Smart Home. Connected Objects. A promising market, taking off slowly. M15187MRA November 2015
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1 Connected Objects Smart Home A promising market, taking off slowly M15187MRA November 2015 This document is a part of our "Connected Objects" category which includes in 2015: - 1 dataset in Excel, updated yearly - 1 state-of-the-art report in PowerPoint, updated yearly - 4 market reports in Word, each with its synopsis in PowerPoint - Privileged access to our lead Internet technologies analysts
2 Author: Tiana RAMAHANDRY, Consultant Tiana Ramahandry has been a senior IDATE consultant since Her assignments are mainly focused on the telecom equipment sector and equipment supplier strategies. She specifically works on telcos infrastructure evolution with expertise on traffic management and content delivery networks. Tiana Ramahandry holds a post-graduate professional degree in Cable Networks, from Lille University, and a Masters in Business Administration from the IAE at Bordeaux IV t.ramahandry@idate.org About IDATE and DigiWorld Institute Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialized analysts. Now, with the support of more than 40 member companies which include many of the digital economy s most influential players the newly rebranded DigiWorld Institute has entered into a new stage of its development, structured around three main areas of activity: IDATE Research, an offer of market intelligence publications IDATE Consulting, time-tested analysis DigiWorld Institute, a think tank on the digital economy. Contact us for further information on our publications Isabel Jimenez P: +33 (0) F: +33 (0) i.jimenez@idate.org Copyright IDATE 2015, CS 94167, Montpellier Cedex 5, France All rights reserved. None of the contents of this publication may be reproduced, stored in a retrieval system or transmitted in any form, including electronically, without the prior written permission of IDATE. IDATE, DigiWorld, DigiWorld Institute and DigiWorld Yearbook are the international registered trademarks of IDATE.
3 Contents 1. Executive Summary Methodology & definitions General methodology of IDATE's reports Definitions What is covered by the smart home umbrella? The different types of smart home offerings Technologies & customer benefits Technologies Key technologies for connectivity Interconnection required Consumers benefits and expectations from the smart home Key players Initiatives from home equipment suppliers Consumer electronics vendors Household appliance providers Home energy management system providers Security and safety system providers Pure players Home automation system providers New players in the home Telecom operators AT&T Deutsche Telekom Internet giants Apple Google Other service providers Market trends Market drivers and barriers Market estimates IDATE
4 Tables & Figures Table 1: Key differences between Wifi, Z-Wave, ZigBee, Thread and Bluetooth Low Energy (BLE) Table 2: Current protocols used per category of smart home devices Table 3: Smart home players positioning Table 4: Presence of pure players in smart security Table 5: HomeSeer range of products Table 6: Telcos initiative in the smart home Table 7: Integration of smart home equipment in the household by *** Figure 1: Concept of the smart home... 8 Figure 2: Interests in purchase smart security systems... 9 Figure 3: Importance of security in smart home adoption... 9 Figure 4: Smart home architecture Figure 5: IFTTT concept Figure 6: GE utilisation of IFTTT Figure 7: Overview of all current frameworks Figure 8: Expected energy savings from smart home Figure 9: Role of smart TV in content consumption Figure 10: Line of smart home products Figure 11: Samsung smart home platform Figure 12: SmartThings, Samsung home automation solution Figure 13: Samsung Smart home app Figure 14: Samsung SmartThings kit Figure 15: Sony smart home portfolio Figure 16: LG HomeChat system Figure 17: Philips Hue products Figure 18: Light bulbs connected to Wink Hub Figure 19: Wink Relay Figure 20: Traditional suppliers and access to end-user market Figure 21: Legrand application MyHome Figure 22: Verisure scope in smart home Figure 23: Control4 smart home interface Figure 24: Products compatible with Control Figure 25: Insteon product family Figure 26: WeMo smart home portfolio Figure 27: Sonos speakers Figure 28: Withings Home Camera Figure 29: AT&T Digital Life service Figure 30: Qivicon concept by Deutsche Telekom Figure 31: Deutsche Telekom Qivicon business model Figure 32: Apple Homekit Figure 33: Brillo, the Google operating system applied to the smart home Figure 34: Main Google smart home products Figure 35: Price as the main barrier of smart home adoption for users Figure 36: Broad smart home landscape Figure 37: Standards initiatives relevant to the Smart Home Figure 38: Smart home market evolution, by region, IDATE
5 List of players examined / mentioned ADT Allianz Apple AT&T Belkin Bouygues Telecom Comcast Control4 Deutsche Telekom GE Google Hager HomeSeer Insteon Legrand LG Netatmo Orange Panasonic Philips Samsung SFR Sonos Sony Telefónica Time Warner Cable Verisure Withings IDATE
6 2. Methodology & definitions 2.1. General methodology of IDATE's reports The methods employed by IDATE s teams of analysts and consultants are based on an approach that combines: research and validation of data collected in the field; the application of classic industry and market analysis tools: segmentation, competition analysis, strategic strengths, modelling, assessment and forecasts ; the expertise of specialists who contribute their own analytical capabilities and those of their network of market analysts. More specifically, the tools employed by IDATE s teams are comprised of: 1/ A multi-disciplinary team of full-time consultants, specialised by sector of activity IDATE s analyses are performed primarily by our in-house consultants, and very occasionally by freelance market analysts. This approach allows us to capitalise on our pool of expertise through teamwork, sharing knowledge, ideas, contacts, viewpoints and key data. Each report is drafted by a team of specialists, overseen by senior consultants with a proven track record in their field. 2/ Primary and secondary research IDATE reports and databases are compiled from primary data obtained from one-on-one interviews with the sector s decision-makers, and on secondary data which is established by cross-referencing public sources and external databases. 