Navigant Research Blog

The Fate of the Smart Home Hub

— June 14, 2018

While the concept of the smart home is expected to explode and completely revolutionize the way people interact with their homes, this space currently faces issues preventing mainstream adoption, the most significant of which is a lack of interoperability. The smart home space is fragmented with a variety of standards and networking protocols, and not all devices work together. Some market participants have developed relatively closed-off networks to ensure the devices operating within their ecosystem work well together and are more secure (and to incentivize consumers to join their club over other manufacturers), which is what Apple has done with HomeKit. Others believe in creating open systems where all types of devices from third-parties can work together, which is ZigBee’s aim with its protocol and Dotdot application layer. However, this is easier said than done.

Enter the Hub

Gateways, or smart home hubs, have emerged in recent years to address this issue. Hubs enable direct communication between devices (and often the cloud) by being embedded with multiple radios, which mitigates issues associated with a lack of interoperability. Some hubs are also capable of processing information locally, and don’t require a connection to the cloud, which addresses issues associated with data privacy and security. While devices like Amazon Echo and Google Home foster communication between devices via cloud-to-cloud integrations, hubs allow devices to rely less on the cloud and to communicate with each other directly.

However, one of the major issues with hubs is that many serve virtually no purpose other than fostering interoperability. They are simply boxes embedded with radios—no screens, no voice activation, no additional use case served. For example, the Wink hub, Samsung SmartThings hub, and the Philips Hue bridge provide no additional value outside of connecting compatible devices to each other and the cloud. Manufacturers recognize this as an issue, and have begun to embed the capabilities of gateways into the existing infrastructure of the home. For example, the Amazon Echo Plus has been equipped with a ZigBee radio, which means ZigBee devices can communicate directly with the Echo Plus and the cloud; Comcast has begun embedding multiple radios in its newest Xfinity Wi-Fi routers to act as home automation hubs.

Do Data Privacy Concerns Represent the Hubs’ Saving Grace?

This trend begs the question of the fate of smart home hubs. Will these devices persist as a means of fostering interoperability in the home? In markets more concerned with data privacy, like Europe, hubs may endure as regulations give incentive for keeping consumer information more local. Hubs can also serve a useful purpose in verticals like new construction, where builders need to choose solutions that are open. However, most industry experts say no, these devices will vanish as there is consolidation among tech vendors and networking protocols, and their functionality is embedded in a home’s infrastructure. Navigant Research expects this scenario to dominate market activity, which is demonstrated in the upcoming Residential IoT Market Overview report.

 

Trends from Light + Building 2018

— March 29, 2018

When I registered to attend the infamous Light + Building trade show in Frankfurt months ago, I never could have imagined its massive scale. This colossal trade show hosted over 2,700 exhibitors and 220,000 attendees, and featured just about any company you can imagine with stakes in the digitization of lighting design, building management, and energy—from big building and lighting tech incumbents like Siemens, OSRAM, Schneider Electric, Philips Lighting, and Honeywell to smart home and Internet of Things (IoT) startups like ROCKETHOME, frogblue, and Ubie. During the many miles I walked between exhibition halls, I observed several noteworthy trends.

From Products to Solutions

Several of the vendors I spoke with that have traditionally invested in selling products and deploying hardware are transitioning their focus toward broader solutions based on software platforms and services. For example, Philips Lighting announced a new IoT platform called Interact, which allows the company to deliver new data-enabled services to professional customers through lighting. The company also announced the change of its brand name to Signify to highlight its strategic push toward IoT-enabled smart lighting systems (not just because it was required to as part of Philips Lighting’s split from Royal Philips in 2016). OSRAM made a similar announcement at the show with its Lightelligence IoT platform for developers, as did other lighting manufacturers like CREE and Zumtobel Group, each showcasing its own software solutions to support asset tracking, space utilization, and location-based services using data collected from connected lighting sources.

