Navigant Research Blog

The Evolving Smart Home

— February 6, 2018

The growth of the Internet of Things is continually expanding the number of connected devices in our homes, offices, retail stores, and healthcare facilities, to name a few. According to Navigant Research’s recent report, The Smart Home, global smart home platform revenue is expected to increase from $4.2 billion in 2017 to $39.5 billion in 2026. This significant increase in revenue makes it clear the smart home is here to stay. With the smart home on the rise, what is the real added value these solutions offer to consumers?

Do Smart Solutions Provide Enough Value?

When you think of the smart home, it’s not uncommon to first picture Amazon’s Alexa-enabled voice activated devices, which allow users to play music, listen to the news, receive weather updates, and control compatible devices like a Philips Hue smart bulb all through voice. While devices like smart bulbs do provide additional benefits outside of voice control—such as dimming, color changing, and reducing energy use—how much additional value are these solutions really providing? Philips Lighting recently announced new software features that will sync Philips Hue lighting with gaming, movie, and music content. While this update does include additional features, how much value is this really adding? Is it helping to carry the smart home market forward? Is voice control, dimming, syncing with video games and movies, and energy savings enough? I would argue no. The added convenience of voice control and color-changing or dimming features through devices like smart bulbs do not provide enough of an advantage over more traditional products, like LEDs, for many consumers to justify paying the additional costs. The concept of voice control and changing the color of lighting through a mobile app are novel ideas that provide enough of a wow factor to intrigue consumers, but these features are not enough to carry the momentum of the smart home into the future.

Security as a Value Proposition for the Smart Home

Smart home vendors realize the need to provide additional value propositions for their products to appeal to the mass market and increase adoption of smart solutions. One of the top key trends expected in 2018 by Consumer Reports for the smart home industry is security. To be sure, this is not the only trend of the smart home this year; others range from additional connected devices to increased artificial intelligence to home healthcare, covered in a recent Navigant Research blog. Many of the trends anticipated for 2018 are about providing additional value to consumers for smart home solutions.

The desire for security is a universally shared need and one the smart home market can capitalize on. A recent example of this is Ring, a smart video doorbell company, acquiring Mr Beams, an LED lighting company offering indoor and outdoor LED fixtures. As a result of Ring’s first acquisition, the company launched a line of outdoor security lights. The new line includes pathway lights, step lights, and spotlights that will work jointly with Ring’s security cameras and doorbells. This acquisition not only highlights the growing significance of security as a use case driving progress in the smart home market, but also the importance of providing additional value to smart home products. Lighting integrated with security systems are a natural fit that can better highlight the value of smart home solutions for consumers than features like voice activation and remote control, and more logical partnerships will emerge. Security is just one example of a use case that can transform the smart home from providing additional convenience and a novelty features to a becoming a necessity for consumers.

 

Alexa’s Super Bowl Pick Demonstrates Advances in UX

— February 1, 2018

Over the past week, the internet has been captivated by Alexa’s pick for the Eagles to win Super Bowl LII, with tweets, videos, and articles featuring Alexa’s latest mantra: “I’m flying with the Eagles with this one because of their relentless defense and the momentum they’ve been riding off their underdog status. E-A-G-L-E-S. Eagles.”

Though most will look at this latest Alexa craze with a small chuckle and admire the assistant’s cleverness (or, if a Patriots fan, seething and swearing off Alexa), to me this response demonstrates a small step forward in user experience (UX) that has been lacking in digital assistants.

What Is UX?

UX is an increasingly popular acronym floating around the tech industry (not to be confused with user interface [UI]), and it captures a field targeted at improving the usability, ease of use, and pleasure provided in interactions between consumers and products. In the world of digital assistants, UX is about the smarts of a digital assistant and its ability to complete tasks asked of it in a satisfactory way to users.

Some would argue that, while there have been significant strides in voice activation as a UI, one of the biggest obstacles to the mass adoption of digital assistants is lacking UX. For anybody who has used a digital assistant, this is completely understandable. There is nothing more frustrating than asking Google Assistant, Siri, Alexa, or any other the other various digital assistants a simple question, only to have it not understand or reference something entirely unrelated. This type of mishap is frequent enough that it has even resulted in satire about the experience with digital assistants. One such example is a CollegeHumor clip where a woman asks, “Siri, how big is the Serengeti?” and Siri responds, “No problem. Show me pictures of spaghetti.”

Personality Is a Plus

While Alexa rooting for the Eagles isn’t exactly a groundbreaking advancement in the field of artificial intelligence and natural language processing, the fact that users are fascinated with this phenomenon and think Alexa has a sense of humor creates a more positive UX with digital assistants, and can help spur adoption of these devices. Personally, the fact that I get a clever response from Alexa on who will win the Super Bowl, while my Google Assistant says, “My apologies. I don’t know that,” gives Alexa a leg up on Google because taking a side is more personable than saying nothing at all. It’s a small gesture on Amazon’s part that makes a big difference in my experience as a user. As it so happens, I also agree with Alexa. Go Eagles!

 

Even My Grandma Has a Smart Home!

