The latest Connected Home Service customer survey investigated understanding, appeal and willingness to pay for connected heating controls and services.  Our sample consisted of 800 homeowners in the UK, the Netherlands, France, Germany and Italy.

Awareness and price sensitivity for smart thermostats are low

You might have heard the news of Amazon’s free ‘smart home consultation service’ that was recently launched in the US. Simply put, Amazon is offering a free in-home consultation from a trained expert to assist potential customers with choosing the right connected home products for their needs. Because of Amazon’s unique position in the market, I believe this could seriously drive the connected home market and give Amazon a leading position.

So why am I so impressed by what Amazon is doing? What allows them to offer free in-home consultations? And why are they so well placed to both drive and gain a large part of the connected home market? Here are five reasons behind my thinking:

More than just a big futuristic tech show, the CES is a perfect occasion to review where the connected home industry is at and what the market might look like in the next year or two. However, if you follow the connected home market like us, there was no major surprise in Vegas this year. The main takeaways from the event were the growth of the leading US service providers and the development of the retail market via cameras, thermostats, voice control and home automation. There are also some interesting trends in the market with additional user interfaces, the hype around connected door locks and the much cheaper products coming from China. Finally, we saw a few start-ups which developed solutions particularly interesting for the energy markets.

The leading US service providers are growing their customer base and adding more use cases to their portfolio

Sunny days have come to Europe in the first weeks of spring, meaning sales of connected heating controls will start to slow down, as customers start to turn off their heating for the summer. This is a perfect time for industry stakeholders to take a step back, and consider the learnings they gathered over the winter… before the next one comes!

This next winter season might actually be the last chance for the European energy industry to establish itself in the connected home space, and to own part of the customer relationship. It is extremely likely that this market will soon be attacked by giant companies such as Amazon and Apple, and by large telcos and retailers entering similarly to how O2 and Dixons Carphone have started doing to do in the UK. These companies will most likely own the customer relationship if they succeed, and the energy players will have reduced market power if they try and work with these companies to play in the market.

Sue Furnell and I went to the CES in sunny Las Vegas, to explore the latest innovations of the global connected home market. Since there are dozens of good reviews about the event online (example links below this blog) we thought there was no reason to re-invent the wheel. Instead, we  have endeavoured to make our review as relevant as possible for your businesses. Here are our takeaways:

1. There is a large number of ecosystems connecting different devices together. Here are a few names I collected while walking around but there were many more: Orvibo, Securifi, Insteon, Green Peak, Smartlife IoT, Savant, Gooee, Côr, Wisilica, Zipato, Ubiant, Myxity, Evey, Muzzley… and this was on top of the use cases developed by the alliances like Zigbee, Allseen, Thread, Homekit or Z-Wave. Some of these are providing hubs centralising the connectivity between devices, some provide white label platforms, and some simply provide a physical remote control. Most of these will fail to secure scale as the market develops and there will only be a small number of winners.
   
   
2. As we explained in our latest Connected Home Service report (the state of the connected home market beyond energy), wearables for health and fitness are becoming huge. The key companies like Fitbit and Withings had the biggest booths of the West Tech area and put on shows to attract the public. This is where the volumes are today globally in the connected device arena.
   
   
3. The peace of mind vertical has never been so crowded, with dozens of security cameras being showcased.
   1. Netatmo announced its well-designed outdoor camera (called Presence) which adds to the indoor one (Welcome).
   2. The French company, Myfox, also presented a discrete camera they recently launched. The company is now working with the insurance expert AXA in France, who wants to use connected security products to add to its service portfolio.
   3. Other brands exhibiting cameras included: Homeguard, Piper, Canary, Côr, Smanos, Blink, First Alert, Hubble, Elarm, iControl, Amcrest… Once again, we doubt all these brands will survive the connected home market expansion.
      
      
4. The large and global platforms like Allseen and Homekit start to create some momentum
   1. A few companies such as Honeywell were showing their products with the newly Homekit compatibility. Building the products on the standard required a lot of effort and needed around 18 months of development (since Homekit was announced) to achieve the seamless user experience Apple required.
   2. The number of Allseen Alliance (which runs on the AllJoyn protocol) members hasn’t stopped growing in the last few months but so far the penetration of AllJoyn ready devices remained low. This now starts to evolve in the right direction as TV companies like LG announced several hundreds of thousands of AllJoyn-ready smart TVs sold in the world.
      
      
5. As for the energy part of connected home:
   1. The Nest and Lyrics (Honeywell) thermostats were present on a lot of booths. It seems those two will be the dominant products in the US smart thermostat market.
   2. New ‘European’ smart thermostats have been announced and received awards from the CES: Engie with its budget thermostat called Homni, where the end-user can set a budget for the month for heating instead of setting up the temperature. Ween – an automated smart thermostat based on presence sensor and geo-localisation – has also been shown to the public.
   3. Eliq, a Swedish connected home start-up, exposed its energy monitoring device which reads the smart meter data. What’s really interesting is that it is now sold by Ikea in Sweden (for ~€59) who could be one of the disruptive retailers for connected home products. There hasn’t been much push from IKEA yet though, but we expect this might change soon as the company is on a learning curve with this market.
   4. Bosch exposed similar use cases for their boiler at the CES as in last year’s event ISH in Frankfurt. The remote diagnostic software was demonstrated on both the installer and the user side. However the development remains in trials and hasn’t been launched commercially yet.

The event itself is without a doubt the best event of the year to find out the latest connected home trends and innovations. I would recommend it to anyone looking at this space from any angle. We would be delighted to discuss this more in depth with you individually or to exchange views if you were there as well, so please feel free to get in touch, my email is arthur.jouannic@delta-ee.com.