Visions of the smart home – a house that can set its own thermostat, schedule its own lights and preheat its own ovens – are reality. The technology is becoming smaller, faster and cheaper, opening new opportunities for transforming everyday objects.
The “Internet of Things,” the industry term for the expected web of connected products, is expected to generate $1.7 trillion in spending by 2020, according to projections in a report by International Data Corporation. That would be astonishing growth considering the technology was almost non-existent just five years ago.
Jumping on that wave is a no-brainer for companies, which are trying to convince consumers that everything could be better with a chip.
There’s a buffet of options out there now. For around $200 you could pick up a smart thermostat that lets you control your home’s temperature from anywhere. You can pick up packs of sensors to make any outlet “smart” for about $60. Or you could pay a company such as AT&T, Comcast or ADT to do a lot of the work for you, for as little as $20 or $30 per month.
That’s where, for consumers, it gets a little more complicated. Because while you may think you’re buying one gadget – a thermostat, a security system, a smart lock – what you’re really buying is the cornerstone of a whole system of smart devices that need to work together. By extension, the first smart home device you buy may determine the brand of your next refrigerator, security system or even your car.
“Consumers are asking: If you buy a Nest, are you stuck with Google for the rest of your life?” said Jefferson Wang, of IBB Consulting. “If you buy an Apple TV, are you stuck with Apple?”
The stakes to produce the first “I need it” home gadget are high. And tech giants, who are watching sales of smartphones hit a plateau in high-spending markets, are racing to find it. Google and Apple have both laid out ambitious plans for the smart home. The area was a main focal point for Google at its developers conference last week and is expected to be a showcase at Apple’s big developer confab next week. Apple has already released guidelines for developers that state that the Apple TV, the company’s set-top box, will be the hub for compatible smart devices.
Analysts say they expect this battle to play out as an extension of the war between Apple, Google and a few other specialty players for early dominance. The first to really crack the idea can capitalize on the gadget “halo effect” – the consumer tendency to buy gadgets that are compatible with ones they already have, which locks them into one of those companies’ worlds.
Apple and Google certainly appear to hope so and are applying the same strategies they used in the smartphone era to the connected home.
Apple’s reputation for quality and the loyalty of its fans give it a certain edge, said Jefferson Wang of IBB Consulting. “Apple’s iOS is strong, and tends to have faster adoption,” he said. But, he added, “in Google’s favor, Android has a huge developer community, a huge number of customers and existing products like the Nest,” a successful smart thermostat made by the company of the same name. Google bought Nest in 2014, for $3.2 billion.
Nest’s appliances, as well with its Dropcam security systems – the result of another acquisition – have already given Google early home gadget success. And last week, the firm announced it would expand its ambitions even further with a smarthome platform, Brillo, to developers looking to make smart devices for the home that work with other Google-based doodads such as the successful Nest thermostat.
That comes a year after Apple first announced its plans for “HomeKit,” a platform centered around its own software. On Tuesday, the first official HomeKit devices hit the market, all of which can be controlled through an iPhone app. The launch partners included electronics firm iHome, major smart light bulb maker Lutron, and Elgato, which makes sensors that monitor air quality, humidity, water consumption and energy use. The products work with Apple’s Siri as well, meaning that the voice assistant can now turn on your lights, check your monitors and act as a general remote control for your home.
It’s far too early to predict who will win, said Mark Hung, an analyst for Gartner.
“Unlike in the PC or smartphone markets, neither have come out with a whiz-bang story of why “the average person” needs this. It’s still in the exploration stage,” he said.
And Apple and Google aren’t the only dogs in the fight, either. There are scads of competitors out there with their own technologies, services and products that are trying to capitalize on what they think consumers want from a smart home. Game console makers Microsoft and Sony are building out their offerings to try and control the living room through their forays into entertainment and gaming. AT&T and Comcast, meanwhile, are adding on to their positions as Internet providers to include smart security systems. More traditional home appliance makers such as Honeywell and GE are also joining forces to make their own standards.
And then there’s Amazon, which hasn’t competed much with Apple or Google on the hardware front in the past, but has taken some small steps into the home, analysts said. Last year, the company introduced the Echo, a standalone cylinder that has a voice assistant of its own. Through the Echo, users can add items to their shopping lists, ask the device for answers to basic questions and listen to music. (Amazon chief executive Jeff Bezos owns The Washington Post.) Over time, Amazon has added support for Belkin’s WeMo line or smart switches and even for Google Calendar, so users can use the Echo to turn off the lights or get a summary of their daily schedule.
Amazon’s offering is the first representation of how we may interact with our smart homes in the future – by speaking to them in the style of the “Star Trek” computer. But the product is pretty limited at the moment, Wang said. “Amazon’s always going to be looking for areas to push the core business – which is ultimately shopping,” Wang said. “Echo is a fun product, and an interesting one. But I don’t think they’re on the same level at all as a Google or an Apple.”