Smart Homes See Tech Strides and Marketing Challenges
Given the chance, would you automate your home? If the answer is yes, then you agree with 46% of consumers, who, according to an HGTV survey, indicate that home automation features will be important in their current or next homes. The race to tap the market for smart homes is becoming increasingly competitive as a new generation of wireless home-gadgets takes shape. The home of the future, by every indication, will be one filled with sensors designed to make our lives easier. Take Google’s Nest, a company known primarily for it’s advanced thermostats and smoke detectors. Its partnership with Mercedes-Benz will promote communication between the vehicle and the at-home device. When the user gets close enough to home, Nest will automatically begin cooling or heating the home to the desired setting. This is one of many examples of recent innovations designed to save power and spare user input. New tech developments in the realm of smart homes look promising. Smart batteries, Bluetooth controlled lights and integration of voice-recognition into Nest and Apple’s HomeKit are in development. But despite all these recent developments and inevitable future releases, there already exists an abundance of home-automation technology in the market. There are an estimated 60 million units currently in the market, according to research firm IHS. By 2018, this number is expected to climb to 190 million.  However, a front-runner has yet to emerge in the smart home market, which, according to Samsung vice president Eric Anderson, is “fragmented.” Google, Samsung, Apple, GE, and a variety of start-ups are racing to roll out the next major innovation. San Francisco Gate reports that Samsung and Google each struggle with different aspects of developing an integrated platform for success in this market. While Samsung is recognized for its ability to design hardware and home appliances, it lacks the same reputation as a programming/software designing company. Google has the opposite problem – it is recognized as a programming and app building company, but not as much as a hardware designer. Meanwhile, smaller start-ups struggle to avoid being overshadowed by larger companies. LittleBits, for example, is a three-year-old company that just released a DIY smart home kit that allows the user to essentially “hack” into any home appliance and automate it. The company’s CEO, Ayah Bdeir, told BusinessWeek that the electronics “remains a very top-down industry that is very much controlled by large companies, by experts, by engineers.” In this ‘fragmented’ market, then, what will be the key for the dominant player to emerge. Ben Kaufman, CEO of his start-up, Quirky (partnered with GE), told Fortune that education and marketing outreach will be key factors in helping ease the idea of smart homes into the minds of the consumers, who have been somewhat reluctant to accept the notion of automated homes. He argues that many only see smart homes as being for “tech nerds, early adopters, and rich people.” Kevin Foreman, director of product vision at Vectorform, believes that the key is also presentation. He tells Wired, “to date, the smart home lacks a killer app to drive these experiences but once this is made available, consumer adoption will skyrocket.” He believes that this will come in the form of an app that provides real-time feedback on connected home appliances. Others still believe that devices that act as a command interface for all of a home’s tech devices, such as Amazon’s newly released Echo speaker/microphone, will advance this market by simplifying the increasingly complex network of connected devices in ones home. The number of IoT (Internet of Things) devices – everyday items able to send and receive data through network connectivity) – is predicted to rise from 0.9 billion in 2009 to 26 billion by 2020, according to Gartner, Inc. This will easily exceed the number of smartphones, tables, and PCs connected by 2020 (an estimated 7.3 billion). Management of these connected devices will surely become one of the world’s most important industries. Regardless of whichever companies rise to the top of this industry, their development in the market and, in particular, how they connect with consumers, will be a fascinating spectacle to watch unfold.

  • Richard

    I agree. A wise businessman in the Caribbean named Sir Kyffin Simpson always said that the key to success is progression and humility, and clearly he’s done very well for himself as a self made man!

  • John Andrews

    The Airgain IPO launches this week, and they’re a one-brand company.

    Some investors don’t think it’s a good stock though:

  • Cincinnati World Cinema

    Well said, Joe, and worth rereading on a regular basis! Another advantage of small-to-midsize city living is pace and competition. Living in NYC, LA and SF entailed a hectic pace, hallmarked by capital S striving, as one realized there were a ton of others doing what I do. Spending so much time in one’s car in SoCal meant much less time for quality pursuits and pleasures. A smaller pond with relaxed pace allows one to savor life and special moments.

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