Navigant Research Blog

IKEA Expands in Smart Home Market with Lighting

— June 16, 2017

The smart home market is filled with big name companies like Amazon, Google, Apple, Honeywell, Comcast, Lowe’s, and AT&T, and now another large incumbent is expanding into the smart home space. Traditionally known for its well-designed, inexpensive, and easy-to-assemble furniture, IKEA recently introduced a line of smart lighting products called TRÅDFRI, or “wireless” in Swedish. The TRÅDFRI smart lighting product line includes a ZigBee gateway device, connected bulbs, a remote control, and a motion sensing dimmer switch, as well as LED lighting doors and panels. The dimming kit starts at 749 kr, or about $85. A similar offering from Philips includes a gateway, two Hue bulbs, and a dimming switch and starts at a price of $129.99.

Home Tech Innovation

IKEA claims that this new product line is part of its long-term commitment to its home tech innovation initiative Home Smart. The company first began offering smart products in 2015 with furniture and accessories that include wireless charging for compatible smartphones. The company is furthering this vision not only with its TRÅDFRI lights, but also by integrating the smart lighting products with voice control through Google Home, Apple HomeKit, and Amazon Echo devices. Voice control capabilities will be available beginning this summer. IKEA’s goal is to make smart home products easy to use and affordable for everybody, and its expansion in this space with its smart lighting shows this commitment.

Relative to other various smart home technology markets such as smart thermostats, smart plugs, security cameras, door locks, and smart meters, the smart lighting market is still in its early stages. Navigant Research’s recent Leaderboard Report: Residential Connected Lighting currently pegs Philips as the market leader; however, there is plenty of room for other companies to gain traction in this space, and activity is ramping up. Some lighting incumbents have yet to offer connected lighting products in the residential lighting space, and startup companies never before involved in the lighting are becoming engaged, such as ecobee with its new Alexa-integrated light switch. Thus, big name companies like IKEA can still gain traction and become leaders in the space through more innovative and affordable products.


Interoperability Is an Issue Both between and within Companies

— June 14, 2017

Interoperability is a major barrier for smart home companies. Mainstream adoption of smart home devices largely depends on the experience and ease of use for consumers. And consumers don’t want to install an ecosystem of devices that can’t communicate and require multiple apps to operate. But when issues around interoperability are raised, it is usually in reference to companies with different devices that can’t work together. For example, the somewhat newly released Google Home still does not work with rival thermostat product ecobee. Google already has integrations with a subsidiary consumer products company, its Nest Learning Thermostat. However, one issue that is not always apparent is the interoperability of devices from within the same company or product line.

This issue hit close to home for me during a recent holiday. While celebrating with friends, the group decided to play music using Bluetooth-enabled UE Boom speakers. We wanted to connect each of our individual speakers so we could play the same music from all three speakers in sync. UE Boom’s app guides users through a step-by-step FAQ on how to PartyUp, or how to connect multiple speakers through one smart phone app. But we could not seem to get all three of our speakers to connect. The closest we came to troubleshooting this problem was discovering that we could connect two speakers to each other by connecting one speaker through the app and manually connecting the other to the already connected speaker via Bluetooth. However, the third speaker wouldn’t connect to either of the other two and could only play music on its own. After much frustration and Googling, we determined that the third speaker was an older generation than the other two. This means that even though the speakers were all from the same company and product line, the firmware in the third speaker was too old to enable us to connect all three speakers.

Big Picture Implications

As somebody active and engaged in the smart home industry, it is concerning that I was unable to connect these speakers; if I’m an early adopter and I can’t do it, then how can the average consumer? Though this was a small technology glitch, it has much larger implications for the smart home and its role in the energy cloud. How will the smart home manifest when it depends on an ecosystem of various connected devices and there are currently issues connecting a few devices? How will the smart home play a role in the energy cloud as a dynamic grid asset when there are still issues at the device level?

Not only do participants in the smart home space need to work together to fix interoperability issues between third-party devices, but companies themselves need to ensure products within their own lines work together—otherwise the smart home industry will never succeed or play a role in the larger energy industry.


Apple Finally Introduces HomePod to Rival Echo and Home Devices

— June 7, 2017

Rumors of an Apple-branded smart home speaker have finally come to fruition with the introduction of the HomePod on June 5. This speaker has been a long time coming; some reports indicate that the HomePod has been in development for the past 2 years. Navigant Research covered these details in a blog on competition in the smart home market in September 2016. But don’t get too excited yet—the speaker will not be available until December 2017 in the United States, United Kingdom, and Australia—and it will cost a whopping $349.

