Bold truth: 2025 proved that homeowners seek outcomes, not just gadgets, and the smart home industry reshaped itself around wellness, reliability, and seamless experiences. This is the core idea driving the year’s shifts, and it sets the stage for what happens next. But here’s where it gets controversial… did the industry move fast enough to deliver on those expectations, or did some early bets miss the mark? This rewritten piece revisits Kyle Steele’s insights from Global Wave Integration and expands on them with practical context to help beginners grasp the dynamics shaping today’s residential integrator market.
Overview
This article recaps the key observations Kyle Steele shared about the custom-integration channel’s trajectory in 2025. It offers context on how evolving technologies, changing customer expectations, and new business realities influenced residential integrators, with an eye toward what those trends mean for 2026.
Shifts in homeowner expectations and project demands in 2025
Homeowners in 2025 were no longer pursuing “smart homes” as a collection of devices; they expected intelligent, wellness-centered living environments. Clients now measured success by outcomes such as better sleep, reduced stress, and truly seamless technology integration. At the high end, projects grew into whole-estate ecosystems that unify wellness, energy management, entertainment, security, and aging-in-place capabilities. Artificial intelligence raised the bar by elevating learning and anticipation, making technology feel proactive rather than reactive.
Surprising growth and slowdown categories in 2025
The most unexpected development was how quickly clean power and energy resilience rose to the top of priorities. Clients now expect near-perfect uptime and reliability for critical systems. Traditional, checkbox-style automation declined in favor of AI-driven, wellness-focused solutions. In terms of growth, wellness technology outpaced entertainment, with offerings like circadian lighting and improvements in air and water quality gaining traction. Homeowners are investing in how a home makes them feel, not merely how it performs.
Major product launches and acquisitions that shaped the year
2025 marked a pivotal shift toward AI-driven platforms and next-generation infrastructure. Josh.ai introduced AI X OS, making context-aware automation mainstream and prompting a view of AI as a core component of system design rather than a novelty. Apex introduced a control-grade UPS platform, reframing power as a fundamental subsystem for lighting stability and reliability. AVPro expanded AV-over-IP capabilities, helping residential cinemas keep pace with commercial-grade performance. madVR Labs advanced AI-based upscaling and HDMI features, setting a higher reference standard. Taken together, these launches recalibrated expectations for what a modern integrated home should deliver.
AI adoption and workflow automation across the channel
AI became a frontline operational tool in 2025. It took over design documentation, proposals, communications, and diagnostics—tasks that used to take hours and now take minutes. Predictive service became standard, flagging issues before clients noticed them. As homes grew smarter, AI-driven configuration replaced heavy programming, dramatically improving workflows, timelines, and user experiences.
Technologies or trends that didn’t gain traction despite early interest
Standalone gadgets and isolated wellness devices failed to deliver value without true integration. VR and AR generated buzz but didn’t become part of daily living; homeowners preferred immersive lighting, audio, and environmental design over wearing headsets. Ultimately, anything operating in isolation rather than within a cohesive ecosystem struggled to stick.
Collaboration with builders, designers, and architects in 2025
Collaboration shifted to the early design phase. Architects and designers began expecting integrators to help shape the home experience from day one, incorporating circadian lighting, acoustics, clean power, and aging-in-place considerations. Shared AI tools helped align everyone on a single model, reducing friction and revisions. The outcome is a more intentional, cohesive home rather than a retrofit-driven one.
Lessons to carry into 2026
The central takeaway is clear: clients want better outcomes and experiences, not more technology. Clean power and AI are foundational, not optional upsells. The most successful projects emerged from early, holistic planning with architects and designers. In 2026, leadership will go to those who design for wellness, reliability, and simplicity while leveraging AI to elevate every step of the client journey.
Engage and discuss
As year-end reflections continue, CE Pro invites industry voices to share insights. If there’s interest in featuring your perspective, reach out to the editorial team. Do you agree with the emphasis on wellness and reliability as the future’s foundations, or do you see other forces reshaping the market? Share your thoughts in the comments.
