Smart Home Strategies

Assesses the opportunity for home energy management, control, security and other emerging smart home systems and services.

February 25, 2014 18:54 wablondi

The Internet of Things (IoT) has become a buzzword of the connected home space which includes all things smart for the home. The 2014 CES was a perfect example with elegantly designed point solutions from light bulbs to door locks and surveillance cameras on display at every turn. Even before CES Bosch announced the formation of a new company, Bosch Connected Devices and Solutions, that will supply electronic components and software designed to add intelligence to and web-enable a wide range of devices. It will initially focus on sensor-based applications for the smart home.

Why Bosch? Robert Bosch GmBH is a global supplier of MEMS sensors – devices that measure acceleration, air pressure, noise, or temperature, etc. These sensors can be programmed using software algorithms and equipped with microcontrollers, miniature batteries, and tiny radio chips, to enable them to process measurements and trigger actuators and communicate with other devices over the Internet. Therefore, it makes sense Bosch would join the party.

Recently (February 5-6, 2014), the company conducted its Bosch Connected World Conference 2014 in Berlin. SA was in attendance and was impressed by the company’s commitment to the IoT market and specifically the Smart Home market. Dr. Volkmar Denner, chairman of the board of management of Robert Bosch, provided a crisp overview of Bosch’s strategy in the very broad and sometimes convoluted world of IoT. (Download the presentations here) He also reviewed the partnership Bosch recently established with ABB, Cisco and LG for an open platform for smart home solutions. This and Qualcomm’s AllJoyn initiative, among others, are the focus of SA’s Smart Home Strategies’ continuing analysis of technology enablers in the emerging Smart Home market.

One of the most stimulating presentations for us was given by Prof. Dr. Karolin Frankenberger, assistant professor for innovation management at the University of St. Gallen. She reminded us that many of the big successes of the past are based on innovative business models; not on innovative products. Examples include Apple, Amazon, Skype, Netflix and Blacksocks… Blacksocks???? Download the presentation (same link as above) it’s worth the time J

Bottom Line: In the future competition takes place not between products or services, but between business models. And Bosch is positioning itself to enable new, innovative and likely disruptive business models in the Smart Home market… Stay Tuned!


January 21, 2014 20:40 wablondi

The Internet of Things (IoT) was the buzzword for all things smart for the home at the 2014 CES. Elegantly designed point solutions from light bulbs to door locks and surveillance cameras were on display at every turn. Qualcomm, Samsung and Technicolor wowed audiences with their visions for the Smart Home while Lowe’s and Staples showed off how they are merchandizing it in their stores. AT&T Mobility focused much of its attention at its Pre-CES Developers’ Forum on connected cars, but allocated significant time to cover Digital Life and its successful rollout.

Samsung led the charge of companies targeting the smart home market at the 2014 CES with a pre-show press conference that left little doubt about its intentions to enter the market. Smart home devices and services shared center stage with curved, 4K TVs and connected cars. Clever, single-functions devices aimed at DIY’ers are bound to whet appetites for more capable integrated solutions; thereby stimulating the broader smart home market. Overall the show provided a great warm-up performance for Google’s announcement days later that it would acquire Nest for $3.2 billion. See Google Buys Nest - Enters Smart Home Market ...Again!

If the introductions and developments during 2013 were not convincing enough, then the smart home announcements and demonstrations at the 2014 CES should convince even the casual onlooker that the era of mass market home automation is upon us.

Some highlights:

  • Samsung charges into the Smart Home market
  • AT&T brings down the wall around their Digital Home garden
  • Lowe’s and Staples show how to merchandize the Smart Home at retail
  • Qualcomm aims to cover the Smart Home with its AllJoyn Umbrella
  • Technicolor offers its Qeo as an alternative to other peer-to-peer communications solutions
  • Nest is cool …obviously, but don’t count out Honeywell
  • Door locks from whom?
  • Light bulbs for the dorm room from Lumen
  • Blacksumac, Canary and DoorBot revamp in-home surveillance cameras

Check out full Smart Home coverage at CES 2014: Internet of Things Enters the Home.


April 4, 2013 15:39 wablondi

I recently attended a Webinar presented by Rob Chandhok, President of Qualcomm Internet Services, which provided an overview of how Qualcomm’s Innovation Center open source subsidiary, is evolving the concept of the Internet of Everything beyond cloud connectivity via its AllJoyn open-source application development framework. In a nutshell, AllJoyn facilitates ad hoc, proximity-based, device-to-device communications among products from any manufacturer, running any operating system. However, as Rob pointed out, machine-to-person (M2P) communications might be a more apt description for the process because a human is involved in the link at some point.

