Navigant Research Blog

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.

 

Amazon’s Key Service Echoes Growing Concerns Over Privacy and Security

— January 2, 2018

Amazon’s latest service innovation has raised questions about how far the boundaries of technology can be pushed to make consumers’ lives more convenient. The Amazon Key delivery service, along with the Amazon Cloud Cam and a compatible smart lock, allow users to grant access for in-home deliveries. The service solves issues around package theft and customer availability to receive a package. It works by sending the user a 4-hour window on the day of delivery and confirming the assigned courier is at the correct address at the intended time by scanning the package barcode. When the package is scanned, the user receives a notification of the imminent delivery, the Cloud Cam is activated, the door unlocks, and the user can watch the delivery in real-time or check back later to ensure the delivery went well. The service was made available in 37 cities for tens of millions of items in November 2017. This sounds simple and straightforward, but media and industry specialists are scrutinizing the limits this service approaches by letting strangers into people’s homes. And to be fair, there are already issues with it, including a flaw that allows couriers to disable the security camera and door lock (which Amazon has promised it will fix).

Can Security Solutions Tamper Concerns?  

This new service is one among many offerings in the residential sector that emphasizes growing concerns over consumer privacy and security. From the common belief that our beloved social media sites are spying on users to publicized hacks of big name brands resulting in leaked personal data, consumers are increasingly wary as technology becomes a more intimate part of their lives. Stakeholders across the value chain recognize the need to implement more robust security solutions, and new regulations that aim to protect consumer data are emerging, such as the General Data Protection Regulation (GDPR). But for many, cybersecurity is only starting to become a priority, and companies are still figuring out how to deal with growing threats.

Threats of Scale

Data privacy and security become especially complex in the consumer electronics world because the home is a sanctuary and should be private and secure. At the same time, the hacking of a Wi-Fi router has much lower stakes than the hacking of a power plant and can be considered less of a priority for investment in security. Manufacturers promise data privacy and secure devices, but customer sentiment does not always resonate with these assurances. There is also the question of responsibility and whether the manufacturer, chip provider, wireless protocol alliance, or the consumer should be held responsible for security and data privacy. Consumers want to partake in social media, adopt smart home devices, and lead more convenient lives, but don’t want to feel like they are being watched, listened to, or followed, and they don’t always understand the risks associated with using technologies (such as the collection and sales of personal data).

Convenience vs. Safety

Privacy and security are increasingly affecting consumers at home. Residential customers are skeptical of technologies that have the potential to compromise privacy and security, which is affecting market growth. In order to progress the Internet of Things in the home, it is important for stakeholders in the residential space to be transparent with users about the measures they take to ensure the security of devices, software, services, and data privacy.

 

Delay of HomePod Shows Signs of Weakness in Emerging Smart Home Market

— November 21, 2017

Apple has made big news this week—but not in a good way. On Friday, the company stated that it would be delaying the release of HomePod from a non-specific date in December to the even more ambiguous “early 2018.” The delay is a blow to the tech giant, which will miss the relatively high sales volume that comes with the holiday season. The new release date also means Amazon, Google, and Sonos remain largely unchallenged in the connected speaker market and will continue to gain the hearts and minds of consumers with their devices, some of which have been available for years. What may be worse for Apple is that the HomePod will be released at a price of $349, which appears obscenely high against the two rival speakers from Amazon and Google (which are currently in a price-cutting battle and peddling the miniature versions of their signature devices at approximately $34 for Black Friday). Though Apple is focused on offering a high quality speaker with advanced sound technology, this high tech move may not be enough to win consumers over and help the company gain market share in the young connected speaker market.

This type of delay is nothing new for Apple. The company regularly sets ambiguous release dates and delays product shipments, from the original Apple Watch to Apple AirPods to HomeKit-compatible devices. It is also known for entering an already developed market and disrupting it, which occurred with the release of the iPhone. This means the delay of HomePod could be nothing but a small hiccup in holiday sales for Apple and that it could still emerge as a major player in the connected speaker industry.

Time to Get Serious

However, the larger implication of this delay is that Apple is losing out on its spot in the smart home. The smart home is becoming an increasingly competitive space, with large tech incumbents, service providers, utilities, and startups all getting involved and vying for market share. The ability to own the smart home opens up a world of opportunities for companies, including new service-based revenue streams and more personalized engagement with consumers. The connected speaker has become a pivotal part of the smart home’s development by acting as a centralized hub and fostering interaction through voice activation. To lose out on this opportunity could be devastating to Apple, especially since the company already has a trusted device in people’s pockets that is a key tool for controlling the smart home. The smart home market is progressing with or without Apple, and it’s time for the company to get serious about becoming a major player in this market or letting Amazon and Google take the lead.

 

Digital Assistants Are a Stepping Stone for Artificial Intelligence in the Home

— November 21, 2017

Artificial intelligence (AI) is gaining hype and capturing headlines about its futuristic possibilities. Popular media, like Blade Runner 2049, depicts AI as a technology powering human-like robots with capabilities for taking over the world. In reality, AI is here, and it is already used in everyday lives. Today, AI is enabling ridesharing applications like Lyft and Uber, autopilot in commercial flights, mobile check deposits, online shopping, and more. The technology is making significant progress across a variety of markets and is spreading to the smart home.

The home is abundant with opportunities to automate tasks and create more personal experiences with technology. AI can be used to enhance solutions that help consumers better understand and manage energy consumption and keep homes safer and more secure. Also, it creates more intelligent and intuitive home automation by studying patterns of human behavior to operate the home more efficiently.

The Digital Assistant

One obvious way in which AI is spreading through the home is digital assistants. Digital assistants, or virtual assistants, are the human-like user interface embodying AI software and cloud services. They are fundamentally changing the way users interact with technology by creating an easy-to-use, hands-free, and conversational experience via voice activation. They also represent a platform that converges devices, data, services, computing power, and the internet to better understand and anticipate consumer needs. While the novelty of using digital assistants is driving adoption and market growth (try playing Jeopardy with Alexa), this technology has powerful implications. Many companies recognize this potential, and large tech incumbents like Amazon, Google, Apple, Samsung, and Microsoft are quickly and heavily investing in AI and digital assistants for the home.

Though digital assistants promise market disruption and a fundamental shift in the use of technology, it is important to stay realistic about AI in the home. Some would argue that traditionally defined AI does not even exist in the home—they would argue it’s all just analytics and algorithms. Others would argue that this is the reality of AI—it isn’t glamorous, it’s about automating tasks and identifying behavioral trends to make our lives more comfortable, convenient, and efficient. How this technology will play out—whether it will be a benevolent and revolutionary technology or whether it will become an existential threat to human existence—remains to be seen. For now, AI is having an impact in the home in the form of digital assistants. Check out Navigant Research’s Digital Assistants and AI in the Home report for more information.

 

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