The connected toys market was valued at USD 5.8 billion in 2019, at a CAGR of 16% over the forecast period (2020 - 2025). In today’s technology connected world comprising of IoT and smart technology, these toys are expected to witness increased popularity. These toys make learning fun for children. These toys are equipped with voice-recognition technologies and typically use sophisticated sensor-based technologies to collect information and cloud platforms to process and interact with the user.
- The increasing adoption of educational toys among children is likely to drive the growth of the connected toys market. Parents are looking for products that can assist with the intellectual development of their children, thus, in turn, boosting the demand for such toys. For instance, CogniToys’ Dino uses Wi-Fi to stay connected and IBM Watson’s natural language processing technology to tailor its responses to suit a kid's age group and skill level. This toy can also teach children how to spell words.
- The connected toys market has experienced an increasing demand from smartphones enabled toys. Children are spending more time on smartphones and other gadgets, as compared to the amount of time they spend with their parents. This has led to manufacturers investing in smartphone-based toys, which leverage the capabilities of connected devices. For instance, SZ DJI Technology Co., Ltd., in 2018, launched Mavic Air, a foldable drone that uses hand gestures and smartphone applications to fly and record. Such innovations are expected to drive the market over the forecast period.
- On the other hand, kids are vulnerable customers as they do not understand how these toys work and the risks imposed by them. Thus, to overcome such security concerns, regulations are playing a critical role in achieving safe products. For instance, the General Data Protection Regulation (Europe) is extended to connected toys to increase citizens' control over the personal data., thus, creating a positive impact on the data privacy of these toys.
Scope of the Report
Connected toys primarily consist of a microphone and speaker, and an app to process the data. These toys offer a more personalized experience for children through embedded software that includes speech recognition software. Also, these toys can help parents keep track of the whereabouts of their children.
Key Market Trends
Smartphone Connected Toys are Expected to Witness Significant Growth
- Connected toys, also considered as smart toys come are available in various shapes and designs but all having one common element that is the connectivity allowing the children to interact with the toy through a smart device or smartphone.
- Owing to the rapid technological advancements, children’s toys are already computerized and connected to the internet and will continue to witness many more advancements in the near future. Moreover, an increase in the number of internet users coupled with the increased adoption of various hand-held devices like smartphones and tablets is driving the market across the globe.
- As artificial intelligence and robotics have become more affordable as compared to the past years, the technology has been incorporated into a wide range of children’s toys. This not only offers a new interactive experience to the children but also extends the life of toys with multiple features.
- Moreover, the upcoming concept of the internet of toys is also expected to drive the market. The market is also driven by an increase in disposable income among the middle-income groups and the rapidly changing lifestyles of people.
North America is Expected to Hold the Largest Market Share
- North America is expected to hold the largest share owing to the early adoption and increasing initiatives for connected toys, like Artificial Intelligence, and voice and speech recognition.
- According to the Canadian Internet Registration Authority report, in 2018, 52% of Canadians have five or more internet-connected devices in their homes. Thus, the increasing adoption of technology-enabled devices is likely to impact the adoption of connected toys in the region.
- According to the CEO of the Family Online Safety Institute (a nonprofit organization in the United States), connected toys are the latest frontiers of digital parenting as they offer ample opportunities for children to play, learn and interact.
- The vendors in the market are trying to make connected toys so sophisticated that they are able to adapt to a user’s actions and process information to itself from various sensors through the use of microphones, voice sensors, cameras, compasses, gyroscopes, radio transmitters, or Bluetooth. These internet-connected toys allow remote servers to collect useful data to power the toy’s intelligence functionality but privacy issues still remains a major concern.
The connected toys market is highly competitive owing to the presence of many big and small players providing their products in multiple geographies. The market appears to be moderately concentrated and the major players are adopting strategies like product innovation and mergers and acquisition primarily to extend their product portfolio and stay ahead of the competition. Some of the major players in the market are Mattel, Inc., Hasbro, Inc., Sphero Inc., Wonder Workshop, Inc among others.
- July 2019 - Bandai Namco launched a new platform, Tori, which will combine physical toys with mobile apps iOS and Android. Tori is the product of a strategic collaboration between Bandai Namco and the French technology firm ISKN.
- May 2018 - Lego Group launched a connected toy, known as Powered Up, and its first set in the series, an app-controlled Batmobile. This Powered Up line will help build and program the Batmobile. The new Batmobile can be controlled through two pre-built remote interfaces on the companion Powered Up iOS / Android app.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- Report customization as per the client's requirements
- 3 months of analyst support