Smart Home Weekly: Amazon Echo, iDevices $10M HomeKit Bet, Nest Goes Utility, Target Smart Home

Welcome to this week's smart home weekly for the week ending/beginning November 9, 2014.

The last week had a few big surprises, including what may be Amazon's big smart home play in the form of a speaker (yes, a speaker) and a $10 million HomeKit bet by iDevices.

But a few housekeeping bullets before we get started:

  • Make sure to catch the archive of our last webinar on building IoT and smart home products
  • Sign up for our 2015 Smart Home outlook webinar on Dec 4th
  • In order to write this newsletter (and do the Smart Home Show podcast weekly roundup), I keep track of smart home stories during the week on Linkedin in the Smart Home group and over on Flipboard where I curate the Smart Home Magazine. I welcome to subscribe/join either (or both!) if you want to see the stories I'll be analyzing in advance.
  • I'll let folks know who won the August smart lock on Friday of this week. To enter, just review the Smart Home Show in iTunes or Stitcher and send screen shot)
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On to the week's news...

Amazon Surprises Everyone With Echo

I think the most amazing thing about Amazon's Echo - a new Wi-Fi/Bluetooth enabled network speaker with built in Siri-like voice command and listening functionality - was how pretty much no one saw it coming. That's astounding when you think about it, pulling off a nearly universal surprise in today's rumor-driven tech media. Kudos to Amazon for that.

But what is the bigger meaning of Echo? As I wrote over at Forbes, I think the device could be Amazon's big smart home play:

"Seeing Amazon’s new device I’d say forget the Fire TV: the Echo looks to be Amazon’s bigger connected home bet.

One of the key reasons I believe this is the heavy emphasis on voice command interface. As I’ve written before, voice interfaces are fast becoming a key next-generation consumer technology interface; by creating a speaker with voice recognition tied to a cloud-based instruction and behavior learning engine, Amazon now has the ability to not only take direct commands for access to Amazon and other services, but it also has all the necessary inputs to tap into anticipatory computing algorithms that will preemptively anticipate your need for in-home actions and external services.

But its more than just voice. Given that the device has both Wi-Fi and Bluetooth, this makes the device a logical control point and command interface to a growing number of smart devices. Whether its a Bluetooth or Wi-Fi doorlock, smart lighting or security, one could imagine Amazon integration with devices as well as smart home services, and doing so with voice command."

I also write about the likelihood of commerce integration, something we all know is coming. It's interesting this aspect of the Echo has probably been the most controversial (a form of preemptive criticism since Amazon hasn't really talked about this yet), with many suggesting the Echo is simply a trojan horse for Amazon to sell more stuff.

I imagine it is. Much like Google is likely going to use our Nest data in its business, I suspect Amazon has bigger plans with Echo. But if both companies have ulterior motives, why do folks take Google so seriously while tend to be so quick to dismiss Amazon? In part because Amazon has been so blatantly obvious with their intentions in the past. The company just about came out and admitted the Fire Phone was more about shopping than talking or texting, after all, and so seeing a speaker with Siri like functionality you can hardly blame anyone. 

The Takeaway

The bigger picture here is if the device delivers on what it promises, it could be Amazon's smart home interface. And with Bluetooth and Wi-Fi on board, there's no reason the device couldn't ultimately be a command interface for other devices.  

iDevices $10 Million HomeKit Bet 

This news was also surprising, but in retrospect iDevices had been dropping hints something big was afoot.

Here's what they announced: iDevices said they've invested close to $10 million in developing both its own new product centered around HomeKit - something CEO Chris Allen told me is not going to be a kitchen-centric device such as one of the connected thermometers it sells - as well as opening up the platform its developed for HomeKit to other companies who want to build their own HomeKit-centric smart home product.

The company had lots more which it hinted at, including an array of partners it is working with that it will unveil at CES 2015. All of this work and the direction may be surprising if you simply thought iDevices made thermometers, but in reality the company has always had a professional and design services orientation and has been helping other companies get their products for some time because as Allen told me, they feel you have to ship your own product to really get this market and so that's what they do.

The Takeaway

While I'm intrigued to find out more about the company's own product (which Allen also tells me won't be a smart home hub, as they "don't believe in hubs"), I think the bigger story here is iDevices creating an enabling platform for other companies who want to make smart home products. Thinking about it this weekend, I realized that they are doing what Electric Imp is doing, only with a HomeKit spin: providing modules, a cloud backend, tools for developing smart home devices, an app and more.

Basically iDevices is looking to be the Electric Imp for HomeKit.

Nest Is Now Free (In Ireland At Least)

Looks like Nest is making a significant new expansion into the utility market, announcing a new deal with Electric Ireland in which new customers of the utility will get a free Nest thermostat in exchange for a two year service agreement.

While many in the tech press marveled at the innovation of Nest's new sales tactic (because this is Nest! after all), this type of deal is basically one of the oldest hardware sales tactics in the book: a hardware subsidy sale through a service provider. Basically its mobile phone service agreement 101, and while it may not be a new idea, it's still a smart move by Nest to get start to expand its channels into the utility market. I expect that given the choice of a Nest thermostat or a regular old thermostat, many would choose to go Nest despite a commitment of two years.

The Takeaway

Most Nest thermostats today are sold through retail, but now Nest is going after the incumbents like Honeywell that sell through utility channels. Honeywell has already been offering a more modern alternative in the Lyric, but I expect that they and others who sell through the utility channel are going to start feeling even more pressure from Nest.

Target Trialing Smart Home in 500 Stores

A week ago I wrote about Walmart's push into smart home, and this past week we got news that Target is now expanding into the connected home, rolling out trials in 500 stores this fall.

Just as with Walmart, Target expands the addressable market for this space, exposing more middle to higher income consumers, as well as younger consumers, to the idea of smart home.

If I were to guess Target's approach, I think the initial focus will likely be on popular point products (think Dropcam, Philips Hue, Nest, August), and we'll see a strategy which gets more cohesive over time with possible emphasis one or two key "ecosystems" (HomeKit, Google and maybe WeMo?).  

Unlike Best Buy, Target (and Walmart) likely wouldn't offer a bunch of competing platforms or be a smart home hub clearing house. They'll try to keep it simple.  Would they go so far as betting on a particular platform or even go Target-branded (think a Target version of Iris or Staples Connect)? I doubt it. It hasn't been their modus operandi in the past, so I don't see it happening in the future.

The Takeaway

Target is an important retailer and it hits exactly the market you want to right now to grow the overall market penetration for smart home. It's worth keeping an eye on to see if they get the mix right and how products move in their test markets.

Quick Takes

Creston Founder Dies

Sad news last week with the passing of George Feldstein. In Creston he created one of the giants in home automation. Julie Jacobson has a nice remembrance over at CE Pro

Allseen Expands

The Allseen Alliance expanded by adding new members, adding INSTEON and Netgear among others. In a related note, the former Chairman of the Allseen Alliance while with Qualcomm, Liat Ben-Zur, has left that role and taken a new role at Philips as Senior VP and Technology Leader to help drive, according to her Linkedin, "digital innovation via connected propositions and experiences."

Another Smart Security Device Launches on Indiegogo

Six months ago I wrote quite a bit about the opportunity to expand the total market in security by creating lower-cost home awareness solutions. It seems like I was on to something as there has been a surge in activity in the space as new folks are creating campaigns on both Kickstarter and Indiegogo. The latest is Cocoon, which uses an ability to detect "infrasonic" sound. The usual caveats, however, around the device and company as its still very pre-revenue.

That's it for this week. Remember to subscribe to this weekly update in newsletter form and check out the audio versions over at the Smart Home Show. 


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