Li-Fi as an Emerging Technology Trend

Other technology trends featured at Light + Building include Light Fidelity (Li-Fi). At the trade show, Philips Lighting also announced that it is now offering Li-Fi-enabled luminaires, which provide broadband internet connection through light waves. Li-Fi is a wireless technology similar to Wi-Fi, though it uses lighting waves instead of radio waves to transmit data. The technology has the potential to bring additional connectivity to IoT devices. The company is piloting the technology with Icade, a French real estate investment company.

Connectivity through Partnerships

Another set of companies working to accelerate connectivity in buildings are Schneider Electric, Danfoss, and Somfy, which announced their partnership at Light + Building. The collaboration creates a connectivity ecosystem for homes, small commercial buildings, and hotels that allows each company’s products to integrate more easily with each other at the controller level or in the cloud through application programming interfaces, making the deployment and interoperability of IoT solutions for buildings less of a barrier. Initially, the ecosystem will manage lighting, heating, and window shutters on a single platform.

Implications

These technology trends, partnerships, and solutions ultimately highlight the importance of IoT and a shift toward platforms and solutions that bring together data and connectivity to increase efficiency and optimization. Whether it be in buildings and lighting or security, health, and energy, this is a trend Navigant Research sees across a variety of industries. This transformation is discussed in relation to the energy industry in Navigant’s latest white paper, Energy Cloud 4.0.

 

Key Hurdle Stifling Smart Home Adoption Starts to Crumble

— July 11, 2017

New signs for the potential of enhanced harmony and interoperability among smart Internet of things (IoT) devices and platforms have emerged. If true, a key hurdle slowing smart home adoption would begin to crumble.

Alphabet, Apple, and Amazon

At the heart of the interoperability movement are two important market players—Alphabet’s Nest and Apple. Both actions and words indicate a willingness to make it easier for disparate devices to work together. First, Apple recently announced it will no longer require a chip called MFi to be installed in a device for the device to work with Apple’s HomeKit platform. Then, Nest followed up by telling the website 9TO5Mac that it is at least considering support for HomeKit in the wake of Apple’s newly announced iOS 11 features (that makes supporting HomeKit easier) and the fact that Apple is dropping the MFi chip requirement.

Though it is not a done deal between these two tech giants, it looks like interoperability is closer than we expected. This could help unleash a market growth phase, as buyers will not have to choose only devices that work on a single platform, but will be able to more easily mix and match from multiple vendors.

Meanwhile, a competing IoT platform, the Amazon Echo (Alexa), keeps adding important device manufacturers willing to integrate with the leading voice-activated assistant. Bosch and Kenmore have announced some products will work with Alexa. Bosch will soon sell Alexa-enabled major appliances, and a new line of Kenmore Wi-Fi-ready smart air conditioners will work with Alexa, as well.

The Future of Interoperability

The need for enhanced interoperability has been a constant theme in Navigant Research’s IoT market reports, including the one titled Market Data: IoT Devices for Energy Management, which noted the issue. These interoperability steps by key market players are encouraging, and stakeholders should take note if they want to reap benefits from a widening market.

Nonetheless, consumers have some ways to go before committing to IoT smart home technology. A recent survey among American respondents shows 85% would prefer products from a single brand, indicating they understand the problems associated with a lack of products from diverse vendors that do not interoperate. The survey, sponsored by the UK brand Hive, also highlighted two other barriers: higher prices for products and the difficulty involved when it comes to installing the latest gear that leads to the potential need for professionals to lend a hand.

As my colleague Paige Leuschner pointed out in a recent blog, the need is evident for interoperability among products from the same vendor. Manufacturers need to keep this notion in mind as people integrate older versions of devices by making the devices backwardly compatible when at all possible.

Despite the market friction, there is reason for optimism given these signs of greater IoT or smart home product interoperability. For several years, I’ve been saying devices and systems need to play nicer together, and the message seems to be sinking in, at least among some product vendors. However, market stakeholders need to pay attention to consumer thinking. The Hive survey tells us many potential buyers are not convinced the technology is ready and affordable for them to adopt—and that’s a problem.

 

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.

 

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