— January 25, 2018

There are all kinds of barriers to smart home adoption. People ask me all the time, “what do you use your Alexa for?” Unconvinced by existing value propositions, many consumers figure they need not bother with smart technology.

Smart Home Imperfections

Admittedly, for all the promise about how smart these products are and how they will change our lives, often they are not that smart and they fail to meet expectations. The countless times I have asked my Echo device a simple question, only to have Alexa respond with “Sorry, I don’t know that,” drives even the earliest of adopters to the brink. And that’s not even going into the issues surrounding installation, troubleshooting, interoperability, and cost. It makes many wonder, why all the fuss?

Smart Features Offer Ease

Despite all the reasons people find not to adopt smart home products, I have found a convincing case for even the biggest skeptic. I recently discovered my grandma has a smart home.

My grandma is no early tech adopter—she is 80 and her favorite hobby is quilting—and yet, she has a Google Home, a Nest Cam, three Philips Hue light bulbs, several ConnectSense smart outlets, and an iPad or iPhone to control them all, which is a more robust smart home ecosystem compared to what most people have—including me. Every evening when it starts to get dark, she uses her smartphone to turn on lamps, instead of having to bend over and switch them on. When she retires for the evening, she asks Google Assistant to turn her Hue bulbs on, instead of having to fumble around in the dark for a light switch. She doesn’t even notice the Nest Cam perched on her mantel, but it gives my family members piece of mind as they can check on her using their smartphones from wherever they are.

Gifting Smart Tech

There are, of course, a few caveats. My grandma hasn’t purchased any of these products herself. They have all been gifts from family members, which is important for vendors to keep in mind when targeting consumers. When a device malfunctions, she calls upon her children and grandchildren for troubleshooting, which usually involves walking her through an app over the phone or simply restarting a device. Though this works most of the time, smart home tech vendors need to provide maintenance and support to consumers.

My grandma also hasn’t installed any of these devices herself, though they have been plug-and-play enough for younger generations in the family, and many companies are increasingly offering installation services. To top it off, her smart plugs are integrated with Apple HomeKit, but they aren’t integrated with Google Assistant, meaning she can’t control them through voice activation—which highlights a common interoperability problem for most consumers.

If Grandma Can Do It, Anybody Can

While the smart home market has its challenges, there are emerging use cases that are convincing more consumers to embrace the technology. Smart home tech should not be used only by early adopters and younger generations, it should be used by everyone. If my grandma can use smart home products and services, then anyone can, and there is hope for the smart home market yet.

 

Smart City Technology Helping Low Income Residents, Too

— January 23, 2018

Particularly in the developing world, there are valid concerns that smart cities could exacerbate the digital divide and primarily benefit wealthier residents. However, a number of emerging companies and initiatives demonstrate that smart city technology can also be utilized for digital inclusion, citizen empowerment, and to increase low income residents’ access to essential city services such as transportation and healthcare.

Key Company and Project Examples

A new company called Cityblock Health was recently spun out of Alphabet’s urban innovation unit, Sidewalk Labs. Cityblock raised over $20 million from a range of investors to help low income Americans access basic health services. Through the company’s Commons platform technology, it will partner with community health centers and partner organizations across the US to reconfigure the delivery of health and social services—and make healthcare services more personalized for qualifying Medicaid or Medicare members. Specifically, the company is targeting issues with misaligned payment incentives (between payers and providers of Medicare and Medicaid), siloed medical and social service delivery, and fragmented data. Cityblock is expected to launch its first Neighborhood Health Hub in New York City in 2018. The Hub will differ from traditional siloed health clinics, using the company’s custom-built technology to merge health services with the community. Caregivers, Cityblock members, and local organizations will all engage with each other in one physical meeting space to discuss and solve local health challenges. Cityblock will be an interesting startup to follow as it aims to integrate primary care, behavioral health, and social services all under one roof.

Another significant example of the potential for smart city technology to help low income communities (and further explained in one of my previous blogs) is Columbus, Ohio’s proposal for the US Department of Transportation’s Smart City Challenge. One of the primary reasons the city won the Challenge—and beat out the better-known technology centers of San Francisco, Austin, and Denver—was due to Columbus’s ability to demonstrate that its plan would result in increasing poor residents’ access to new transportation options. Additionally, Microsoft, along with its partners G3ict and World Enabled, launched the Smart Cities for All Toolkit in spring 2017 as part of its broader city engagement program. The toolkit is designed to help city officials and urban planners make more digitally inclusive and accessible smart cities. Tools developed for cities include a guide for adopting information and communication technology (ICT) accessibility standards and a guide for ICT accessible procurement policies.

Project Design and Implementation Crucial

These examples demonstrate that smart city technology can be used to the benefit of low income residents—whether it’s increasing access to crucial services such as healthcare and transport, or helping to bridge the digital divide. Policymakers must be vigilant when designing and implementing smart city programs, ensuring that technology deployments will extend to and directly benefit low income residents and neighborhoods in their city. Specific projects designed for low income communities (e.g., providing transport between high unemployment neighborhoods and nearby job centers) should be pursued as part of a city’s broader smart city strategy whenever possible.

 

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