Emerging from the hype cycle into the clearer waters of innovation and growth, Thomas Rockman, VP of Connected House, Deutsche Telekom delves into the future of the smart home industry.
Progressing through the initial teething stages, it is certainly an exciting time in the smart home industry. There are significant advances occurring across the board, from community-based improvements, technological change and consumer education. In short, when analysts predict that the market could grow from $46.97 billion in 2015 to $121.73 billion by 2022, at a CAGR of 14.07% between 2016 and 2022, that now seems conservative.
By tapping into the emerging business models, it is now easier than ever for companies in all sectors to achieve success with their smart home propositions. In fact, the keys to the smart home kingdom are very simple – collaboration, striking the right partnerships, promoting open standards and seeking innovation to deliver a clear customer benefit that resonates, are the main elements. Most users begin their smart home journey with a single use case that, once satisfied, grows laterally as they upgrade to further services, devices and discover new use cases – it is essential that the first experiences are exceptional!
Smart security, energy and comfort
New business models are cropping up across Europe, and the most successful of all deliver compelling smart home propositions. One example among many is Slovak Telekom, the largest telco in Slovakia. More recently, it rolled out a consumer offering with an initial focus on protection and monitoring, energy conservation and home automation.
It combines the open standards-based Deutsche Telekom QIVICON platform, the QIVICON Home Base, the white label app and compatible devices from various manufacturers – a flexible package that emphasises that one size very rarely fits all. Deutsche Telekom’s smart home portfolio offers more than 200 compatible devices from leading brands and covers a wide range of uses including security, energy and comfort, which enables partners to easily create and integrate a compelling consumer smart home proposition.
AI revolution in the smart home
The pace of technological innovation is incredibly rapid – what was perceived as science fiction a few years ago is now commonplace in today’s connected home market. For example, a Gartner report predicts that 25% of households will use digital assistants as the primary interface to connected home services by 2019, and this is certain to be just the beginning.
By blending together devices and services from multiple sources, accessed via the AI overlay, consumers are again divorced from the intricacies of technology, and freed up to live their lives. For example, a simple Alexa Skill means that Magenta SmartHome customers in Germany can use voice control service in their homes to activate pre-programmed situations or switch over to the status ‘Absent’.
The very near future will bring a host of more sophisticated benefits to end-users, as well as allow new business models to blossom. Individual industries will be able to integrate or create application programming interfaces (APIs) and thus enter the smart home market with their services via this new channel. Take insurance companies as an example, they may provide guidance based on weather or thermostat data, while banks could use voice interfaces to help customers manage their finances and pay their bills quickly and easily.
The connected car comes of age
Meanwhile, transport networks are ringing in the changes too, as similar driving forces transform consumer expectations and begin to shape the towns and cities we live in. Connected cars may not be a new concept, but the number of them on our roads in Europe are fast rising, presenting no signs of stopping.
This new platform represents one of the greatest untapped potential opportunities to deliver new services direct to the consumer – almost unparalleled in modern society. From the burgeoning range of consumer digital services, including entertainment, digital payments, mapping and navigation, communications, productivity applications across verticals from health to finance, and a significant wave of mobility services, connected vehicles are one of the newest and most numerous software platforms around.
One example is Deutsche Telekom’s partnership with Volkswagen, which centres around Volkswagen’s Car-Net App Connect, recently showcased at the IFA technology show in Berlin (September 1-6). The integration means that car owners can seamlessly control their Magenta SmartHome, which is based on Deutsche Telekom’s open, white label smart home platform, while away from home.
Volkswagen drivers will be able to control their Magenta SmartHome directly via their vehicle’s infotainment system. Using the control panel, the driver can activate or turn off pre-set scenarios while driving. For instance, in the scenario of ‘coming home’: the lights in the driveway and house entrance turn on automatically when the vehicle approaches, as the Magenta SmartHome app connects to the vehicle. All they need is an Android smartphone with MirrorLink technology and the Volkswagen Car-Net App-Connect.
Meanwhile, the rise of the sharing economy brings obvious in-car monetisation possibilities – why pay for parking when a nearby family needs to rent a car for an hour? Extending current ride-share and short-term car rental offerings into real-time is already underway and will reach a consumer level in the immediate future.
Into the near future?
One thing is absolutely certain, that connectivity levels will continue to rise, and the inspirational lead of smart home enterprise will continue to spur parallel industries to compete. There are many more potential business models making their debut as we speak today, but the near future will certainly see models including facets of gamification, micro-transactions, affiliate programmes and data aggregation begin to enter the market. These dynamic riffs on existing themes will have considerable impact on a wide range of consumer markets, but it is also fair to strike a note of caution – challenges certainly remain in this space as well as opportunities.
Interoperability and standardisation remains a live issue, while regulatory pressures and content licensing, personal data security and national cybersecurity all require careful negotiation from manufacturers, installers and consumers alike. However, the opportunities far outweigh the challenges – it’s set to be an exciting couple of years.