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Honeywell Spinoff and Other Strategic Moves Portend a Competitive Smart Home Market
Expect a competitive smart home market as the end of the third quarter approaches and the holiday buying season picks up in coming months. Major vendors have made recent strategic moves that portend a cutthroat period of efforts to grab market and mind share.
Opening a New Door for Honeywell
For instance, Honeywell is opening a new door on its business focused on the home. The thermostat maker continues to take steps to spin off its homes business as part of an effort to simplify its operations. In late August, Honeywell filed registration documents with the Securities and Exchange Commission to create a spinoff called Resideo. Resideo will encompass Honeywell’s ADI Global Distribution and Homes divisions, and will produce thermostats, water heaters, security devices, and sensors. In a similar move, the company is spinning off its Transportation Systems division that makes turbochargers and compressors for cars and trucks, calling it Garrett Motion.
Resideo President and CEO Michael Nefken says “Our goal is simple. We will offer a smart home experience like no other, and become the software ecosystem at the heart of the home.” The Resideo spinoff is expected to be completed by the year’s end.
Smart home competitors with deep software experience might wince at those words. Among those wincing would be members of Alphabet’s Google Home division, which is undergoing changes this summer. The company has brought its well-known Nest group back under the Google umbrella as Nest CEO Marwan Fawaz steps down. Nest products are now under the direction of Vice President Rishi Chandra, who heads Google’s home products. Look for tighter integration of smart home hardware and software from Alphabet-Google-Nest.
Amazon is not sitting still either. The leading smart speaker manufacturer keeps plugging away on various fronts. Hardly a week goes by without some new partner or company working with Alexa and the ecosystem. For instance, Amazon and home builder Lennar are teaming up to showcase smart home technology. Amazon has also quietly moved into the smart home security market.
Apple has lagged behind so far in the smart home market, but don’t count out this tech giant. Apple’s HomeKit devices are getting more affordable, and it appears the company is satisfied to steadily increase its share of the higher end of the market.
Chinese PC manufacturer Lenovo is another major tech firm gearing up for this market. The company recently announced its Smart Home Essentials suite of products that includes a smart light bulb, plug, and connected security camera. The company’s new Link app ties these devices together for users.
Not All Action Is from Manufacturers
Not all the action is among manufacturers, either. In Europe, Britain’s largest utility, Centrica, continues to push its connected home business known as Hive. Besides Britain, the company is targeting Hive in five other countries—Ireland, the US, Canada, France, and Italy—as part of its aim to reach £1 billion ($1.27 billion) in revenue by 2022. That is ambitious.Executing a winning smart home strategy presents many challenges (for an overall look at this market, see Navigant Research’s report on The Smart Home). There are risks if you focus on hardware, or software alone, or try a services-only play. Also, you need to find the right channels to reach consumers who can be fickle when it comes to adopting newer technologies that have yet to mature. The likely winners will be those vendors who balance hardware and services and can sustain their leadership roles with solutions that deliver lasting value to their customers.