Where is the promised "Smart" home?
The sudden outbreak of COVID-19 took us all by surprise and forced many to stay home. A flurry of predictions followed. The general consensus among industry seers was that, as people spend more time with household electrical appliances, smart home applications would enter a new phase of explosive growth.
According to the research report published by Strategy Analytics, the global smart home market will increase from US$103 billion in 2019 to US$157 billion in 2023 with a compound annual growth rate (CAGR) of approximately 11%. In truth, this rate of growth is not remarkable.
These trends are consistent with general consumer sentiments. Most people have not added any smart home hardware other than smart speakers in the past few years. Although many new air-conditioning units and washing machines can be connected to the Internet, our old appliances are still working and we’re in no hurry to replace them. There is still a long way to go before we attain the home automation we dreamed of, and were promised.
The less patient among us may well ask – where is the promised smart home and why is it taking so long for our homes to become smarter? Let's analyze the situation.
The previous surge in smart home development can be traced back to approximately 2014 when the rise of IoT led to a rush of smart hardware applications and led people to assume that the long-awaited "home automation" was finally here. However, after the surge receded and a new cycle of trial-and-error began, the smart home industry settled for focusing home automation on "star products" that had the potential to become market phenomena.
In the process of developing and promoting star products over the past few years, some great results have been achieved. Among them is the rapid rise of smart speakers, which inspired brand-new human-machine dialog models and became a new gateway for online traffic. Their potential to become a control center for homes is both exciting and promising. The smart speaker market has maintained a steady growth rate and new "selling points", based on repeated algorithm computing, have been invented. Smart speakers with screens have increased in popularity since the second half of the previous year.
In fact, that smart speaker with a screen standing on top of the table is beginning to resemble a standing tablet computer or a small smart TV. Although this new product has positioned itself as a traffic gateway for users' entertainment requirements and has attracted many fans, it has deviated somewhat from the principles of true "home automation". In addition, the immense popularity of the smart speakers was, to a large extent, dependent on subsidies provided by the big players. Therefore, it is debatable whether or not this product really is the "tipping point" for the smart home market.
When will that single breakthrough product, the one that will break down all existing barriers in the smart home market, reach the market? Only time will tell. Developers now have access to a wide range of available technologies. However, they need continuous combinations, repeated algorithm computing, and repeated test on "lab rat" users before the ultimate "device to rule them all" can be developed.
The logic behind starting with one product is essentially a case of the proverbial "crossing the river by feeling the stones". The natural divide between a single star product and true home automation can only be crossed by integrating smart home products into one system.
Previous deployments and implementations of smart automation relied mainly on the "pre-market" enabled by real estate developers and interior designers. They are also the financiers for many smart home companies. However, for most end-users, the smart home applications they see in show homes are just that – for show. End-users have scant confidence in their user-friendliness, and struggle to see how smart home technology can be seamlessly integrated into their lives. Furthermore, the financiers are mostly unprepared or unwilling to manage the smart home systems once they have been installed. This makes it difficult to form a comprehensive and sustainable closed ecosystem for the smart home.
If only someone inside the industry would replace the early financiers who continue to promote home automation but are unwilling to continue the product journey with their customers. Internet companies and tech companies are no doubt the likeliest to fill the gap in the market. Case in point – we have seen many new products in the past few years such as Xiaomi's "1+4+X" strategy, Huawei's "1+8+N" all-scenario smart home service strategy, Haier's "5+7+N" smart home solution, and the AI smart communities proposed by Midea and Alibaba Cloud.
As companies push their latest technologies, they keep a close watch on Apple. After all, so many gadgets have taken off at Apple in the past ten or so years. Although Apple's market position appears to have weakened in the past few years, its influence should not be underestimated. Apple's plans for the smart home sector will no doubt attract close scrutiny.
The 2020 Apple Worldwide Developers Conference (WWDC) revealed that Apple has continued to increase investments in its smart home strategies. The iOS 14, due to be launched in fall this year, will provide more support to the HomeKit platform and offer a more integrated and secure smart home experience. From smart lighting, smart locks and air conditioning systems to secure camera lenses and smart speakers, Apple has never taken its eye off the immense potential of the smart home market.
That said, based on the data currently published by Apple, its progress in developing the smart home looks modest. Perhaps it has not yet identified the "pain point" in the market on which to focus its efforts. However, with the relentless research and development and fierce competition between Apple and other heavyweight tech companies, we should remain confident about the future of the smart home. Realistically, only the heavyweights can be expected to achieve system integration and provide feasible home automation for ordinary people.
I once heard a story about the roadshow of a smart home startup. When analyzing the factors that contribute to future market growth, they identified male users born after 1985 who grew up in the connected era of the Internet as the main target consumer group and a fundamental factor for explosive growth in the smart home market.
However, this may not play out in the real world. These people may be passionate about high-tech products but they also happen to be the pickiest group of people. If the product fails to offer a good experience or is defective, they would be the first to reject it.
Smart home products are essentially consumer products. True success can only be achieved when a company successfully attracts the greater majority of people who know little about technology and motivate them to buy. All View Cloud recently conducted an analysis of Tmall Genie and its partner ecosystem and discovered that consumers who had bought three or more smart home products consisted mainly of young mothers born after 1985. This key finding will no doubt influence the design of the functions, human-machine interface, and logic of future smart home products.
Many current smart home products use the IFTTT (If This Then That) setting and control methods (e.g., use previous settings to automatically switch on the hallway light when the user comes home, and switching on the air-conditioning based on the user's preferences). However, the system configuration process would still be too complicated for most users. Most people do not want control over the devices. On the contrary, they want something foolproof that they can use immediately without having to spend time learning it.
We now rely on the knowledge and ingenuity of the developers to attain this goal. We may also have to wait for the growth of another facilitator— artificial intelligence (AI). Smart home equipment can only truly identify people's moods, be ‘thoughtful’, observe the user's requirements from their subtle actions, and implement precision feedback through the use of machine learning and other AI technologies, along with the analysis of data on user behavior.
This is the only way for smart home to reach a mass market, become a seamless part of our lives, and effortlessly add value to our existences.
Three stages have been identified in the development of smart home technology:
- Distributed intelligence based on individual products
- Home automation with technology integration
- Data-driven service intelligence
These three important milestones must be reached in the development of smart home automation. Only then can our homes be truly smart. Meanwhile, we must work hard and be patient.