My interest, of course, is from the Smart Home perspective, but the technology has applications in the automotive and enterprise worlds as well. I’ll let my colleagues cover those. I had heard about AllJoyn about 9 months ago, but it’s been around since 2011. At the recent Mobile World Congress Qualcomm announced it’s adding services designed to address fundamental use cases. The Webinar covered these with some interesting examples that started to help me understand what AllJoyn is and how it might impact smart home developments.

The first batch of services which will be available later in 2013 will include:

  • Onboarding – a ‘headless’ or other simpler smart device can easily be configured via an intermediary, such as a smartphone application, for use on a user’s personal network. People will then be able to communicate with devices without displays via the displays they already have available. For example, the smartphone recognizes the various smart devices within its range – perhaps a thermostat, refrigerator, coffee pot or light switch – allowing the user to communicate and control them from the smartphone.
  • Notifications – enabling a standard way for devices to broadcast and receive text, image and multimedia notifications. When the oven hits the desired pre-set temperature perhaps an inspiring tune begins to play on the audio system instead of just a text message or ringtone. Or a washing machine could send a text to an Internet-connected TV to inform the viewer that the wash load is unbalanced.
  • Audio Streaming – facilitating an interoperable, open, wireless audio streaming protocol that allows users to stream their music across products from any manufacturer.
  • Control – allowing smart devices and appliances to export their control interfaces, including rich graphical elements associated with them. A dishwasher’s controls could be displayed on a smartphone or tablet complementing its own control panel with a richer UI.

Qualcomm is not intending to go it alone in developing AllJoyn. It is forming an AllJoyn Alliance of companies interested in using the technology to work together to develop the framework with an eye to develop an open standard for interoperability. All of this will take some time so I don’t expect to see commercialization happen for a few years, but appliance, CE and control systems manufacturers should check out AllJoyn. It claims a very low-cost BOM with very little memory and processing requirements.

More information is available at: https://www.alljoyn.org/


March 6, 2013 20:43 wablondi

In 2012 activity continued in the Smart Home market in virtually all regions of the world. In Europe IFA Gigaset introduced its DECT ULE-based “Gigaset elements” sensor network at IFA. Swisscom launched its previously announced Quing Home automation system. UK smart home platform developer AlertMe announced its partnership with Essent, part of the multi-national RWE group, in launching E-Insight, a cloud-based “Smart Energy” service to Essent’s 2.4 million customers in the Netherlands.

Deutsche Telekom continued development of its Qivicon ecosystem; British Gas launched its Remote Heating Control and Safe and Secure services (also built on the AlertMe platform) and SFR launched its Home by SFR IP-based home security system.

In the US cable MSOs Bright House, Comcast, Cox and Time Warner initiated/continued their rollouts along with Verizon, Ingersoll Rand’s Nexia, ADT’s Pulse and Vivint, one of Alarm.com’s most prominent dealers (they have 5,000+).

At the 2013 CES event Technicolor demoed Qeo, Arrayent revealed its partnership with Whirlpool, Lowes’ showcased its growing ecosystem, ADT entered the remote health management market in partnership with IDEAL LIFE and AT&T emphasized its commitment to Digital Life at its developers’ conference and followed that up at Mobile World Congress with its announcement that more than 30 companies worldwide have asked to license Digital Life.   

This type of activity is a positive sign that the smart home market is developing, but it begs the question: “Who is interested in AND willing to pay for these capabilities?” Next up: “How much are those who are interested willing to pay?” Strategy Analytics launched a survey in 4Q 2012 to seek answers to these questions and examine the attitudes and behaviors of those consumers who have already acquired smart home solutions, as well as, those indicating an interest in and willingness to pay for them.

It’s All in the Attitude

More than 6,500 consumers in France, Germany, Italy, the UK and US were asked to rate their agreement to a series of statements characterizing their attitudes and behaviors likely to influence use and/or adoption of selected smart home systems and services. Respondents were then asked if they had a variety of smart home capabilities and/or services from professionally monitored security to remote digital healthcare services and energy management services.

If they did not have the capabilities or services, they were asked how interested they would be in acquiring them if free; those most interested were then asked what is the most they would be willing to pay if these were paid-for services.

Several analyses were prepared from the results and the first, an overview of results was published in Smart Home Systems: Consumer Attitudes and Adoption.

We didn’t stop there. We prepared a segment segmentation analysis on the results …one for Europe and separately for the US (we do have our differences  J).  

Bottom Line: Impressers (those whose lifestyle impresses others) and Affluent Nesters (higher income households that invest in improving their homes) are the largest groups of early adopters and Convenience Seekers (young males willing to pay for convenience) show high interest and willingness to pay.


