With 2015 breathing its final breath, I thought I'd take a look back at the defining stories and trends for this past year in smart home with a few hints of what this portends for the coming year.
A Shakeout For DIY "Platforms"
With consumers still not entirely convinced they want to buy a DIY smart home kit and install it, DIY smart home platforms struggled to get beyond the early adopter crowd. The end result were some high profile struggles for companies such as Wink. While some researchers painted with too broad a brush and said this lack of interest in generalized smart home meant all products were struggling, our research showed point products like locks, thermostats and smart security devices did just fine, while those products positioned essentially as a "smart home kit" in a box had a harder time finding traction.
Smart Locks Had a Good Year, But Got Bluer And More Touchy
I've long said smart locks are one of the most promising categories for smart home, in part because the value delivered is so obvious and the concept is so simple. Consumers thought so too, and this resulted in lots of volume for connected lock makers and some startups like August to get bigger funding rounds. While 2014 saw mostly startups offering up Bluetooth connectivity for direct connect locks (with the exception of Kwikset, which offered the Unikey powered Kevo), both Yale and Schlage also debuted their Bluetooth locks in 2015. Lastly, we also saw connected lock companies realize that many people find it an extra step to have to get out their phones and unlock their door, so some, like August (and just this week Danalock) debuted add-on touchpads to match what was the best differentiating feature for the Z-Wave and Zigbee locks (touchpad access).
HomeKit: The Ultimate Soft Launch
On one hand, you could call 2015 a big disappointment for HomeKit. After all, last year at this time there were many companies big and small that were so excited about the catalyzing impact that Apple's smart home effort would have on the market. But as the year unfolded and Apple seemed to almost forget about their nascent smart home framework, disillusioned connected product makers grumbled about the impact the high requirements Apple put on their manufacturing and channel strategies and some began to invest development resources in alternative platforms.
Ultimately Apple's amazingly "soft launch" probably had to do with a few factors:
1) Apple overestimated its ability to wrangle the cats that make up the smart home world, a much more complicated market than apps or mobile peripherals that were fairly straightforward to coalesce around Apple iOS platforms.
2) The slowness of their rollout is also somewhat intentional, as HomeKit's security is the highest of all the frameworks and I am sure Apple wants to make sure if hackers are increasingly looking at the connected home for new targets, that HomeKit wouldn't be the weak link the chain.
3) Ultimately, the company had bigger fish to fry in 2015, with the launch of Apple Watch, bigger iPad, growing interest in products like cars and much more.
Google's Confusing Smart Home Story
While Google/Alphabet/Nest had a really big year for smart home, it became increasingly difficult for someone looking for a cohesive set of messaging and strategy to actually describe what exactly each company is doing in the market. Google finally launched a true platform play around smart home and IoT with Brillo/Weave, a two pronged (Brillo is an Android derivative tailored for IoT devices while Weave is a protocol framework that can work with a variety of OS's) approach to give hardware makers a framework to build around Google. It also launched a more product-centric, localized version of Weave with Nest Weave, for those looking to build products to interact specifically with Google/Alphabet hardware in the home. Lastly, it created OnHub, a new spin on home routers that I think holds some promise.
Amazon Creates A Smart Home Commerce Layer
Amazon had maybe the most interesting year for a company in the smart home, launching a huge array of initiatives including Dash Replenishment Service, Amazon Echo, Alexa (and Alexa Fund), Amazon Home Services, all the while increasing the number and scrope of devices offered through its home automation storefront. The biggest meta-story of all I would observe from Amazon is they don't necessarily care about just selling hardware platforms into the connected home, but instead want to seed the market with products that feed their core business, which is selling lots of stuff to people. In other words, they are creating a smart home "commerce layer" while most other companies are thinking about selling hardware.
Bluetooth Vs. Thread
Ok, first things first: some might say I'm ignoring Wi-Fi, Z-Wave and Zigbee. I'm not. They continued to exist and win sockets in the smart home space, and Wi-Fi in particular will continue to grow in importance as companies like Roost figure out how to make Wi-Fi power draw to shrink and work on battery power over longer periods of time, but I think the biggest battle for the smart home network tech of the future continues to be Bluetooth and Thread.
