Deutsche Telekom: The future of the smart home is here, almost (Reader Forum)
The smart home space has been a busy one over the last few years. If anything, the pace of innovation is accelerating. Research consultancy Market Insights predicts the market’s total value will reach $55 billion by 2022, from $38 billion in 2017. But the road will not be smooth, with competition and consolidation ahead.
Nevertheless, certain technological developments, most notably the rise of artificial intelligence (AI), support these heady predictions from analysts. The availability of AI-power digital assistants, invariably incorporating natural language processing and voice control, has seen further growth in the market. Gartner predicts 25 per cent of households will use A assistants as the primary interface for connected home services by next year.
The real power of AI-powered digital assistants is that the voice is a constant feature in the home. In places like hotels and offices, the value of voice as a control mechanism is significant. Voice allows users to bypass the underlying technology and get straight to their request. This is driving serious investment among technology vendors to get the integration right.
There are endless examples of this kind of integration, as seen in the gadgetry on display at IFA 2018 in Berlin last month, in everything from television sets to fridges. One manufacturer has produced an AI-enabled, voice-controlled speaker system that responds to the word ’emergency’ by prompting confirmation, and dialling up nominated family, friends or carers. Recipients can establish a two-way voice link via the speaker.
Another emerging theme in the smart home market is energy management. Energy consumption is a political and social issue, at last. Smart metering remains central to the European regulatory environment. Smart heating technologies have seen plenty of exposure. But monitoring of water abd electricity usage is also high on the agenda.
At IFA 2018, mainstream manufacturers were showing white goods like ovens and washing machines, mostly ‘dumb’ devices until now, with features for managing energy usage in granular detail, whether exploiting cheaper off-peak rates or new economy settings.
These products highlight the need for new service models and business models, to support such smart goods. The utility market is actively driving service bundle packages by bringing together connected home products with new green energy tariffs.
Loyalty-based models have also seen significant uptake, where consumers are provided with the latest connected home thermostats, reducing customer in the process. In other cases, insurance companies have found considerable success partnering with the makers of smart home security products to extend their reach and user base.
According to Juniper Research, around 65 million new home insurance policies will leverage smart home technologies in 2018 alone. In short, the expansion of business models is indeed taking place as predicted, and in many exciting new ways.
The future of the smart home looks vibrant, although challenges remain, most notably with data – not only around its security, but also its capture and relevance. The intrinsic value of consumer data may be well established, but the new world of interlinked and networked devices offers new and exciting opportunities to grow new services.
Insurance companies could offer consumers lower premiums and direct support from expert contractors when a leak is detected by smart home sensors, for example, while smart thermostats linked to weather stations and in-house sensors can not only cut bills, but also provide key usage and price data when searching for new deals.
Although value is already being gained from contextual device data, it will be increasingly vital to aggregate data to create new insights, enhance the user experience and improve the inevitable bugbears such as churn rates.
However, the ability to safely analyse and handle this new data will deliver unprecedented benefits. As with much of this sector, the best players will rise to the top. The best is yet to come, but it is approaching fast.