The 2026 U.S. Professional Smart Home Market Analysis from CEDIA and The Farnsworth Group puts a clear number on the residential technology market: $33.8 billion. That’s an impressive figure for the industry, but what’s more useful to look at is how and where those dollars are concentrated.
Turns out, home networking is the largest category in the report, accounting for 15 percent of the estimated U.S. market, or $5.2 billion. Distributed audio and lighting/shading follow at 11 percent each. Integrated control systems and media rooms are both listed at 9 percent, while dedicated home cinema, security systems, design services, recurring monthly revenue services, outdoor AV, access control, and dedicated listening rooms round out the category view.
Understanding that ranking provides the catalyst for a fundamental shift in how we’ve all been talking about the smart home industry. Rather than focusing the conversation on the products, the report tells us that we really should be talking about the infrastructure that makes every connected experience possible. The network is not a background utility anymore. It’s the foundation for entertainment, lighting, security, access control, shading, climate, voice control, remote service, and the growing number of AI-enabled or cloud-connected features entering the home.
Said simply: The smart home is becoming an infrastructure discipline as much as a product category.
Reliability Becomes a Design Requirement
When clients think about the smart home, they often picture control interfaces, speakers, displays, lighting scenes, cameras, shades, or theaters. Those are the things they see, touch, and use. But CEDIA’s data shows that the professional market is being led by the category clients are least likely to notice when it works well.
The last four words of that statement should change how integrators, designers, architects, and builders discuss technology early in a project. Connectivity can no longer be treated as a late-stage add-on or a problem solved by consumer-grade Wi-Fi hardware after the walls are finished. If a home is expected to support such a wide range of experiences, the network has to be planned with the same seriousness as electrical, HVAC, lighting, and structural systems.
We’ve made this point in a number of ways recently, arguing that terms like the “AV guy” are outdated and by addressing the identity problem that integrators seem to face.
This CEDIA report helps in our search for an answer through hard installation data. Among residential systems installed over the previous 12 months, home networking leads at 88 percent of firms. Integrated control systems and media rooms follow at 77 percent, distributed audio at 76 percent, security systems at 72 percent, outdoor AV and lighting/shading at 70 percent, dedicated home cinema at 69 percent, access control at 56 percent, and dedicated listening rooms at 31 percent.
In other words, networking is not only the largest market segment by dollars. It is also the most common system installed by the firms surveyed.
The Network Is the Gateway to the Whole Home
The whole-house integration data makes the infrastructure story even clearer. Among firms that installed integrated control systems, audio, home networking, and video are the technologies most consistently included in whole-house projects. The report also shows that larger firms and non-integrators are more likely to include lighting, security, access control, HVAC/climate, and voice control in those projects.
That points to a broader shift. Whole-home integration is no longer just about connecting AV zones to a control processor. It is about coordinating a growing set of systems that affect how a home functions day to day.
For designers and builders, that makes early coordination more important. A lighting plan, shade plan, camera plan, access control plan, outdoor entertainment plan, and home office plan may all depend on network capacity, device placement, power, cabling, rack space, wireless coverage, and service access. Poor infrastructure decisions can become visible later as lag, dead zones, unreliable control, delayed video streams, or systems that cannot be expanded cleanly.
For integrators, the opportunity is to position the network infrastructure as a design-enabling system. A well-planned network does not compete with interiors. It protects the homeowner experience and gives the project team more freedom to hide technology, simplify interfaces, and avoid compromises after construction.
Market Size Favors Firms That Can Handle Complexity
CEDIA’s report also shows a market that is not evenly distributed across firm size. Large firms, defined as those with more than 20 employees, represent about 15 percent of U.S. establishments but generate 43 percent of total market dollars. Small firms with one to five employees make up 65 percent of firms but account for 29 percent of revenue. Medium firms represent 20 percent of firms and 28 percent of revenue.
That does not mean small firms are less important. The report still estimates small firms at $9.7 billion in market revenue, which is nearly the same as medium firms ($9.5 billion). But it does suggest that larger, more complex projects and broader system scopes are concentrating revenue among companies with the staffing, process, vendor relationships, and project management capacity to support them.
Infrastructure plays directly into that dynamic. As projects expand from AV and control into every other area within and around the home, firms need to coordinate across more trades and more project phases. That favors companies that can document systems well, quote accurately, communicate with design-build partners, and support the home after handoff.
It also creates a challenge for smaller firms. They may be close to the client and strong at referrals, but the market is pushing toward broader system responsibility. For some, the answer may be specialization. For others, it may be deeper partnerships with electricians, builders, designers, IT providers, or larger integration firms.
Proposal Data Tells the Same Story
The report’s appendix includes proposal data that offers another view of what the channel is actually quoting. Networking has the highest proposal count of any category listed, with 63,806 proposals. Speakers lead by revenue at $124.9 million and 57,466 proposals, followed by TVs, receivers and amplifiers, lighting controls, networking, surveillance, and control systems.
The important point is not that networking outranks everything on every measure. In fact, it doesn’t. The point is that networking sits near the center of both volume and value. It’s a high-frequency category that touches nearly every other system.
The same appendix shows lighting controls at $69.6 million in portal revenue and 21,191 proposals, surveillance at $64.6 million and 41,869 proposals, control systems at $48.5 million and 30,440 proposals, signal distribution at $28.4 million, window treatments at $26.9 million, projectors and screens at $24.1 million, and power management at $22.3 million. These categories do not stand apart from the network. Increasingly, they rely on it.
That should shape how integrators present proposals to clients. A network line item can look expensive if it is treated as a standalone technical cost. It becomes easier to understand when it is framed as the platform that supports entertainment, security, lighting, shading, remote service, and everyday system reliability.
The smart home market may still be viewed through the lens of experiences such as music, movies, security, lighting, wellness, outdoor living, and convenience. But the market itself is telling a more grounded story.
Clients want homes that are easier to live in, easier to control, and easier to adapt. Designers want technology that does not disrupt the visual intent of a space. Builders want fewer late changes and fewer callbacks. Integrators want systems that perform reliably and can be serviced profitably.
All of that begins with infrastructure.
The best connected homes in 2026 are not defined only by the products installed in them. They are defined by whether the home was planned to support the digital life that will happen inside it. CEDIA’s data gives integrators a strong case for bringing networking, wiring, power, rack planning, wireless coverage, and service strategy into the design conversation earlier.
That may not be the flashiest part of the smart home. But according to the market, it may be the most important.
