Will the smart home belong to Apple?


2014-06-24, 08:35 Posted by: Peter Tyreholt

During the latest 20 years there has been talk about the smart home or home automation but it has never really hit mainstream until maybe now. During the last couple of years a lot of connected and smart products have started to emerge for the smart home. Early on they were mostly for techies and later on driven by NEST (among others)very stylish gadgets, but with all the devices it has not been any general interoperability for the smart home but more like an Intranet of things from the same company.

At WWDC by Apple in early June they launched their HomeKit which is a framework for creating the interoperability among smart home devices with an IOS device in the center, so it is still not the general interoperability but it is a larger interoperability than before if Apple succeeds to convince hardware manufacturers to enroll into the program.

Apple is not first to try to claim the smart home ecosystem (Verisure, EON, Smartthings, Samsung etc) and they are not even the first with the platform/framework approach for the smart home (Smartthings, Android @ Home, and newly announced Works with Nest etc), however will they be able to succeed?

With HomeKit Apple is creating one more walled garden around their products where they need to convince the hardware manufacturers to comply with a certification program including the communication protocols, handover control of the device data and the ownership of the home configuration to Apple. So what is Apple giving back?

Apple's biggest advantages as I see them are:

  • Their loyal customer base where many are "all Apple homes"
  • The install base of IOS devices and especially in the US with over 40% market share
  • The access to Siri for interaction and TouchID fingerprint sensor for security

This all looks good BUT when looking at the numbers for France, Germany and Spain we have a Android dominance going from 65% to well over 80% and while the HomeKit would work fine for IOS devices it does not cater to any other platform. This will be a big problem for the smart home manufacturers, while there is today not a single smart home ecosystem to integrate against which means that they will need to have parallel product lines or handle several communication protocols and multiple integration levels in the same product.

My guess is that Apple will have limited success in dominating the smart home with HomeKit outside of the USA and some selected countries as long as they are limiting the HomeKit to the IOS platform, I just think that the smart home is way bigger than that. Unfortunately this does not mean that the hardware companies can dismiss it because when we still are in early stages of the smart home adoption I think that the IOS installed base have many of the target customers for a premium connected home product!


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