020, growing at a compound annual growth rate of over 10%, according to new data from the Technavio ( research group.

In 2015, the Americas was the largest market for connected devices, accounting for almost 46% of the overall market share. Technavio’s report states that rapid advances in technology and changing consumer preferences regarding the use of electronic devices are the main factors contributing to market growth in this region.
The US accounts for the majority of the connected devices market in the Americas.

This growth is attributed to the implementation of the Green Buildings Act. This act covers the public, private, and non-profit sectors and aims to increase the energy efficiency and sustainability of buildings. The use of connected devices has reduced annual energy consumption in many countries. Some of the top manufacturing companies for connected devices such as Nest Labs, Honeywell, and Apple are headquartered in the Americas.

The connected devices market in the APAC [Asia-Pacific] region is still in a nascent stage, but is expected to grow substantially over the next four years. Countries such as Japan, China, and South Korea have the market potential to support the sale of IoT devices in the future. Connected devices will find many uses in the upcoming smart homes planned or under construction in these countries.

Smart thermostats and smart home appliances will likely find a ready market in these areas. In fact, several Chinese manufacturers are expected to establish a market presence during the forecast period, providing devices like smartwatches at a lower cost.

“APAC will post the highest growth rate in the global market during the forecast period, as the region will host the majority of smartphone, tablet, and PC owners. However, the contribution of the Americas and EMEA [Europe, the Middle East and Africa] will decline due to the maturity of the computing device market in these regions,” according to Sunil Kumar Singh, Technavio’s lead analyst from the computing devices research team.

In 2015, EMEA accounted for over 26% market share of the global connected devices market. Change in climatic condition and unseasonal temperature variations are the two main factors generating demand for smart ACs and smart thermostats in the region.

Meanwhile, the rising trend of smart homes is another major factor driving the demand for connected devices across Europe. Nearly 90% of the world’s smart homes are in Western Europe and the US. In Europe, countries such as the UK, the Netherlands, and Germany will grow to be market leaders in the future, but high initial device prices may restrain the adoption of connected devices in some segments of the market. Western Europe is also emerging as a major revenue contributor to the connected devices market in EMEA.