I Feel Connected: Home Automation Today

By Chuck Ross | Mar 15, 2013




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Today’s home automation market isn’t so much evolving as it is mutating, like one of those time-lapse videos of microbes in a Michael Crichton science-fiction movie. Product technologies seem to be developing faster than corporate marketing plans, so it can seem manufacturers are inventing new devices well in advance of actual consumer demand. These new offerings feature a range of capabilities, but they are united in their drive to build new connections.

Connectivity now is being built into everything from water heaters to door locks, and business models are shifting almost overnight as companies seek new ways to turn these technology advances into revenue. In some cases, these product-makers are hoping to morph from manufacturers into service providers, while major telephone and cable providers are seeing an opportunity for new markets using the wires that already connect them to millions of customers. But consumers are still trying to figure out their own value propositions with gadgets that can still seem a bit ahead of their time.

Energy management not a driver

When companies first began exploring connected appliances four or five years ago, it was with dreams of the smart grid in mind. At that time, with energy costs rising, manufacturers saw an opportunity in enabling communications between their products and customers’ electric utilities to enable remote setbacks during peak electricity-demand periods. That market has yet to materialize. Newly abundant natural gas supplies are helping keep electricity costs low, and utilities have been slow to introduce the time-of-use energy rates that would make peak-response capability useful.

“You have to hit consumers in their pocket with energy costs before they stand up and take notice,” said Steve Koenig, director of industry analysis for the Consumer Electronics Association, the group behind the blockbuster annual Consumer Electronics Show. He said entertainment, not energy efficiency, is driving today’s home area networking (HAN) market. 

“At the forefront, it’s wireless audio—networked entertainment and the ability to push content around the home so you don’t have to have a full set-top box attached to every TV,” he said.

Beyond entertainment, Koenig also sees growing interest in lighting and security-system control—a market Verizon, Comcast and AT&T all are seeking to crack. However, he said, such whole-home solutions aren’t nearly as popular as one-off products that just happen to strike the fancy of specific consumer groups.

“What we find is that consumers like the ability to choose,” he said, noting a bias against bundled approaches. While some shoppers may want to build a connected system over time, Koenig said other consumers are interested in connected, intelligent systems such as the NEST thermostat, but they don’t want a security system.

Home-improvement retailer Lowe’s seems to have recognized this market for individual choice with its new Iris line of devices. Covering a range of smart home-management products, from thermostats to electrical outlets, these offerings are manufactured by GE, Schlage and other familiar names. But they incorporate electronics that enable them to communicate with the Iris-branded hub that plugs into a homeowner’s Wi-Fi router.

Iris kits are available, bringing together a suite of devices—motion sensors, door and window sensors and a keypad for the “Safe and Secure” kit, for example—but customers also can purchase individual add-on devices. Most important, homeowners can manage basic on/off functions of these devices remotely, using free smartphone apps. For $9.99 per month, they can set schedules and activity modes for groups of devices, so lighting and heating both turn on when a door is unlocked.

Contractor opportunities

If you have already started dipping your toes into home automation networks, you may be able to see the value of a single point of control, such as the Iris hub, for a range of electronically networked devices. Most individual devices communicate using proprietary protocols and need their own point of entry into a home’s wireless network. Each of these “gateways” requires its own connection to a homeowner’s router, which generally only has four available ports. Finding a way to organize and store an expanding collection of routers and their related wiring can prove a challenge.

“You exceed four devices and you’re going to have to be a networking guy,” said Tom Kerber, research director for home controls and energy with Parks Associates, a Dallas-based technology research and consulting firm. 

While he sees this as a short-term problem—gateways and routers are both evolving quickly—the issue points out the opportunities available for savvy electrical contractors. While devices may be marketed directly to consumers through DIY outlets, such as Lowe’s, having a professional handle the installation could make for a much happier customer.

“That installation experience is potentially much more satisfactory than doing it yourself,” Kerber said. 

Among consumers his firm has surveyed regarding product satisfaction, the biggest driver is the installation experience, and the companies recognize this.

CEA’s Koenig noted that partnering with a national provider could be an option for electrical contractors. Phone companies, for example, are recognizing that their own staff may not be the best resource for installation services.

“While Verizon offers these services, they don’t provide the installation,” he said. “What they do, instead, is connect you with a vetted professional.”

Even Lowe’s hopes contractors will become a force in the market. Though its Iris-branded products may be sold as DIY devices, Koster said some customers still will seek guidance for system setup and installation.

“We believe there are great opportunities for professional assistance,” Koster said. “We have items, such as thermostats, that customers may be intimidated by, once they actually take off the old thermostat and see seven different colored wires staring back at them. Professional help and guidance can go a long way to helping consumers get comfortable with a system such as Iris.”

Smart and getting smarter

Experts at the front line of home connectivity see the many varied devices doing a better job of controlling themselves in the future, with much less need for our smartphone intervention. Sensors will become increasingly prevalent components in residential appliances, and devices may begin to be paired with outside data sources.

“You could get a notice that there’s a storm coming and your garage door is open,” Kerber said, citing one potential scenario. 

Or a washing machine sensor could send your phone a text that it has begun flooding; you then could shut the machine down.

Others see increased “predictivity” in connected devices. Today, the Nest thermostat offers a real-world example of what such a capability means. Programmable thermostats aren’t new, and they have become popular in many utility efficiency-­incentive plans. The problem is that many users set them once and then forget to readjust them as their schedules change. The Nest actually programs itself, using activity sensors to learn when you are at home and how long it takes for your home to get to a desired temperature. As your schedule changes, the thermostat adjusts on its own.

The combination of sensors and predictivity also could become important in the market of products geared to help older adults stay in their homes longer. GE and Intel recently teamed up in a new joint venture, Care Innovations, to develop such devices. The companies’ QuietCare system, for example, uses networked motion sensors to unobtrusively monitor a senior’s activity throughout a residence. While the system currently is being marketed to senior living facilities, a residential version could just as easily report similar data to a distant child or other remote caregiver.

“A lot of consumers expect their insurance company will pay for that,” Kerber said, noting a hurdle such products could currently face among individual homeowners. But, he added, the increasing numbers of aging boomers who prefer to live out their golden years in their own home may see such an investment as worthwhile. “From a demographic perspective, they’re going to make this a growth market to support the aging-in-place population.”

About The Author

ROSS has covered building and energy technologies and electric-utility business issues for more than 25 years. Contact him at [email protected].


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