As I wrote last month, Bluetooth is essentially a highly pervasive, mature technology trying to modernize itself for the IoT era. Thread is more a clean sheet of paper, a promising technology built upon IEEE 802.15.4 and 6LoWPAN that has all the benefits of IP, mesh networking and low power as native characteristics built right into the platform. While Bluetooth saw more design wins in 2015 as hub and device makers added it to their Z-Wave and Zigbee hubs and new devices, others are looking at Thread and asking if they should either abandon or make a dual-protocol radio with Zigbee (they use the same underlying IEEE standard) as companies like Google/Nest push Thread as a core part of the platform.
Bluetooth has a big roadmap it need to deliver on in the coming year (mesh, higher speeds, longer range and fleshing out IP-Bluetooth in the market) and Thread needs to convince hardware makers it has enough critical mass for them to build it into their devices. Expect both to have a very big - and possibly decisive - 2016.
Smart Security Bringing Home Most of The Smart Home Money
When you look at the business of smart home, the vast majority of revenue is tied up in one particular use-case: home security. That's in large part because big service providers like ADT and Comcast now power smart home-centric security in homes that number in the millions, but also because some of the hottest DIY products also revolve around security models. Whether it's a connected doorbell like Skybell or DIY smart security cams like Canary or a smart lock, these products are really more about security than anything, and using technology to control and monitor home security is something consumers are willing to pay for.
AI and Machine Learning Enter The Smart Home
In 2015 AI (artificial intelligence) and machine learning both welcomed themselves into the smart home. While often used interchangeably, the terms each refer to specific technologies, but the important thing to remember is both saw increased adoption in 2015 when it comes to smart home.
AI, which is really an umbrella term for technologies such as anticipatory computing, natural language processing, virtual assistant technology and robotics, had its most visible wins with virtual assistant/voice recognition tech like Amazon Echo/Alexa and Apple TV. There were a number of startups making noise in this space as well, and I expect the growing use of robotics and other AI technologies in the smart home in 2016.
Machine learning, which is basically pattern detection and the resultant algorithms that dictate the behavior of machines, saw its biggest advancements in the 2015 in smart kitchen and video-powered access control. The smart kitchen space saw companies like June (smart home with internal cameras) and Innit (a platform company developing image recognition for a variety of smart kitchen appliances)
Smart Home Retail Begins To Transform Itself
One of the biggest smart home stories of 2015 was the continued transformation of retail to sell in the age of IoT. With traditional big box and warehouse store approaches feeling more and more antiquated by the day, some big retailers like Target and Sears started to experiment with new approaches.
However, perhaps the most interesting story came at the end of 2015 with the debut of b8ta, which not only differs from traditional retail with an IoT-only product set (including smart home, wearables, personal transportation, robotics and more), but with the way it handles inventory. The company offers what it calls "retail as a service", which means it charges a rental fee to show products to consumers. The company offers detailed analytics around in-store product interaction as well, making it maybe the perfect store for product makers to beta (or b8ta) test early product concepts. It also enables startups to get their foot in their retail door without a big purchase order from big retail.
Bottom line, I could on on for another thousand words, as there was lots that happened in smart home in 2015. I will do 2016 smart home "what to expect", but that might - just might - come after CES, which always gives me a good pulse on what the latest thinking and plans are for the coming year. To make sure you get that, subscribe to the newsletter if you already haven't.
Also, if you're going to CES and want to connect, I'll be doing a Smart Home Show live in the Sands on Thursday from 1-2 and we can chat afterwards. I'll be here if you want to drop by. I'll also be doing a CES Preview at the Aria on Wednesday at 9 AM (RSVP here). Lastly, we are doing a SXSW Rocks the Smart Home for the second year on the last day of Interactive on March 15th in Austin, so if you'd like to come come to that event, you can RSVP now.