Navigant Research Blog

Smart Homes Coming, At a Gradual Pace

— January 19, 2012

The promise of smarter homes continued to make noise at this year’s CES, the world’s largest consumer electronics show.  But nothing really wowed me.  You might call this an incremental show – and that’s not necessarily a bad thing.

Keep in mind that CES is huge, with 1.86 million net square feet of space used by exhibitors, record crowds (upwards of 153,000 people) and a record number (3,100-plus) of exhibitors showing off their newest gear.  Among the products, companies and people I saw, these stood out for various reasons:


Nest (Nest Labs): It’s hard not to like what Nest Labs has done to the lowly thermostat.  The much-publicized Nest device combines the simplicity of an iPod (the company founders, in fact, helped develop Apple’s iPod) with the ability to “learn” how you use energy to heat and cool your home.  The device then aims to help consumers reduce energy consumption and thereby lower their costs.  Company co-founder Matt Rogers told me the catalyst for Nest was to help people “save a ton” on energy consumption with an easy-to-use device.  After launching online last November, Nest Labs quickly ran out of stock.  Orders are wait-listed now as manufacturing ramps up.

Belkin’s WeMo Home Control Switch: This Wi-Fi connected switch sits between a wall outlet and small home appliances.  You turn it on or off through an app on iOS, Apple’s mobile platform, and the switch can be paired with a motion sensor for more functionality.  Availability of these WeMo devices is expected in the summer of 2012.  Other related devices – such as garage door openers, door locks, and baby monitors – are expected to join the WeMo family as well.


AlertMe and Lowes’s: UK-based AlertMe has partnered with home improvement chain Lowe’s to provide a cloud-based home management system.  AlertMe will be the platform behind Lowe’s new Iris service for North America, which enables consumers to monitor and control their homes through a smartphone or a computer.  The Iris service will launch in mid-2012.  AlertMe CEO Mary Turner told me the goal is to provide consumers with not only an intelligent digital dashboard for their homes, but also the ability to put their homes on “cruise control.”


ZigBee, Z-Wave, HomePlug, UPnP, HomeGrid ( Many of the leading networking technology groups were present at CES, as expected, each vying for greater traction in the connected home space.  While each has something to offer, there isn’t room here to dissect them in detail.  Suffice to say, many vendors have interesting products on the market or coming soon based on these technologies, which is very encouraging.  But it all makes for a cluttered landscape in consumers’ minds, and that slows the emergence of mainstream solutions.

Throughout the show, I heard people say, essentially, “The technology is available for smarter homes – it just needs to be deployed.”  For that to happen, I was told, both utility operators and consumers need more education, which while true, means a slower rate of adoption.  Sure sounds incremental to me – and should be expected, given the sluggish economy and the mood of consumers to move cautiously at the outset of trends that involve something as complex as the modern, connected home.


At NAIAS, The Beginning of the End of the Battery Wars

— January 18, 2012

After attending the North American International Auto Show, I can state one thing for sure: the number of nickel metal hydride (NiMH) battery hybrids is shrinking fast.  Ford has made a bold move that will likely have other automakers following suit: it has stopped producing a NiMH-based battery hybrid.  All their hybrids will be lithium ion (Li-ion) based batteries, starting this year for the 2013 model year.  Ford claims that this will enable the new Fusion to achieve fuel economy numbers (44 mpg highway/47 mpg city) that are higher than smaller cars like the Honda Civic hybrid (44/44) and well ahead of similar segment cars like the Toyota Camry Hybrid (39/43) and Chevrolet Malibu Eco (which also uses a Li-ion battery in its eAssist system, to achieve 37/25).  The larger Fusion may even start to pinch some demand from the current reigning eco-leader, the Prius (48/51), thanks to its size and sedan body-style (the typically preferred style in the U.S.).  Of course, all this depends on the price, which was not announced at the show. 

