Navigant Research Blog

Alexa Steals the Show at CES 2017

— January 16, 2017

CodeVoice activation took center stage at CES 2017, with Amazon and Alexa as the leading stars. I spent several days at the annual geek fest, and the device kept coming up in multiple conversations with industry players.

Alexa, formally called the Amazon Echo, is not new. The $180 device was first available exclusively to Amazon Prime members in November 2014. Since then, the device (along with its smaller clone, the Dot) and its cloud-based data service have been made available to anyone, steadily gaining a solid foothold in the smart home-Internet of Things (IoT) market. It has become a surprise hit, and vendors across the spectrum now clamor to include Alexa functionality in their devices. Companies like LG, Whirlpool, Samsung, Mattel, Lenovo, GE, and Ford have (or will soon have) products with Alexa voice technology.

From an energy standpoint, Alexa has already made inroads with smart thermostat makers to work directly with their products. For some months now, Alexa has enabled users to simply say a command, and a Wi-Fi-connected thermostat will alter the temperature to a new setting on a Nest, ecobee3, Honeywell Lyric, or Sensi product.

Waiting in the Wings

Even though Amazon’s Alexa is the clear leader of the voice activation trend, Alphabet’s Google Home device was waiting in the wings at CES to carve out its share of the market. The Home device has only been available to consumers since its launch in November 2016, but a number of vendors I spoke with already have products that can work with Home or are planning to add Home integration to their products in the near future.

While Amazon and now Alphabet are competing head-to-head for voice activation in the home, conspicuously absent in the space at CES were Apple and Microsoft—though that could soon change if rumors about Apple are true. Rumblings out of Cupertino indicate Apple is developing its own competitor to Alexa. Microsoft has its own voice-activated assistant engine called Cortana, but it is still unclear what the software giant’s strategy is in this part of the market and whether it wants to join a competitive hardware-cloud battle where it would likely start out as the number four player.

Other Connected Things: Mostly Incremental Gains

I saw mostly incremental advancements for smart thermostats, smart appliances, and numerous connected-smart lighting products on the show floor, which is not meant as a criticism. As manufacturers hone their skills, I would expect to see steady energy efficiency gains among these products as more sensors and data analytics combine to improve energy consumption. This kind of effort is difficult to achieve and takes time to develop.

Nonetheless, there was one notable product in terms of energy efficiency called LaDouche from French startup Solable. LaDouche is a residential water heater, and it was named as a CES 2017 Innovation Awards honoree for its heat exchange capability, which ostensibly can lower an electric hot-water bill by up to 80%. That is impressive (if it can be verified).

Voice Technology as Transformative

The 2017 CES was a showcase for voice technology as a transformative trend, and one that Navigant Research has pointed out as a key new input for the IoT and computing in general. This was CES’ 50th anniversary event, and the show remains one of the few places where transformative technology gets a megaphone and where one gets a glimpse of what potentially lies ahead in coming years—maybe even in the next 50. Flying cars—are you with me?

 

Giving to the Environment This Holiday Season

— December 5, 2016

LEDsThe moment Halloween was over, or in some cases before, holiday decorations were already on sale in major retail stores. With the holiday season comes added expenses—from gifts to parties to additional travel. Reducing energy consumption allows consumers to save money on their utility bills while also contributing less greenhouse gas (GHG) emissions. By selecting certain types of gifts, it’s easy to help reduce waste and environmental impact during the holiday season.

Lower Energy Consumption

Holiday lights for both the commercial and residential sectors are already an added expense this time of year. Using LED holiday lights can greatly lower utility bills. Even with the additional upfront costs compared with traditional miniature lights, LEDs are a more economical option. While incandescent lights have a lifespan of roughly 2,000 hours, LED holiday lights have a projected lifespan of upwards of 20,000 hours. In addition to their extended lifespan, LEDs use considerably less energy and thus cost less over the same operating hours as traditional lights. Although LEDs consume substantially less energy than incandescents, reducing overall operating hours will decrease energy consumption even more. One simple way to reduce operating hours is to turn off lights when no one is in a particular room or area.

Reduce, Reuse, Recycle

Many gifts for the holidays are made from recycled materials, such as recycled tires, plastic bottles, reclaimed wood, and repurposed clothes or fabrics. These types of gifts reduce environmental impact over gifts made only with new, non-recycled materials.

Reusing items comes in many forms. Purchasing rechargeable batteries eliminates waste for gifts and home electronics that require batteries. Reusing newspaper, paper bags, maps, scarves, or other fabric as wrapping is an environmentally friendly alternative to purchasing wrapping paper, which not only reduces waste, but also cuts overall holiday shopping costs. For the crafty types, holiday decorations can be made by reusing household items, such as jars, cardboard, strings, and paper.

With the increase in wrapping paper, holiday cards, cans, and bottles, it is important to recycle as many items as possible. As Navigant Research discusses in its Smart Waste Collection report, the collection of smart waste is a growing market and is expected to grow from $57.6 million in 2016 to $223.6 million in 2025. While many recycling programs could improve upon efficiency, they will accept the above listed items, making it easy to recycle instead of throwing these items in the trash. For other things such as electronics, there are often special recycling options for these items or many places that will accept them as donations.