December 13, 2011 10:53 wablondi

It’s great to have well-read and connected colleagues. Ed Barton, Director, Digital Media Strategies at Strategy Analytics, pointed me to a new product being developed by a couple of MIT Media Lab graduates called Twine. It’s a small Wi-Fi hub (2.5” square and just a little thicker than a pencil) connected to internal and external sensors that notify users when a sensor has been tripped. For instance, a text message could be sent to a homeowner when the device senses moisture in the basement. All one needs is Wi-Fi connectivity. Twine has a cloud-based service with a web app that allows non-programmers to set up simple rules about when and how to be notified. Twine will ship with two built-in sensors (temperature and an accelerometer for vibration, impact, and motion detection). Additional sensors include a magnetic switch for use on doors or other moving things and a moisture sensor. There is an expansion jack to connect up to three other types of sensors on each device. Other sensors are being planned. The developers claim that the device will run on two AAA batteries for months and will notify users when they need to be changed.

Finished products are planned to be available in March 2012 – no price listed, but from the description on Kickstarter, a crowdfunding site, where the developers have raised over $250,000 (well more than their original goal of $35,000) a pledge of $99 will get you one. You can read more at Fast Company's Co.Design or at Kickstarter.

Based on some of the comments on the Kickstarter blog some people are concerned about what the user interface will look like and if it will be really easy to us. My guess is the developers, David Carr and John Kestner, will address that issue. They incorporated a “programming” tool called Ifttt.com (stands for “if this, then that”) to set rules like: If sensor gets wet then tweet “Basement is flooding”. This seems to be a good start …we’ll see where it goes.

But let’s suppose that the developers get it right …make it very easy to use, affordable enough so you can have several around the home turning everyday things into Internet nodes communicating with whatever is useful. That’s pretty cool, but what’s the long-term business model? Selling devices for $99 with additional revenues for add-ons is straightforward, but may miss larger opportunities involving recurring service revenues.

One example of a service-based revenue model could be an appliance or HVAC installation and maintenance firm installing Twine devices with sensors that monitor the status and performance of appliances, heating and cooling systems. Sensors would collect and transmit operational data to a cloud-based analytic algorithm and notify homeowners and the maintenance firms when something is not operating properly. The service could be part of a maintenance agreement or extended warrantee offered through manufacturers. Other business models come to mind for broadband service providers and home security service firms. 

The fact that Twine builds on the Wi-Fi ecosystem will be important to its long term success. Strategy Analytics estimates that globally there are currently 260M Wi-Fi home networks; by 2015 that number will more than double. This is a big target market to address and because of that I suspect lots of clever people will come up with ideas about how to use Twines. In fact that’s what the developers had in mind from the outset.

I was trying to figure out what the name Twine means or how it applies to the device. Rather than come up with my own story, I sent a note off asking the developers and John Kestner wrote back:

“Bill, I think whatever your imagination comes up with is equally valid. That's why we made Twine in the first place, after all - we can't think up all the cool things you might do with it. We wanted a simple, visual name, and maybe one that suggested its compatibility with Twitter. My wife suggested Twine, and we liked how that described a product that ties the physical and digital worlds together, so there you go.”

Bill Ablondi

Client Reading: Smart Homes: Why Now?; Home Energy Management: Is It Real?


November 17, 2011 16:30 wablondi

I was pleased to see Best Buy launch its Home Energy Management department in three stores in the US recently: Chicago, IL San Carlos, CA; and Houston, TX. Those of you following the HEM market know that Best Buy has been working with partners on trials of this concept for a couple of years. In addition, they have done a lot of research to understand what can motivate consumers to buy energy management solutions beyond saving money …even though saving money will be enough for some. The company is leading with energy management, but they are also offering products for home control and security. They see smart home technology applied to energy management as an extension of their traditional CE business and one which leverages their Geek Squad.

Energy management systems are a subset of home control systems which over 10 years ago. At the time, whole-home control systems were only for the wealthy, given that a typical system cost $30,000 and UP!  There have also been basic do-it-yourself lighting and appliance controls available for decades. Some of the early DIY systems were affordable, but not reliable. These were used by a group of people who are among the first to adopt new technologies I call “Thrill Seekers.” Thrill Seekers are people willing to invest time and energy to get something to work …even if it’s not ready for prime time, and are thrilled when it actually does work. Most of us are not thrill seekers.

Thanks to numerous clever technology advancements over the years much more affordable, reliable and capable control systems were introduced into the market. Still, adoption has remained in the single digits in terms of household penetration …in the US as well as elsewhere in the world. Why?

