Navigant Research Blog

Lighting Solutions Leave Something to Be Desired, but Hope Is on the Horizon

— March 29, 2017

The residential connected lighting market is becoming increasingly popular as consumers adopt more voice-activated smart home devices, such as the Amazon Echo, Google Home, and Apple HomeKit, that enable them to interact with their lighting in a whole new way. Connected lighting shows significant potential as new use cases emerge for assisted living and elderly care, security, notifications, and health and wellness, to name a few. However, the industry has a long way to go before connected lighting is adopted by a greater number of mainstream consumers.

Something to Be Desired

Research for Navigant Research’s Residential Connected Lighting report revealed that there is no single complete, comprehensive lighting solution available on the market. It seems as though every product leaves something to be desired.

Many of the connected bulbs available are either connected and color-changing but do not have very intelligent features; are fairly intelligent but overwhelmingly expensive; do not require a hub but cannot be controlled outside of the home; can be controlled outside of the home but also require a hub; or are so new that it could be a risky purchase relative to more mature products (meaning the company or product itself may not be around in coming years).

And many of the connected bulbs available have tradeoffs when it comes to function and marketability:

  • Connected and color-changing but without very intelligent features
  • Fairly intelligent but overwhelmingly expensive
  • Do not require a hub but cannot be controlled outside the home
  • Can be controlled outside the home but require a hub
  • So new as to be a risky purchase relative to more mature products

Connected luminaires or fixtures such as table lamps are few and far between, and those available on the market tend to take on a more futuristic style than what average consumers might be used to and interested in having in their homes.

Most control products are offering connectivity through protocols like ZigBee and Wi-Fi, and capabilities range from dimming to occupancy sensing. However, many are simply not as smart or automated as consumers are led to believe. Compared to other types of lighting solutions, switches can be an affordable alternative to retrofitting an entire home with connected bulbs, though they require an electrician or experienced do-it-yourselfer to install.

Positive Progress

However, because the residential connected market is still emerging, there are many players entering the market with innovative solutions for solving these issues. For instance, companies such as Nuro Technologies, which will be offering a Wi-Fi-enabled light switch, are arguably positioned to offer the smartest lighting controls products. (In Nuro’s case, though, these switches are not yet available.) Qube Smart Lighting is offering an affordable Wi-Fi and Bluetooth-enabled bulb with smart capabilities like machine learning. Companies like these are expected to push incumbents and other players to continue innovating and developing their products, which will make for positive progress in the connected lighting market.

To learn more about residential connected lighting, look for Navigant Research’s Residential Connected Lighting Market Overview and Leaderboard reports.

 

Move Over Alexa! Text Messaging Wants a Seat, Too

— March 28, 2017

Using your voice to control your smart home might not become as popular as previously thought. Text messaging is looking for a seat at this table, too—especially for controlling smart appliances.

Ever since Amazon’s Echo device, better known as Alexa, stormed the market, voice activation has dominated smart home technology. This device was the star at the 2017 Consumer Electronics Show (CES) in January, where vendors of smart home and Internet of Things devices and services clamored to stay in Alexa’s orbit. For example, Google’s voice-activated Home device now competes with Alexa for market and mind share. Home, launched in late 2016, gets prominent retail display inside Verizon Wireless stores and seems to be riding in Alexa’s wake.

A New Use for an Older Technology

But an older technology lurks: text messaging. Unified Inbox, a small Singapore company, offers a text messaging service that has attracted the attention of several major appliance manufacturers, including Bosch. The service works by adding a user’s home to a contacts list in an app like WhatsApp; a message such as “preheat the oven to 300 degrees at 5:00 p.m.” can then get passed to an oven.

While this type of text messaging has yet to catch on with consumers, some technology leaders, including Facebook founder Mark Zuckerberg, are fans. Zuckerberg has been tinkering with Jarvis, his own voice-activated artificial intelligence program. He has discovered that he prefers text, mostly because the use of it feels less disturbing to people around him compared to voice-activated devices.

Texting has its place, and it should take hold among consumers in the coming months and years. However, the pace of adoption could be muted in the United States, where smart appliances are not that attractive to consumers. A report by Mintel last year found that 56% of respondents are willing to pay more for an energy efficient washing machine (good for consumers and utility demand-side management programs). Yet, just 11%-12% would pay more for a washing machine with smart features—including the ability to diagnose problems or monitor and control the machine from a mobile device.

An Open Question

Smart or connected appliances have already entered the market, and Navigant Research expects steady growth for this category going forward (see our Market Data: IoT for Residential Energy Customers report). But how people will interact with these smart appliances is still an open question. Voice activation has its place, but there is room for other user interfaces such as text messaging. The view here is that multiple interfaces will be available, and users will have to decide how best to control their own smart devices. There is no clear winner here—at least for the near term.

