For many years, the smart home promised more than it delivered. Today those promises are being delivered on in so many ways, and consumer interest has risen accordingly.

Guest author

June 28, 2018

4 Min Read
An evolution in integration – the smart home is on the rise periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Thomas Rockmann, VP Connected Home at Deutsche Telekom, argues that the smart home may finally be set to deliver on its many promises.

For many years, the smart home promised more than it delivered. Today those promises are being delivered on in so many ways, and consumer interest has risen accordingly. A recent research report from Parks Associates found that 17 percent of US broadband households own an Internet-connected entertainment device and a smart home device, with an additional 13 percent of consumers owning both a connected health device and a smart home device. A massive 48 percent of US consumers plan to buy at least one connected home device during 2018, representing a tidal wave of adoption – a 66 percent rise year-on-year.

That enormous increase has had a wide range of impacts – it has driven sales, of course, it has expanded investment, and it has also triggered extremely rapid market evolution. This evolution is creating an incredibly broad range of devices, but also refining product and market focus at an astonishing rate. The results are clearly visible in the market today, both in the shape of new and dynamic products and services, but also in the gradual phasing out of legacy technology – such as smart home hubs.

Already, buyers of some smart speakers (such as the Amazon Echo Plus) get a Zigbee smart home hub already baked in, and this integration of hubs into other devices continues apace, placing the original, single use smart home hub squarely on the endangered list. Deutsche Telekom recognised this trend some time ago, and began actively rolling out software upgrades way back in 2017 to consumer routers across Germany, so that the popular Speedport Smart router can control Deutsche Telekom’s end-customer offer Magenta SmartHome devices.

A particularly dynamic area is AI-powered smart speakers – a new report from YouGov found that one in ten Britons now own a smart speaker, up from just one in twenty in Q3 2017, and over a third (34 percent) say they interact with other smart devices using their speaker. One of many applications here are home alarm systems, which are increasingly being integrated with voice-enabled AI products. A recent analyst report found that the share of voice-operated alarm systems is expected to increase at a compound annual growth rate (CAGR) of 7% from 2017 through 2022.

Indeed, the newest home hub from Centrica-owned Hive (the Hive Hub 360), has an inverse take on the integration trend, building in an 360-degree audio detector, enabling it to be used as an intrusion detection alarm system straight out of the box.

AI continues to be the dominant technology trend of the moment, and is clearly in the driving seat in integration terms. At CES 2018, Samsung announced that the next generation of smart TV’s will ship with integrated voice AI, thanks to Samsung’s digital assistant, Bixby, which will control SmartThings-compatible devices, such as Ring doorbells and Philips Hue lighting. When you consider that Samsung sold 47.9 million TVs in 2016 alone, this has the potential to bring voice-controlled AI into the homes of millions over the next few years. The current crop of AI-powered smart speakers with integrated screens certainly indicates a direction of travel here.

At Deutsche Telekom, we have also been following the trend closely and recently announced plans to speed up the transition to voice-enabled AI during 2018, with the launch of an own-brand assistant and AI-enabled consumer speaker product to control smart home devices and services such as EntertainTV.

A key underlying trend behind the product launches is that consumers continue to refuse to engage with complex sales pitches, reams of spec figures and wild claims. Any developing market has its fair share of these elements, but the real successes in the smart home market have been those products or services that offer a simple, low barrier point of entry to the market. This credo has become increasingly important as the space evolves and becomes more complex, and the increasing levels of integration in the market will be subject to the same requirements. Integration for the sake of it will not prove successful, and neither will proprietary ‘walled gardens’ be well received in the long term.

Open standards are essential in the smart home market. They enable enterprises to collaborate and work towards a more dynamic and powerful ecosystem, but also mean that the end consumer can readily recognize products that fit together, removing the guesswork or need for them to conduct intensive technical research. The result is a richer ecosystem from a business perspective, but also a more trusted and recognizable one, thanks to open standards.

It is an exciting time in the smart home market. The almost organic evolution that is taking place as we speak will bring many fascinating new products to market, and some of these will prove very successful. Integration, open standards, and innovative thinking will hold the key – let us embrace the future collaboratively!


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