3/ An integrated information centre sustained by a number of tools and proprietary databases Over the past 30 years, IDATE has established working and data organization methods and proprietary databases that trace the central chapters in the history of our sectors of expertise. Companies: IDATE s in-house data service tracks the latest news and events to come out of the top telecom, Internet and media industry companies around the globe. Innovative firms and start-ups are monitored by market experts in the different Practices. Markets: IDATE s databases are derived from rigorous processing of fundamental economic variables (GDP, investments, exchange rates, demographics, etc.) and their relation to decisive sector-specific and national elements (capex, national market dynamics, etc.). Technologies: IDATE s organization by Practice provides us with an efficient means of tracking innovation. IDATE s engineers ensure in-depth understanding of the changing shape of products and services and the latest innovations in the marketplace. 4/ Contents of the published reports Each IDATE market report details the structures and issues at play in the market being examined, the decisive forces (technologies, regulation, consumption) and the players involved. Particular emphasis is given to market assessments and forecasts, as part of the central premise. All market reports are laid out in a clear and concise manner, and illustrated with tables and graphs of key market data and trends. The process of drafting a market report includes the following stages: analysis of the information available in the in-house databases, and review of analyses performed in the recent past; based on a preliminary segmentation and assessment of the market, and as part of an validated interview guide, analysts conduct interviews that enable them to validate working hypotheses; a market model is then established, making it possible to test the hypotheses that have an impact on market development, and validated by a new round of interviews; and, finally, the report s conclusions are debated with the team responsible for the project and with expert consultants from the various fields involved; a final proofreading and editing/revision process, prior to the production of the final version of the report which is delivered to the client. 5/ Market assessment and forecasts Primary data gathering worldwide. Market models that isolate key service consumption parameters and service pricing assumption. IDATE
7 2.2. Definitions What is covered by the smart home umbrella? The Smart Home or Connected Home is considered as part of the Internet of Things. In this report, Smart Home refers to the concept involving a set of technologies to intelligently manage several functions in a home. The smart home is seen as a way to regenerate the home automation market, especially with the development of DIY (Do-It-Yourself) and connected solutions. Indeed, home automation refers to all the techniques used to monitor, control, automate and programme the home and to assist the people inside it; the concept is now applied to a multitude of objects in a house including appliances, energy, safety and security systems, with the ability to talk and interact with each other. Consequently, the scope of the smart home is very wide, as it encompasses everything in a household that can be connected including non-it devices. For this market report the following sub segments are considered in the smart home scope: Consumer Electronics related to entertainment equipment (TV sets, games consoles) but also many everyday objects that are not by nature connected, such as weather stations Home appliances: washers, dryers, refrigerators Home energy related to energy management and climate control systems, mainly HVAC (Heating Ventilation Air Conditioning systems Safety encompassing lighting, window and door control systems Security and access control systems including motion sensors, cameras and alarms. The scope of the smart home is definitely wide and the frontier with other IoT markets is blurred. In the literature, other areas such as healthcare, wearables and cars are considered part of the connected home. Figure 1: Concept of the smart home Source: smart home energy The different types of smart home offerings Smart home solutions can be considered according to different forms of products and services: Basic household devices equipped with a connectivity feature that can be controlled remotely from a smartphone or a tablet, which is the bulk of the current smart home market. The development of these devices is benefitting from the DIY trend. IDATE
8 Derived from home automation systems, the smart home hub. The smart home hub s job is to connect a variety of devices that can be controlled through a smartphone app, usually running on both ios and Android. Generally, the hubs are provided with sensors (motion sensor, open/closed door sensors ). Basic functions include the remote control of lighting, cameras, energy management, switches and appliances. The key differences between the hub offerings are the ability to connect devices and appliances from other brands and also the ability to support conditional behaviour on the application. Indeed, this implies interaction between different objects, whereby typically, object A works when object B detects an event. Smart home services, which are generally in a form of subscription to services, which provide home monitoring for security or energy management purposes; though for now, those services have not benefitted from the same attention as fancy smart home products. Safety and security for peace of mind Improving lives and access to new services for peace of mind are other key factors driving motivation to connect objects inside and outside the home. Typically, security is the application people are ready to pay for. Smart home security systems refer to systems that alert the householder if something abnormal happens such as fire, intrusion. Different types of offerings are provided in security, based on motion sensors, alarms (fire, smoke, CO ), video cameras, home automation systems and smart home services that can detect any intrusion in the house from anywhere and alert an emergency centre if needed. Indeed, for more peace of mind, people are prepared to pay for more security with a monitoring service. Remote control of lights, door locks or appliances (checking if the oven is off) when away are also smart home features for more safety for household occupants. Figure 2: Interests in purchase smart security systems Source: KRC Research Figure 3: Importance of security in smart home adoption Source: essence-grp Comfort and convenience Lastly, making life more convenient and fun thanks to connected home systems could also be one of the drivers. Monitoring air quality and humidity are examples of applications that could help inhabitants improve their lives as well as entertainment systems such as multi-room audio. IDATE
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