Our observations tell us the “connected home” concept is becoming prevalent in homes and is now to a certain extent a part of everyday life. Vendors focus on selling devices that control the home whilst collecting data about it. Connected home vendors through the use of smart home devices are able to track how home owners consume energy and their day to day movements and patterns. These vendors use this data to push information back to the consumer in a format that is easily understood and that can be impactful on families’ home budget as well as their environmental footprint.
In addition, many connected device vendors are trying to capitalize on monthly subscription data for services such as the storage of video footage from HD cameras. Unlike connected car the barrier to entry is far less in that consumers derive immediate and obvious benefit from the devices and with little associated cost outside of an internet connection. The benefits of a connected home appear to the consumer to be free excluding the device cost.
The market is saturated with countless similar offerings but certain vendors have changed the game and offer home hub products that control their native devices as well as devices from established partners. They have done this in order to be the central control point of all connected devices as well as the primary collector of home data and the primary contact with the consumer.
The home hub offerings are competing with each other and it is currently impossible to control any device on the market with one home hub vendor. Examples of this include Wink, Nexia, Hue, Lutron. Clearly a leader might emerge in the future.
Consolidation and acquisition is very likely to occur as the market becomes more crowded and we see major organisations such as Apple, Google and Microsoft acquiring companies in the smart home space in order to form part of their all encompassed offerings.
As with connected car, the vendors who are able to position themselves to consumers as the central control point will be able to collect the most extensive set of data. From there monetization of the data, from other monthly subscriptions for basic services will be extremely lucrative, varied, and easily able to reach far outside the home. We see this impacting utility companies, telecom service providers, internet service providers and insurers to name but a few – it is here that we see an opportunity.
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