Open standards and clear consumer branding will be the cure for CES home automation confusion

18 January 2015 by Steve Blum
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The new good housekeeping seal of approval.

There were plenty of home automation hubs at CES, as it turns out. The first home automation products out of the gate, at the pre-show press events, were primarily one-off gizmo-and-app combos, but the usual suspects eventually showed up.

Lowe’s Iris system was prominent in a demo smart home built on the show floor. Nexia had a presence too. Both have a similar business model: sell a hub and support it through a cloud server for $10 per month. Nexia’s rep wouldn’t say how many subscribers it has, but she did say it has 300,000 active devices on its network. Lowe’s rep wouldn’t give any details about number of users, but did say that their average subscriber has 8 connected devices. Put those numbers together, and you get a subscriber range somewhere in the mid-5 figure range for a typical fee-based platform. Not an exact estimate, to be sure, but that’s probably the ball park.

Other hub-centric systems – free and otherwise – were there as well: ADT, Opcom, Insteon, Vera, Wink and the list goes on. Every home automation business model was well represented. The supply side of the product category has exploded, even though the demand side lags far behind.

A mainstream breakout – low 7-figures at the very least – won’t come until there’s a sufficient degree of interoperability. If not a single standard then it’ll require identifiable families of products at the least.

“As the homes get more connected, we’ll see the homes get standardised”, said Ulf Ewaldsson, Chief Technology Officer for Ericsson. Although, he said, that could mean more than one standard.

Coming out of the show, my sense is that vertically integrated systems that rely on proprietary technology won’t make it. Mainstream acceptance for the rest will start with standard-based technology – Z-wave, AllJoyn, and the list goes on. The real winners will emerge when the market begins to focus on a small number of brands.

One hint at the show: the most prevalent home-automation brand was Nest. The Google-owned thermostat company’s logo was prominent on one smart home product booth after another. Compatibility with Nest and, to a lesser extent, Apple’s HomeKit platform, was the method of choice for reassuring consumers that a company’s products are interoperable within a heterogenous system.