Part of the reason for this steep price is that Apple is attempting to differentiate this speaker from Amazon Echo and Google Home speakers with more advanced microphone and speaker technology. According to reports, when a HomePod is first activated, it sends out a 360-degree beam of sound and plays differently according to its environment (a bookshelf or wall nearby). Supposedly, it also automatically connects to other HomePod speakers nearby and the speakers will adjust their respective sound output to make sure they work well in tandem. Thus, the HomePod is considered a premium product because it is not only a powerful music player, but it also has smarts.

Apple-Enabled Smart Home

Perhaps one of the more important features, however, is that this speaker is embedded with Siri, which has been utilized on iPhones since late 2011. This has larger implications for an Apple-enabled smart home, as the HomePod speaker will now act as a hub for Apple’s HomeKit platform. HomeKit has integrations with a range of manufacturers, including Logitech, Lutron, Honeywell, and Leviton, among others.

Although this sounds like the perfect tipping off point for Apple, the company may struggle to gain traction in the smart home market compared to its competitors. Amazon Echo, which was introduced to the US market in 2014 and the UK market in late 2016, has been a surprise success among consumers. Amazon Echo sales were estimated at between 9 million and 11 million devices at the beginning of 2017. While Google only recently introduced the Home and is still gaining traction in the market, the capabilities of Google Assistant are reportedly some of the best available today (in terms of actually being able to perform functions with the speaker outside of simply playing music). Assistant utilizes other Google resources such as Gmail, Google Calendar, Google Maps, and its infamous search engine.

Interoperability Issues

Apple will also face challenges due to interoperability issues. The HomePod is part of a much more closed off ecosystem of devices and applications than those of Google and Amazon, which have had more time to integrate with third-party devices and are generally more open to playing with others. For example, while Apple is playing the “totally rocks the house” card with this speaker, Siri will only link to Apple Music. Spotify, Amazon Unlimited Music, Google Play Music, and YouTube customers will not be able to use Apple HomePod to play music. This could drive consumers to shift to Apple Music or it could make them frustrated and more likely to adopt other, more open solutions.

Though it remains to be seen how Apple will fare with its new speaker, this product release represents another major player becoming more involved in the smart home. The smart home is increasingly becoming a reality. With major stakeholders investing more in connected products and services, it’s only a matter of how the market develops and when it becomes fool-proof and mainstream.


Multi-Family Market: An Opportunity for Smart Home Devices?

— May 12, 2017

Smart home devices are catching on in homes around the world. Nest has claimed installations of its Learning Thermostat in 190 countries, Google announced the availability of its Home in the United Kingdom, Amazon expanded Echo’s US sales to the United Kingdom and Germany, LIFX connected bulbs are selling in more than 80 countries, and Smappee is selling in 85 countries. However, most sales are occurring among consumers in single-family homes. The multi-family market is largely untapped, leaving opportunities for vendors to gain traction and market share.

Possibilities Abound

There are a number of reasons for this untapped market. First, ownership of devices in multi-family dwellings can get complicated. Should landlords or consumers install and own the hardware? Landlords and building managers have little incentive to purchase such devices because they do not enjoy the benefits of energy savings or remote access, though they do have the option of charging higher rent for the added luxury. For occupants, it may not make sense to own these devices if the property is a rental, especially since renters in the United Kingdom are moving 8 times more than homeowners and since surveys show that 56% of US tenants plan to move within the next year. When devices are installed in multi-family units, some are not used to their full potential. For example, smart thermostats often cannot participate in demand response programs due to the complexities of directly controlling load in multi-family dwellings, where each unit often does not have its own central HVAC system. In fact, many pilot programs that utilize smart thermostats are unavailable to renters or apartment dwellers. On top of this, it can be far more expensive for utilities to implement demand-side management programs in multi-family dwellings than in commercial or single-family residential buildings.

Despite the complexities associated with this market, renters are interested in smart home devices. According to a recent study conducted by Wink, 36% of renters would pay more in rent to have smart home products or amenities in their homes. Given that 37% of Americans are renters, this means the multi-family dwelling market has a lot of potential.

Some companies are beginning to tap into the opportunities available in this market. IOTAS is a company approaching the market with a business model focused on selling landlords and building managers hardware packages that are installed across from apartment complexes. The solution includes tenant accounts that store personal device preferences and follow tenants between apartments as they relocate. This reduces issues surrounding device ownership and creates an opportunity for landlords to charge more in rent for the devices as well as a monthly fee for ongoing services—like monitoring and controlling. While these types of solutions are just emerging, the trend shows hope for Internet of Things and smart home solutions in the multi-family sector.


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