IoT in the Home: Market Players

Home Automation IoT Home automation is an active market with many players approaching it from different angles:

Technology giants: Apple (HomeKit, iOS), Google (Nest, Android), Samsung and Microsoft (Xbox, Windows) best exemplify this segment. These companies leverage the operating system of mobile devices, their incumbency in the Internet platform business, and the Cloud infrastructure to expand into the connected home market. New players are also entering this space with significant foreseen growth include Alibaba, Amazon and Xiaomi.

Industrial conglomerates: GE, Honeywell, Phillips, Schneider, and others, manufacture a wide range of appliances and home devices. Their centers on ensuring interoperability with home automation hub vendors as they seek to make their solutions as widely available to the market as possible. Some of these companies have decided to enter into the home hub market (e.g. GE, Honeywell) but others have kept out (e.g. Phillips).

 Consumer electronics: Sony, Panasonic, LG and Samsung have incorporated connectivity into their products.  The TV is often used as a control hub. This strategy works when devices are from a single vendor as interoperability between different vendors is challenging.

Product specialists: This segment includes manufacturers of different home products such as locks, alarms, sensors, garage door controllers, and other products. August, Big Ass Fans, Kidde, Rachio, Schlage, Skybell, Yale are examples of this segment. Product specialists focus on incorporating wireless connectivity into their products and integrating with a multiple home gateway vendors.

Service providers: This segment includes connectivity service providers (mobile and fixed access service providers) as well as monitoring specialists like ADT and Vivint who offers their own home automation systems. Connectivity service providers developed home automation products in partnerships with product specialists. The business model is based on recurring fees, for example, AT&T Digital Home allows monitoring of security and energy starting at $5/month. The trend if for service providers to become a one-stop-shop for home automation devices, gateways and Cloud service as exemplified by KT, NTT DoCoMo and PCCW.

Startups & peripheral vendors: This segment comprises home automation solution vendors who have sprung up especially within the last 3 years.  This group focuses on developing a home hub and a few complementary devices most sought out by customers. They leverage partnerships with product specialists to provide a broader range of connected devices. Interoperability is critical to this approach. Startups typically seek to support many technologies in their home hubs to broaden their appeal.

Retailers: Examples of this segment include Lowe’s Iris system to control security cameras, light switches, locks and other devices; and office superstore Staples offers a similar system called Connect. These vendors have to compete with the well-known technology brands and their long-term presence in the market will be tested.

Semiconductor vendors: ARM, Intel, Qualcomm and others are active participants in the home automation ecosystem which is a vehicle to drive semiconductor sales. Qualcomm is leading activities at the AllSeen Alliance for interoperability of devices. These companies can make investments into product companies as exemplified by Intel’s acquisition of wearable health-tracking device company Basis Science for $100 million in March 2014.

Many types of players constituting the home automation ecosystem leads to a complex channel to reach the end user. System integrators, device manufacturers, connectivity or Internet service providers, home automation system vendors, can reach the end user through a number of channels such as retail, direct, or through a partnership with another member of the ecosystem.

Home automation market value chain.

Home automation market value chain.

* This is the second part of a multipart article. This is a link for the full article.



About Frank Rayal
Technology strategy, markets and M&As

Comments are closed.

%d bloggers like this: