On the grid

The connected home is going mainstream faster than anybody realizes

May 26, 2014
May 26, 2014

In the US, at least, the “internet of things” is not the future any more, but the present.

One in five adult American internet users already has a device at home that connects the physical environment to the internet, according to a Forrester Research report (paywall) out last week. As many as two-thirds would install such a device if it helps cut energy bills (think Nest, the internet-connected thermostat recently acquired by Google) or improve security (like the Dropcam cameras that provide a live video feed from your home to your phone). And according to the grandly named “State of the Smart Home” (pdf, p.9) survey published recently by iControl Networks—a company that provides connected-home services to broadband providers—fully 40% of respondents think they will be able to send text messages to their home appliances within a couple of years.

These projections sound optimistic—yet more hype from companies flogging their wares—but they may, in fact, be on the conservative side.

Two developments last week point to the solidity of the business. First, Smartthings, which makes internet-connected devices and a smartphone app for controlling them (on iOS and Android devices), said that customers who have the app are rapidly increasing their use of it: In the past six months, average app use has gone from one to four times a day, push notifications (“Your front door is open!”) from five to 15 per customer per day, and the number of connected devices per household from five to 10. Alex Hawkinson, Smartthings’s CEO, told Quartz he wants the company to get out of making hardware and focus on the app side, so it can be a platform for other hardware to connect on.

The second is a deal between Microsoft and Insteon, a Smartthings competitor. Insteon will now make apps for Windows phones too, while Microsoft will sell the company’s products in its stores.

Connected homes are shaping up to be an increasingly fraught battleground. With its acquisition of Nest in January, Google clearly signalled its interest in the area. Microsoft’s deal with Insteon also suggests it is paying attention. And Amazon US has had a dedicated store for home-automation devices since late last year, with a UK store launched in April. The FT reports (paywall) that Apple will announce a major push into the smart home with a software platform that will allow the iPhone to control internet-connected home devices.

That’s why Insteon and Smartthings may well be on the right track—and the competition between them will be interesting to watch. Being able to use a single app for controlling all your devices should help home automation take off, since even the most enthusiastic early adopters would prefer not to have to open separate apps for lightbulbs, security cameras, garage doors, and pet monitors. Being the company people think of when they install a home controller on their phones will be a rich prize indeed—though competition from Apple will pose a formidable challenge.

(This piece has been updated to include the news about Apple.)

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