 

Insurance Companies Expand into Energy Management to Mitigate Risk

— November 23, 2016

Home Energy ManagementInsurance companies are starting to get smart about the smart home and energy management. Though these companies are in the very early stages of participation in this market, interest has been piqued and insurers are starting to partner with vendors to offer consumer energy management and connected home solutions. For example, State Farm has partnered with ADT Pulse and Generac to offer consumers discounts for home energy products and services. SmartThings, before it was acquired by Samsung in August 2014, had partnerships with four of the 10 largest insurance companies, including American Family Insurance, which joined with SmartThings and Microsoft to create a smart home incubator in Seattle.

Homeowner Alerts

Insurance companies can find value in data from connected devices by detecting issues and alerting homeowners before catastrophe strikes, especially with large appliances and HVAC equipment. They can also use them to develop more informed policies and offer discounts for adopting these technologies. Energy management is especially appealing to insurance companies because it allows residential customers to remotely monitor and control a range of connected energy devices such as thermostats, lighting, appliances, and electronics, which can be useful in powering down devices during emergencies and even deploying backup power during outages.

Insurance providers in particular have an incentive to offer these types of solutions because it can avoid costly payouts. A monitored, controlled, and automated home that can better mitigate risk and avoid disaster can save insurance companies a significant amount of money in avoided insurance claims.

Emerging Opportunities

While insurance providers have reason to offer consumers these solutions, they are not the only non-utility companies interested in energy management. In recent years, companies outside the traditional energy industry have engaged in this space and found value in offering energy management solutions as part of connected home offerings. These include companies such as AT&T with its Digital Life platform, Comcast with its Xfinity Home offering, and Vivint Smart Home. As Alex Hawkinson, CEO of SmartThings, has said, “The number of services that could be spun out of this is limitless. You can pick industry after industry. The ramifications of making the entire world self-aware are simply massive.”

These new players are just beginning to unlock the possibilities of connected homes to provide increased energy efficiency, comfort, and control. There is something happening in this space, but it is still in a very early stage of development. Many major insurance providers are interested in the smart home, but most are still exploring where they can find value in energy management. Expect to see more engagement from insurance companies in the near future.

 

Gauging Apple’s Smart Home Strategy

— September 27, 2016

Home Energy ManagementLike a circling hawk, Apple has been hovering above the smart home/Internet of Things (IoT) home marketplace, waiting for the right moment to pounce. That moment arrived when Apple released iOS 10 to the public early September 2016. The iOS 10 update includes a dedicated Home app, which is given prime screen real estate on the iPhone. It is a clear sign that Apple is ready to drop down to earth and fully engage, and even compete, in the emerging smart home market.

To be sure, Apple was not absent entirely from this particular marketplace prior to the update. The Cupertino, California-based company first announced its HomeKit platform more than 2 years ago. In the meantime, Apple has quietly waited for new compatible hardware products to become available so the platform could flourish. Currently, several dozen HomeKit-friendly devices are on sale, such as the ecobee3 smart thermostat, a smart lock from August, and Philips Hue wireless light bulbs. Apple expects nearly 100 more similar products from multiple vendors to come out before year’s end, which would further extend its ecosystem.

The essence of Apple’s Home app is its ability to integrate disparate devices in a single application, and do so in quintessential Apple fashion with an easily understood interface that hides complexity in the background. No longer does a user need to juggle several third-party apps to control devices. Instead these can be managed with just one app, as long as the device has the required works-with-Apple seal of approval. This is par for the course for the company that likes to maintain a proprietary world. However, a wireless thermostat or smart plug not part of Apple’s realm would have to be manipulated with a different application.

Apple’s Home App

Apple Home

(Source: Apple)

Amazon Echo’s Smart Home Skills

Alexa home

(Source: Amazon)

Much has changed since HomeKit’s unveiling. Competitors have seized the opportunity to forge ahead, Amazon in particular. The online retail giant has scored a hit with its voice-controlled Echo device, which can connect easily with many of the same devices (e.g., Philips Hue bulbs and ecobee3 smart thermostats) that work with Apple’s Home app. Moreover, Alphabet-Google is about to launch its voice-activated Google Home device to compete directly with Echo. Formidable competitors have taken some market and mind-share ahead of Apple, and the market for smart home/IoT functionality will be intense.

Early Market

Still, there is an upside for Apple. The market is early-stage, and millions of customers have yet to buy products or use connected-home devices. Competitors have helped pave the way and validate a market that has been elusive for many years, primarily targeting people with the money to pay for expensive devices and professional installers, or do-it-yourself geeks willing to fiddle with complex devices and systems. Mainstream adoption appears to be just around the corner.

Savvy energy market stakeholders are paying attention to all of this. Devices and applications that residential and commercial customers adopt can have an important effect on lives and businesses. Witness the growth of bring-your-own thermostat programs offered by utilities (see Navigant Research’s Bring Your Own Thermostat Demand Response report). Utilities need to stay current with what customers are doing behind the meter to automate premises and help them use energy more efficiently. It is a smart strategy for customer engagement, since disregarding trends is risky in a world where Silicon Valley heavyweights and disrupters see ways to leverage a transforming energy market (see Navigant’s Navigating the Energy Transformation white paper). Apple is not the only bird in the sky seeking new markets and growing revenue opportunities.

 

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