Analyst firm Berg Insights forecasts that the number of smart homes in the U.S. and Europe will reach 36 million by 2017, with sales of $9.4 billion per year. The second edition “Smart Homes and Home Automation” report indicates the U.S. had 3.5 million smart homes at the end of 2012. Berg defines smart homes as those with connected products that work in conjunction with apps or a Web portal. However, most of today’s smart homes simply include products such as a Nest thermostat.

According to GigaOM, Berg divides the market into six categories: “energy management and climate control systems; security and access control systems; lighting, window and appliance control systems; home appliances; audio-visual and entertainment systems; and healthcare and assisted living systems.”

At some point, the energy and climate control systems will probably combine with the lighting and appliance control category since the two are so connected. And the article asks how automobiles will play into these systems.

Health and assisted living is likely to remain its own category, despite the emerging trend in connected fitness trackers.

“Any truly medically necessary device is going to come from the doctor and not the consumer market in the near term, which means that for aging Americans we might see smart homes rise simply because their doctors and concerned children force it onto them,” notes the article.