The answer to this emerges as we consider the factors affecting the adoption of any innovation, from hybrid seed corn by farmers to smartphones. In fact, it was studying adoption of seed corn by farmers that prompted Everett Rogers and F. Floyd Shoemaker to identify key factors in their book Communication of Innovation (The Free Press, 1971). Others have followed including Geoffrey Moore in his 1991 book, Crossing the Chasm. One of the factors identified by Rogers and Shoemaker that jumps out at me when I think about Best Buy’s efforts with its Home Energy Management department is “Demonstrability” … people have to “see” what the innovation can do for them. Demonstrability is what retail is all about. Displaying products on shelves so we can see what’s available and providing an environment where we can learn if the jacket, shoes or energy management solution fits is what retailers do.

Best Buy is not alone in building awareness and educating consumers about the benefits of smart home solutions. Also in the US, Verizon recently rolled out its Home Monitoring and Control service; in Canada, Rogers Communications launched a similar offering this year, but packages it with a professionally monitored security service. Next year Deutsche Telekom will roll out its Smart Connect service in Germany. These are just a few of the activities building awareness around the world of the capabilities and benefits of smart home solutions.

So when will smart home solutions including energy management systems become commonplace? Stay tuned, that’s the forecast we’re working on. An interesting discovery by scientists who are members of the Social Cognitive Networks Academic Research Center (that’s a mouthful) at my alma mater, Rensselaer, is that when only 10% of the population firmly believes in something, their belief will be adopted by the majority.  If this finding stands, the implications are vast – from the spread of political ideas to innovation. The efforts of Best Buy and others are clearly making energy management a real business opportunity.

Bill Ablondi

Client Reading: Smart Homes: Why Now?; Home Energy Management: Is It Real?


November 14, 2011 07:56 dmercer

I think I must amaze some of my younger colleagues when I show them one of our ancient hard copy multi-client studies, a few dusty samples of which I keep stacked away in a cupboard in my office. The fact that a research report can exist on paper alone takes some getting used to in this online era.

 I have little cause to refer to them nowadays, of course, but that changed recently when Strategy Analytics decided to renew its focus on smart home. Back in 1986, shortly before I joined the company, it published a study called “The Interactive Home”, so I was curious to see how some of those predictions stacked up with the benefits of 25 years of hindsight.

 

Sure enough, we talked about the concept of “smart home” in that report, largely in the context of home automation, management and security. We noted in particular that in Germany “there seems little or no coherent drive twoards realisation of ‘Smart Home’ concepts at present”. A key obstacle was the high levels of rented and apartment accommodation, which reduced the need for automation and security systems. The conclusions in the UK also make interesting reading: we identified a “growing body of serious PC owners” who would “help open up the information-related interactive sectors”, as well as opportunities in interactive television and electronic publishing. The study also concluded that “energy telemetry” was “likely to emerge as a prime investment area in the early 1990s”.

 

The study had a 10-year forecast horizon, which is fairly ambitious compared to regular analyst reports. We may laugh now at a forecast of what would happen in the late 1990s, but that seemed as far off in 1986 as the 2020s seem today. And in fact, as so often happens with emerging technologies, while the long-term scenarios were broadly correct, the future timing of events was misunderstood. And in general the report was over-optimistic in terms of predicting the speed with which new “smart home” services would emerge as mass market opportunities.

 

Given those past uncertainties and false dawns, the question posed by my colleague, Bill Ablondi, is right on the mark: “Smart Homes: Why Now? He identifies a number of reasons to think that we may not have to wait another 25 years before true interactive home technologies become widespread, including:

 

·         Consumers becoming increasingly connected via mobile devices  

·         Broadband service providers need to develop additional revenue generating units (RGUs) to offset declining growth in traditional businesses  

·         Expansion of offerings from traditional home security systems providers into self-monitoring and control products and services

·         Introduction of affordable, retrofit solutions that can enhance lifestyles, safeguard homes and reduce home operating expenses

·         Manufacturers of appliances and home systems desire to differentiate their offerings and expand their opportunities

·         Government incentives and mandates to reduce energy consumption by connecting residential customers to advanced electricity distribution and management systems

 

In other words, some high value industry sectors are getting serious and see that many pieces of the smart home jigsaw are lying around waiting to be put into place. Key barriers remain, of course, not least persuading consumers that there is value in these systems and services. That’s a key set of questions which our new advisory service, Smart Home Strategies, will be exploring over the coming weeks and months.

 

David Mercer

 

Client Reading: Smart Homes: Why Now?