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Smart Home: Beyond Technology
Envisioning how the ecosystem could work
Daniel Shepherd VP, ICT
Frost & Sullivan
June, 2012
Contents
Suggesting what the industry and/ or specific players need to consider and do next
Introduction
The Big Picture
Challenges
Ecosystem
Business Models
Way Forward
Mapping who is who and who is doing what and who would like to gain what
Top-down review of key issues, allowing us to highlight that that stakeholder fragmentation and competing interests are a core issue underpinning many of the others
What is a smart home and why are we talking about it again now?
Outline of 2-3 strategic options we see as to how it could all come together and exposing a preliminary evaluation
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The Big Picture: What is the Smart Home?
Back
What is a Smart Home?
A Smart Home is a home that integrates automation to control and monitor many internal functions such as heating, lighting, security and multi-media.
It is an evolving concept that has seen a renaissance in recent years as home automation and broadband networking have achieved higher global availability.
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Source: Timberline Geodesics (used with permission) Source: Stratecast/ Frost & Sullivan
Smart Home: Major Themes
Telemetry:
Utilities, Healthcare, Security
Content:
Delivery, Management, Distribution
Communication Services:
Voice, Video, Data and Wireless
Home Networking:
Distribution, Management, Control and Automation
Smart Home: Why Now? (or why again?)
Smart Homes have been around since the ’60s, but now are beginning to resonate. Why?
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Many homes now have entertainment centers that combine video and other content consumption. They also have access to broadband data services and many have home security systems.
Inherent Needs
Complexity
Regulatory
Technology Availability
Consumers are increasingly interested in services that enable safety, more efficient use of utilities, life simplification, etc.
The need to conserve and reduce the cost of energy is driving interest in ways to manage utility costs
Broadband and wireless now deliver data access to the home Data Ubiquity
Home automation and networking technology are now easier to do: Wi-Fi, data over power wiring, prewired new construction
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Challenges
Back
Challenges
1. Business Model Consumer value perception: consumers aren’t clear what a smart home is or what it
should cost Yet, the market for smart home solutions is fragmented, with many smaller players
offering partial solutions Communication services are becoming tightly integrated: the smart home solutions must
work with other communications services and technology
2. Funding Model
Focus on low margin access services compromises ability to invest in smart home offerings that enable higher margin revenues
Entry into home networking and automation space demands the creation of an extensive installation, maintenance and management infrastructure
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Consumer Uncertainty
Yes 29%
No 43%
Don't know 28%
Would you be interested in a smart home?
Problem: Low perception of Value
Source: Stratecast/ Frost & Sullivan
Would you be willing to pay extra for smart home products or services?
Market Fragmentation
The market is extremely fragmented: – Thousands of home electronics manufacturers – Hundreds of communication service providers – Thousands of home electronic maintenance providers – Thousands of home networking installers – Dozens of telemetry providers
There are essentially no comprehensive solutions for the interested
consumer that include everything from installation to support and repair and which include content delivery services as well as monitoring services Remember: consumers want ease of use
0%
5%
10%
15%
20%
25%
30%
35%
40%
Ease of Use
Customer Service
Billing Quality Value Pricing
Importance of Offering AttributesVery Important
Consumers Dislike Complexity
Offerings must be easy to implement and use Source: Stratecast/ Frost & Sullivan
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The Smart Home Ecosystem
Back
Smart Home Ecosystem
Communication Service Providers
Home Networking
and Management
Installers, Vendors, etc.
Content Providers
Monitoring Services: Health,
Security, Utility
The Smart Home Ecosystem
Many providers in each domain:
– Communication Services: AT&T, Verizon, British Telecom, Deutsche Telecom, France Telecom, Rostelecom, etc.
– Telemetry: ADT, Monitronics, SDG, Overlook, FrontPoint, etc.
– Content: AT&T, Verizon, British Telecom, Deutsche Telecom, France Telecom,
Rostelecom, Hulu, YouTube, etc.
– Home Networking and Automation: X10, NetGear, D-Link, Cytech, MarmiTek, Sonos, Nuvo, etc.
Few complete solutions, although some are coming close:
– AT&T Uverse as an example
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Who Should Lead?
The essential component of the smart home is the network connection – controlled by the network operators. Every other segment of the ecosystem must either ride the network or
interface with it. This would seem to make network operator leadership in the smart
home market, obvious…wouldn’t it? But wait…network operators needn’t be in charge.
In fact, the smart home is largely accessed through easy to use
interfaces and these can come from any segment of the market ecosystem
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Business Model Options
Back
Trends, Opportunities & Unmet Needs
Analysis
Opportunity: Integrated Offerings
that provide installation, support
and services
Relevant Trends Unmet Needs
Increasing need for integrated solutions
Increasing adoption of monitoring
Increasing adoption of smart appliances
Increasing need for support services
Increasing use of broadband content delivery
Increasing need for user support
Increased consumption of broadband delivered content
Increasing need for operator service revenue
Service Interface that is intuitive, comprehensive and sticky
Key Drivers Summary
Cross Domain Competition Broadband
Consumer Needs
Content
Home Networking
Vendor Revenue
Source: Frost & Sullivan.
Consumer Confusion
Complexity
Price Lack of Integration
Market Fragmentation
Key Restraints Summary
Source: Frost & Sullivan.
Business Options
Drivers are defined by Consumer needs Restraints are defined by existing offering deficiencies
Vendors/operators must focus on integration, ease of use and
features to overcome market restraints Partnerships are indicated as a way to consolidate a critical mass of
capabilities
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Case Study: Verizon Whole Home Monitoring and Control
Verizon includes home content management, utility monitoring and management, communication service access, security management and home automation functions
It does not include home network installation or support, although
these can be obtained from recommended third parties
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Source: Verizon
Case Study: Comcast Xfinity Home
Xfinity services include home monitoring and security, consumer communication service access, utility management and content
Xfinity does not include home network installation, management or
monitoring
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Source: Comcast
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The Way Forward
Back
Way Forward
Network Operators must develop or partner to obtain: – Complete suite of communication services – Cutting edge service interfaces – Service installation, support and management – Home networking support
Home networking and automation providers must partner with
operators to offer comprehensive smart home service packages Content providers must partner with network operators and home
networking providers to offer a complete smart home package Telemetric services must be included in smart home offerings and
must be integrated into other existing communication services
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