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The smart home: hype vs reality

Much attention at this year’s Consumer Electronics Show (CES) once again centred on the smart home. Appliances as well as hubs which control your connected devices are being lauded as the next must-have products. Despite the emergence of some compelling devices, significant challenges remain for manufacturers, developers, and consumers themselves, for whom take-up has been slow. Beyond the media and tech hype, what is the reality for the smart home? 

Neil Maidment’s experiences with the Samsung SmartThings trial gave an insight into the potential of what the smart home can offer. A world where devices can talk to one another and be controlled through a single interface whilst providing valuable information and services to lead better lives is the utopia for consumers. However the market is still in its early stages, with consumer adoption remaining small-scale. Whilst tech giants Amazon, Apple, Google, and Samsung have entered the market and are focusing on promoting their own platforms, hubs, and communication standards, there is plenty of opportunity for retailers, manufacturers, and telcos to get a foothold in the market.

We see this taking root by expanding existing services – helping consumers install and then providing technical support for the devices they sell. For example, a leading retailer already provides an installation service which could expand to cover other device makers. It could also extend to installing and connecting devices from different manufacturers.  This will naturally help brand awareness and develop a ‘smart appliance’ relationship with the consumer, moving away from simply selling the products, to providing more enhanced, regular services centred around proactive maintenance for white goods (possibly through partnerships with manufacturers), or on-demand replenishment of consumables. Amazon has already shown what’s possible with the Dash button, but retailers are ideally placed to benefit from this too.

There is also a case for retailers to develop ‘wrapper services’ which consolidate the rich data that will be produced by many devices in the home (once they’re all hopefully able to communicate with each other), and present it to consumers via apps or web interfaces on a tablet or phone. Why could this not extend into recommending additional devices which may increase productivity, energy efficiency, or provide additive services the consumer hadn’t thought was required previously? Retailers may find opportunities in understanding food consumption and replenishment in real-time, and recommending products that are tailored to the consumer.

Telcos are also ideally placed for the smart home revolution. One of the UK’s largest telecommunications services providers recently announced plans to offer a smart home hub using AT&T’s ‘Digital Life’ home management and automation platform and hardware from Tado and other device makers. This is a good entry point and opens up the possibility of stitching complementary services to the smart hub. Combining high-speed broadband services and smart home automation through a single hub device, controlled by an app on the phone or tablet, is a big market opportunity for telcos. They should focus on open, standards-based and federated platform architectures which would develop strong third-party ecosystems to entice long-term engagement with the consumer.

Whilst it may look as if the major players are well-advanced with their plans, the reality is that this will be a long-term game for everyone. Retailers, manufacturers, and telcos should be looking at their existing business models with a ‘smart’ mindset, and asking the question: “How can we transform our business model to leverage our existing strengths, combined with innovative ‘smart’ services and products, to deliver unique and compelling value to our customers?”

In subsequent blogs we’ll explore more aspects of the smart home, and investigate the opportunities and challenges ahead. 

Back to January 2016

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