Connected Home: a buzz or a real movement?
Connected Home: a buzz or a real movement?
WHAT’S THE BUZZ IN THE MARKET? Everybody talks about the connected home
Connected home solutions (also called smart home solutions) and products are mushrooming at a pace that resembles the dot-com hype less than twenty years ago.
Everybody wants to take a position in the battle for your connected home. Yeah, your home. Startups, top tier tech companies, retailers, service providers and established conglomerates are now taking part of the connected home playground.
Apple, Google/Nest, Microsoft, Samsung, Lowe’s, Honeywell, AT&T, Comcast, Orange, and British Gas – just to name a few, have all entered this market. Why? Because they’ve all understood the potential and the attractiveness of this market.
Since the connected home market is highly fragmented and definitions may vary from research firm to another dramatically, it is hard to come up with clear forecasts/market size. It is however clear, that the market is big and is growing in a double digit figure.
Our conclusion here at Essence is that the market is estimated to be worth ~$35B in 2013, and is driven mainly by practical needs such as security rather than “nice to have” cool features like the coffee machine talking to my shades… We will elaborate further on this subject.
So what is the connected home anyway, and what has the Internet of Things got to do with it?
Although there is no one clear definition of the connected home, it is well accepted that the connected home market consists of 5 domains or “submarkets”:
- Home security & safety
- Home energy management (HEM)
- Home automation
- Home entertainment
- Home health monitoring
Advancements in technology (avalanche of things and sensors being connected to the internet, M2M, cloud) accompanied by high rates of broadband and smartphone penetration worldwide have facilitated the convergence of these domains that until not long ago, used to be separate markets. So, to make a long story short, the connected home allows end users to manage and monitor virtually every aspect in their home environment, including themselves - through various internet enabled devices.
Controlling the security system, adjusting the thermostat, opening and locking doors, detecting possible deterioration in residents’ health condition, remotely controlling your irrigation system, turning on the stereo system and seeing how much energy you’ve consumed last month - are only selective examples of things you can control/monitor and manage from one simple application on your mobile device or tablet. All those “things“(sensors, detectors, switches, thermostats, etc.) are connected to the internet and take part in the connected home ecosystem. They are precisely those “things“ of the Internet of Things (IoT)... so it is now easy to understand the relationship between the IoT and the connected home; Internet of Things is THE enabler of the connected home (and many other connected markets).
So why doesn’t it exist in every home around you? Or in your home?
Actually - many homes already have some components of the connected home. The problem is that those components are not always connected. There are few valid explanations for the relatively low market traction (for now)… we’ll focus on one of them; Apart from awareness, one of the greatest challenges service providers are facing when introducing a connected home offering is how to explain and deliver the value proposition to the end users. Have you ever tried to explain someone why he should have a remote-controlled lamp or an electronic door lock? Are comfort related benefits enough to convince end users to spend money for it?
Only if the consumers understand what’s in it for them (the value proposition) they will open their wallets! The clarity of the value proposition is a major success factor in the way to mass adoption…
Security as the cornerstone
Out of the many features and value propositions connected home solutions may offer, security and safety are the most popular, and show the clearest value to end users. A survey released by the Consumer Electronics Association earlier this year (4/2014) reported that 62% of consumers interested in smart home technology were initially intrigued by the security aspect. From conversations we have on an ongoing basis with dozens of analysts and industry experts and in industry conference like IFSEC, MWC, M2M World Congress, ISC West, etc. that cover the connected home market – we can confidently say that they all agree on the need to show a valuable service that addresses a basic practical need for which consumers are willing to pay for. Security and safety are the top priority in people’s homes. Furthermore, it isn’t enough to have a security feature in the smart home offering. It has to be reliable and very easy to use, since people also say that complexity and the concern that it may not work when really needed are the top reasons for not adopting such systems.
Essence in the connected home
Being the most popular service of connected home offerings, security must be positioned in the center.
With over 20 years of experience in the security market, connected home was a natural evolution for Essence. We have leveraged our security, cloud and wireless know-how to expand our portfolio beyond home security, to home management and home care solutions, and apparently we did it well - we have recently received important market recognition for our efforts after winning the European Consumers Choice award with our WeR@Home™product suite. Featuring home automation, safety, security and cloud technology with remote control tools - the WeR@Home™ is a great example for the implementation of connected home solution, with security at its core.
Essence allows service providers who want to introduce a connected home solution to bring the Internet of Things to every household, and enjoy a better business performance. We invite you to join us in taking the lead of the connected home revolution.
Please contact us for more details about how Essence can benefit your business.
We invite you to share your thoughts on our LinkedIn page and let us know what you think will unlock the connected home potential.
Till the next time - stay connected,
Essence Marketing Team