Some observations on smart home from CES 2014

I used to joke that home automation was always the next big thing for the last 30 years, but the problem was it quite never become enough of a “thing” to have the “next” removed.

However, after CES this week, it looks like it’s finally time for the word ‘next’ to move on as home automation (and more broadly, smart home) has finally grown up.

Nest certainly had something to do with this, but it’s more than that. The continued maturation of triple play services means service providers have been investing in smart home for the last 3-4 years as they try to get a fourth leg on that revenue stool, while key contributing technologies such as sensors and low-energy Bluetooth have continued to mature, become more pervasive and drop in price.

And then there’s the iPhone, iPad and other mobile platforms which have served as a catalyst in this space just as they have in so many other industries. The iPad in particular has allowed the home control and automation industry to move away from proprietary controllers, not only in the managed smart home and DIY markets, but also in the higher-end CEDIA based market.

Looking forward in 2014, I expect some important issues to be the continued potential of fragmentation as more companies look to provide the key connection platforms across the managed and point solutions.  There is also a growing concern about the overall security of smart home nodes, which could ultimately mean a pullback by some vendors and platform providers from open-APIs. Some longtime players in this space, like Lutron, have never open up their API, because of the potential concerns around security.

Lastly, I expect the continued battle between short-wave radio players to continue, as Z-wave, Zigbee, Bluetooth low-energy and low-energy Wi-Fi proponents will continue to trash-talk each other, but I actually don’t expect any to go away. Z-Wave and Zigbee have fairly large installed bases in both controller/hubs and end-nodes, while Bluetooth LE has significant momentum in point solutions like smart locks. As for Wi-Fi, there’s no doubt in certain segments such energy monitors they’ve had strong growth, and with the likes of Broadcom pushing Wi-Fi ahead of low-energy radios that begin with Z, I think Wi-Fi has a bright future in 2014 and beyond in the smart home space.

Relevant analyst in Bluetooth
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