From Thanksgiving to New Year’s Day, household waste increases by more than 25%. Reducing, reusing, and recycling can significantly decrease the amount of waste around the holidays and help form habits to continue waste reduction throughout the year.

 

IoT Device Manufacturers Cut Prices, Making the Smart Home More Affordable

— November 7, 2016

Home Energy ManagementThe cost of setting up a smart home with Internet of Things (IoT) devices is an expensive endeavor, even with recent increased adoption among consumers. Average selling prices for basic IoT devices are steep; in North America, smart thermostats cost about $220, smart lighting networks cost $103, security-home management systems cost $300, and smart plugs cost about $53, according to Navigant Research’s Market Data: Internet of Things for Residential Customers report. These devices are expensive on an individual basis compared to their dumb counterparts, let alone when purchased together as a connected home bundle.

However, there is recent evidence of increasing affordability, as seen from the launch of the new ecobee3 lite smart thermostat. The company has ditched room sensor support and dropped $80 from the price tag of its flagship product. This makes ecobee’s newest offering a more affordable option compared to those from competitors such as Nest, which sells its smart thermostat for $249, and Honeywell’s second generation Lyric thermostat, which runs $199. This recent trend of undercutting the competition on price is not exclusive to the smart thermostat market. Google recently announced that its Home offering, a voice-activated Wi-Fi speaker hub, will be released to the market at a price $50 cheaper than Amazon’s Echo.

Competition Breeds Accessibility

Undercutting competing smart devices may not be the case across the board, as Google also recently announced its Pixel smartphone at a price equivalent to the new iPhone 7 from Apple, surprising industry specialists who expected the Pixel to be priced lower than both Apple and Samsung offerings. Nonetheless, the decline in prices of connected home hardware is expected to perpetuate as industry players try to grasp hold of market share and become leaders in this space. This level of competition is making the smart home concept more accessible and affordable to consumers. Price cuts are pushing the market that much closer to a mainstream reality instead of a futuristic dream.

What this means for the energy industry is increased adoption of energy management devices and greater engagement among consumers. Devices such as smart thermostats are increasingly being bundled as connected home solutions, and as these solutions become more affordable and mainstream, energy management is expected to see increased uptake. Consumers are now finding energy management devices available through connected home solutions framed as security, entertainment, automation, or telecommunications offerings. Utilities can take advantage of this shift in the market by partnering with vendors incorporating energy devices into their connected home solutions, and by using these devices to better engage customers with energy efficiency and demand response programs.

See Navigant Research’s recently published Market Data: Home Energy Management report for more information on the nexus of energy management and the connected home.

 

Smart Home Market Plugs through Awareness Gaps and Hacks

— October 4, 2016

Home Energy ManagementConsumers have an awareness gap when it comes to understanding smart home/Internet of Things (IoT) capabilities. That’s the upshot of a recent survey by Bosch, which sampled more than 6,000 consumers in the United States and Western Europe.

This is one of those good news/not so encouraging news situations for industry stakeholders. On the one hand, two-thirds of the survey respondents were aware of smart home technology that can automatically turn off the lights when you walk out the front door. However, less than a quarter of those same respondents (22%) are aware that with enabled services, an oven can suggest recipes—though I’m not sure such oven technology is a big driver of adoption. (Foodies might disagree.)

Interestingly, saving energy was the most appealing aspect of living in a smart home, with 69% of all respondents, regardless of country, saying this was an attractive benefit. Spanish (71%), British (72%), and French (75%) respondents were particularly keen on saving energy.

Overall, French respondents were the most confident about what smart home technology can do compared to those from the United Kingdom, United States, or Austria. Respondents from Germany and Spain were the least confident about smart home technology. Not surprisingly, awareness of smart home technology decreased with age, with those in the 25-to-34 age bracket the most likely to understand the current state of what is possible.

The highest barrier to adoption of smart home technology was price, according to respondents, with 60% saying this was holding them back from embracing smart home IoT-type products.

Smart Home Hacks

Perhaps more concerning to the industry is another disturbing report about hacking of devices. According to several accounts, hackers recently hijacked as many as a million Chinese-made security cameras, digital video recorders, and other devices to mount a massive distributed denial of service (DDoS) attack. Among those infected were French web hosting provider OVH and the website of well-known American security researcher Brian Krebs. The attack on Krebs’ site was so crippling that network provider Akamai had to cancel his account because too many resources were being used in trying to defend it. Krebs himself concluded wisely, “We need to address this as a clear and present threat not just to censorship but to critical infrastructure.”

That was one of the clear message from Navigant Research’s recent webinar, The IoT Transformation of Buildings. Security against hacks must be priority number one in the connected IoT world we now inhabit, and those in the energy sector must continue to demand this protection as a priority from technology suppliers and ensure that security is paramount in all of their deployments.

SpaceX

Quick pivot: No matter what one thinks of Elon Musk and his companies, it is worth noting his bold plan to colonize Mars, which he announced on September 27. There is an energy angle to this, too, as Musk’s Dragon spacecraft will utilize two solar arrays for producing power. Two YouTube videos help explain what this is all about. There might be plenty of good reasons to be skeptical of Musk’s vision and plan. But for the moment, let’s give him credit for being a trailblazer, explorer, and dreamer. We need big thinkers like him, even if we have doubts about their ideas.

 

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