Joining the current users of Li-ion batteries in hybrids (BMW, GM, Honda, Hyundai, and Mercedes), the two potential big-volume hybrids announced at the show this year, the Fusion and the Jetta Hybrid, are now both Li-ion based.  With Ford now shifting to Li-ion batteries in all its hybrids, the ranks of NiMH based hybrid vehicles are shrinking fast, with two major exceptions: the Toyota Synergy drive system and the Honda Insight/CR-X.  So, while this may point to the end, the NiMH vs. Li-ion competition is not over… yet.

Two other interesting reveals at the Auto Show were the Lexus 2+2 hybrid coupe and Toyota NS4 plug-in hybrid.  These vehicles, while just design and technology showcases, almost certainly have the underpinnings of the next generation of Toyota’s hybrid system.  Toyota wasn’t talking about this, but I expect we will hear more about the next generation of hybrid in the coming year.  Toyota has put a great deal of effort and money into developing a Li-ion supply chain with its current hybrid battery partner, Panasonic, and is offering that battery in the Prius PHV.  As we have seen Honda do with the Civic, I would expect Toyota to shift some low-volume hybrids (perhaps Lexuses) to Li-ion in the very near future.

It’s clear that this move by Ford will usher in new pressure on competitors to make big jumps in fuel economy.  NiMH producers will see new competitive pressures as a result.


The Smart City – From Vision to Reality

— January 9, 2012

The news that the 2012 TED Prize has been awarded for the first time to an idea, The City 2.0, is further evidence of the importance of cities in addressing global issues of sustainability, economic development and technology innovation.  The TED Prize is linked to the acclaimed TED conferences and video series promoting ground-breaking technical, scientific and cultural ideas.  According to the prize director, the idea behind the award is to challenge the TED Community “to embrace radical collaboration on one of the most pressing issues we face: how to build sustainable, vibrant, working cities.”

The TED announcement is just one of series of new studies, events and initiatives all focused on taking sustainable urban development programs to the next level.  Eric Bloom has already covered the recent IBM-sponsored smart city gathering in Rio de Janeiro.  He highlighted the innovative projects in Rio that are addressing systemic challenges and preparing the city for the arrival of the World Cup and the Olympic games.  The UN has provided another useful example of how major events can propel new thinking about city design and development.  It has pulled together lessons for sustainable cities drawn from the Shanghai World Expo in 2010, which had  the theme of Better City, Better Life.  The Shanghai Manual, A Guide for Sustainable Urban Development, provides a 300 page overview of the opportunities for cities to take new approach to issues such as economic development, transport, building, waste management and the use of ICT.  The manual is part of the UN’s attempt to educate and train city authorities around the world on how they can make their cities a positive force for economic development and environmental sustainability.

The core themes of the UN study were also the common topics of conversation at the Intelligent City Expo, which I attended in November.  Over three days in Hamburg – European Green Capital 2011 – city managers and political leaders, not-for-profit organizations and suppliers debated the way forward for cities.  There was general agreement that a smart city is one that combines a commitment to sustainability with continued economic and social development supported by the innovative use of technology.  Much of the discussion focused on the practical challenges of developing the political leadership, citizen engagement, and new operating models that enable the transformation to a smart city.

One of the biggest challenges is how to provide the financial underpinning for that transformation.  In fact, the first question asked at the conference to the opening panel was “Who pays?”  I chaired the panel that addressed this topic on the second day of the conference, comprising representatives from European investment bodies, including the European Investment Bank, and also from the private equity sector.  In Europe at least, investment funds are available for trials and pilots, but taking projects to large-scale deployment is still uncharted territory in most cases.  It’s also clear that the private sector is eager to find new ways to work with city authorities but they need to find the right service and right business models.

One area of growing interest is the value of information and data assets in helping to reimagine the way the city operates.  This issue has been taken up by The Climate Group, in a new report on smart city economics, Information Marketplaces: the New Economics of CitiesThe report, produced with the help of Accenture, Arup and the University of Nottingham, examines the potential for cities to use untapped data and information assets to improve decision making, make better use of city infrastructure and develop new forms of  cooperation with the private sector and with citizens.  It’s a useful contribution to the growing debate as to how city data and information assets can provide a technical and financial basis for smart city transformation.   The challenge for cities is to understand what data they should make available, in what form and above all what partnerships they need to forge to ensure that that hidden value is realized.


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