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IoT Fueling the Smart Home Race


The "smart home" market is quickly picking up pace as this year we have seen a handful of important acquisitions by leading OEMs signaling their strategic goals in this still emerging market place, and more recent activity is signaling continued momentum.

Time to acquire capabilities

Looking back over this year, there have been some noteworthy shifts in the smart home market all as a result of acquisitions that obviously signal major corporations and OEMs are using reserves to purchase new competencies. The year started with the big news that Google was buying Nest, a first-mover, smart thermostat designed and built by the founding father of the iPod. After a number of smaller acquisitions totaling about US $1 billion in the first half of the year, more recently, the Google-Nest group acquired Dropcam. The company Dropcam pioneered a revolutionary approach to home monitoring and surveillance with cloud recording. The Google strategy is pretty clear, they are absolutely using their purchasing power to cherry-pick innovative, elegant solutions to streamline the home and leverage Google's cloud infrastructure to connect the dots and (sooner than later) present an IoT solution for smart home capabilities.

Smart appliances are Samsung's focus

Samsung has also been on a buying spree focused on acquiring key companies in the smart home space. Samsung recently acquired SmartThings which gives them a ready-made solution for interconnecting devices within a home, obviously a great match for Samsung's own line up that ranges from refrigerators to washer/driers to name just a few top selling major appliances. This expansion and add-on capability to the Samsung appliance market is particularly strategic when we consider the competition Samsung is facing in the global (but especially Asian) smart mobile device market with new challenges from Xiaomi and Huawei, to name just two. Also noteworthy about the Samsung-SmartThings strategy, unlike Apple's HomeKit platform, but like the Google-Nest approach, Samsung has been opening up their developer platform and new application developers have been responding with new products and software applications, as FT reported.

On a separate note, according to Reuters, within one week of the SmartThings purchase, Samsung has also bought a US air conditioner distributor company, "Quietside LLC as part of its push to strengthen its "smart home" business." As Reuters reports, Samsung is quite clear about their market strategy and intent with these two major acquisitions this week"

"Because air conditioning products are a necessity in all buildings, including homes and offices, this acquisition is expected to be of help to our future smart home business," Samsung Electronics said in a statement.

Samsung Electronics aims to become the world's top home appliances maker by 2015, ahead of Whirlpool Corp. Quietside, which has around 500 stores in the United States, sells air conditioners for homes and offices.

Best Buy joins the smart home race

While we wait for Apple's expected announcements in just a couple of weeks, it is Best Buy that fills the last slot in acquisition news in the smart home market. GreenTechMedia reported yesterday that Best Buy is acquiring a start-up in home automation, Peq ("peak"), which, like Samsung's SmartThing and Apple's HomeKit, is designed to interconnect smart devices and appliances in the home – stitching together an Internet of Things (IoT) in the home through ZigBee technology, which is then the platform that is the smart home.

For BestBuy, Peq gives an entry to the smart home market through home security and monitoring, but the strategic growth path is on to thermostats, lighting, and other appliances. Notably, across all of the recent (and quite notable) acquisitions and strategic moves in the smart home market space, what we are seeing is not as much throwing new hardware into the fray, but rather, leveraging or acquiring the software platform to interconnect devices and appliances to enable consumers to customize and build a smart home one piece (appliance) or feature (security versus energy, etc.) at a time. Pulling back, we see that the leading companies vying for market share are ensuring that their offerings balance software and hardware/devices, but leave room for consumers to make the progression to smart home their own.

This market is well poised for some significant growth and a nice diversification venue for both smart device companies, software and services, as well as appliances and cloud companies. We'll be watching the movement to see what directions prove the most fruitful across regions.

Lisa Ann Cairns, Ph.D.
Written on Wednesday, 20 August 2014 15:40 by Lisa Ann Cairns, Ph.D.

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