Navigant Research Blog

IKEA Expands in Smart Home Market with Lighting

— June 16, 2017

The smart home market is filled with big name companies like Amazon, Google, Apple, Honeywell, Comcast, Lowe’s, and AT&T, and now another large incumbent is expanding into the smart home space. Traditionally known for its well-designed, inexpensive, and easy-to-assemble furniture, IKEA recently introduced a line of smart lighting products called TRÅDFRI, or “wireless” in Swedish. The TRÅDFRI smart lighting product line includes a ZigBee gateway device, connected bulbs, a remote control, and a motion sensing dimmer switch, as well as LED lighting doors and panels. The dimming kit starts at 749 kr, or about $85. A similar offering from Philips includes a gateway, two Hue bulbs, and a dimming switch and starts at a price of $129.99.

Home Tech Innovation

IKEA claims that this new product line is part of its long-term commitment to its home tech innovation initiative Home Smart. The company first began offering smart products in 2015 with furniture and accessories that include wireless charging for compatible smartphones. The company is furthering this vision not only with its TRÅDFRI lights, but also by integrating the smart lighting products with voice control through Google Home, Apple HomeKit, and Amazon Echo devices. Voice control capabilities will be available beginning this summer. IKEA’s goal is to make smart home products easy to use and affordable for everybody, and its expansion in this space with its smart lighting shows this commitment.

Relative to other various smart home technology markets such as smart thermostats, smart plugs, security cameras, door locks, and smart meters, the smart lighting market is still in its early stages. Navigant Research’s recent Leaderboard Report: Residential Connected Lighting currently pegs Philips as the market leader; however, there is plenty of room for other companies to gain traction in this space, and activity is ramping up. Some lighting incumbents have yet to offer connected lighting products in the residential lighting space, and startup companies never before involved in the lighting are becoming engaged, such as ecobee with its new Alexa-integrated light switch. Thus, big name companies like IKEA can still gain traction and become leaders in the space through more innovative and affordable products.


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.


Apple Finally Introduces HomePod to Rival Echo and Home Devices

— June 7, 2017

Rumors of an Apple-branded smart home speaker have finally come to fruition with the introduction of the HomePod on June 5. This speaker has been a long time coming; some reports indicate that the HomePod has been in development for the past 2 years. Navigant Research covered these details in a blog on competition in the smart home market in September 2016. But don’t get too excited yet—the speaker will not be available until December 2017 in the United States, United Kingdom, and Australia—and it will cost a whopping $349.

Part of the reason for this steep price is that Apple is attempting to differentiate this speaker from Amazon Echo and Google Home speakers with more advanced microphone and speaker technology. According to reports, when a HomePod is first activated, it sends out a 360-degree beam of sound and plays differently according to its environment (a bookshelf or wall nearby). Supposedly, it also automatically connects to other HomePod speakers nearby and the speakers will adjust their respective sound output to make sure they work well in tandem. Thus, the HomePod is considered a premium product because it is not only a powerful music player, but it also has smarts.

Apple-Enabled Smart Home

Perhaps one of the more important features, however, is that this speaker is embedded with Siri, which has been utilized on iPhones since late 2011. This has larger implications for an Apple-enabled smart home, as the HomePod speaker will now act as a hub for Apple’s HomeKit platform. HomeKit has integrations with a range of manufacturers, including Logitech, Lutron, Honeywell, and Leviton, among others.

Although this sounds like the perfect tipping off point for Apple, the company may struggle to gain traction in the smart home market compared to its competitors. Amazon Echo, which was introduced to the US market in 2014 and the UK market in late 2016, has been a surprise success among consumers. Amazon Echo sales were estimated at between 9 million and 11 million devices at the beginning of 2017. While Google only recently introduced the Home and is still gaining traction in the market, the capabilities of Google Assistant are reportedly some of the best available today (in terms of actually being able to perform functions with the speaker outside of simply playing music). Assistant utilizes other Google resources such as Gmail, Google Calendar, Google Maps, and its infamous search engine.

Interoperability Issues

Apple will also face challenges due to interoperability issues. The HomePod is part of a much more closed off ecosystem of devices and applications than those of Google and Amazon, which have had more time to integrate with third-party devices and are generally more open to playing with others. For example, while Apple is playing the “totally rocks the house” card with this speaker, Siri will only link to Apple Music. Spotify, Amazon Unlimited Music, Google Play Music, and YouTube customers will not be able to use Apple HomePod to play music. This could drive consumers to shift to Apple Music or it could make them frustrated and more likely to adopt other, more open solutions.

Though it remains to be seen how Apple will fare with its new speaker, this product release represents another major player becoming more involved in the smart home. The smart home is increasingly becoming a reality. With major stakeholders investing more in connected products and services, it’s only a matter of how the market develops and when it becomes fool-proof and mainstream.


Alphabet-Owned Companies Making Smart Home Moves Across Europe

— April 12, 2017

Through its subsidiaries Nest and Google, Alphabet has been active in the US smart home space. On April 6, Google Home finally made a leap across the pond, launching in the United Kingdom 5 months after its launch in the United States. Google Home is Google’s response to the Amazon Echo, which has been available to consumers in the United States since 2014. One of the main appeals of the Google Home is its ability to integrate with other Google applications, such as its search engine, calendar, Pixel smartphones, and most recently, Google Wi-Fi.

Fellow Alphabet subsidiary Nest has had its Nest Learning Thermostat, Nest Protect, and Nest Cam installed in more than 190 countries. However, these products have only been available for purchase in seven countries. This is quickly changing, with the company announcing that it would expand sales to Austria, Germany, Italy, and Spain as of February 15 and to Mexico as of April 4. The company stated that it plans to continue expanding globally as demand continues to grow and that it is looking to partner with energy, insurance, and telecom providers as a method for making its devices more available to consumers.

The Race for European Markets

Alphabet is entering the European market at a time when few other players have traction across multiple countries. Apple’s HomeKit product has yet to launch in the United Kingdom, while Samsung SmartThings is selling in the United Kingdom but is not present in other countries. Amazon devices are available in the United Kingdom and Germany, but only as of late 2016. Point solutions exist and are gaining traction—such as tado’s smart heating solutions that sell in a variety of countries or Quby, a smart thermostat and home energy management company acquired by Dutch utility Eneco. However, these companies may not have the resource support of bigger players like Nest and Google.

As Alphabet makes moves across Europe through its subsidiaries, the tech giant is pushing forward progress in the smart home sector. The United States tends to be the main market for companies focused on the smart home, as is the case with many tech solutions and innovative offerings. In terms of energy, this can be attributed in part to the difference in heating and cooling systems across countries in Europe, where it is harder to approach the market with one solution and where devices often have to be completely redesigned. However, Europe is a hotbed of smart home potential, with energy-conscious consumers accustomed to innovative technologies for reducing emissions, such as solar. Alphabet’s engagement in the European market could help propel the smart home industry forward and significantly increase uptake in energy management devices.


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