When will the Digital Smart Home market take off?

Market Research: Mass-market Households versus High-end New HomesDigital Smart Homes, including some of the same sensor and networking technologies that we promote for home health care, have long been associated with large and expensive new homes with custom installation. It’s a market that has languished as a niche for over 40 years now and has never managed to find its way to mainstream consumers. Why?

Someone asked that question in a forum I monitor, and I had to add my two cents, which I include here for perspective.

Contrast the Digital Smart Home with a modern car. When you buy a new car, it comes with everything included and already integrated to work together. There are many things you DON’T have to buy separately and install yourself, including tires, air conditioning, radio, CD-player, navigation, antilock brakes, towing package, etc.

Could homebuilders ever offer that level of system integration? Theoretically yes, but not likely, because when you buy a new home, you expect to use your existing TVs, refrigerator, alarm clocks, phones, etc. You also expect to upgrade with new (maybe automated) window treatments, ceiling fans, light fixtures, a new hot tub, and other things over time too.

That’s the dilemma facing the Digital Smart Home market. The home itself is just a structure that houses many different digital subsystems, each from different manufacturers in different industries. Each product or subsystem was developed by a different set of stakeholders having different objectives. Lighting systems, for example, only understand commands like On, Off, Brighten, and Dim. They don’t understand Open/Close, Volume Up/Down, Favorite Channel, Record, Stop, Fast Forward, Set Temperature, etc.

That basic concept goes back 20 years to the CEBus days, where a few developers got together to “try” to define a common language. It also reflects on the Device Discovery and Plug-n-Play concepts, where any new “compliant” device introduced into the Digital Home would announce itself and broadcast its capabilities so all other devices would know what commands it could respond to.

All of that sounded great to Digital Home systems integrators but not to product manufacturers who would need to add new technology, even when they were already fighting to compete on price and where there was no clear market demand. And Government was in no position to force such standardization.

It’s also helpful to understand that new systems introduced into homes appear over time, and the technologies change over time. Consumers tend to upgrade their systems in piecemeal fashion rather than all at once. In the entertainment center, for example, one person might install surround sound, while another adds a new game console, changes out their VCR for a DVD player, replaces DVD with BlueRay, adds cable TV to replace an external antenna, or connects Internet TV to replace cable.

My perspective has evolved over several years from when I wrote a major market research report on the home controls industry. The mass market that I said was now possible never materialized. As it turns out only one of the barriers to  mass market adoption was addressed. I cited the need for better marketing as the remaining barrier, but I failed to consider the above factors.

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3 Responses to “When will the Digital Smart Home market take off?”

  • Ric Johnson, DHTI+:

    Wayne, I like your analogy. With the car, the customer can take what is on the lot, or order a custom built one from the manufacturer. The basic car is in place, just the options are added. the Digital Smart Home is available today as a custom built unit, with the basic underpinning of structured cabling to each room in the home, along with some type of User Interface. Most builders in the midrange of housing, i.e. $250,000 to $400,000 just do not see their client base asking for master control of the home, thus no thought is put into adding or even explaining Digital Smart Home technology to their sales staff or the client. However, with Verizon, AT&T, and ADT all adding this technology to their offering, main stream America will be seeing more and more complete control options available. As more of these systems become available the general public will be more interested, the pricing will come down and maybe, midrange builders will look at systems to be standard in their homes.

    Directly to your industry, we are a Grandcare dealer and a HAI 5 Star Dealer. We can not use the same sensors for both systems. The GrandCare® requires ugly, surface mount Z-Wave or X10 sensors, while the HAI has hardwired, hidden sensors doing the same function. We have gotten a lot of push back about adding a second sensor to the doors, a second motion detector, sometimes at the same location. It would seem smart to have the GrandCare® unit be able to read the same signals as the existing HAI system. This is the disconnect that both potential clients and builder/remodelers find so unsettling. I can control most any A/V source, light fixture, appliance and surveillance cameras, but I cannot add a healthcare monitoring system to the mix.

    Why hasn’t the Digital Smart Home taken off? While I agree with some of your points, we still shoot our selves in the foot until price points come down, trade associations stop pushing just “High end” installs in their awards and press releases, and the trade press shows a majority of middle income installs instead of the $100,000 home theaters and $1,000,000 custom home installs most middle class prospects are turned off. Yes, they like to look at these fantastic rooms, but believe that they can not afford the technology. Let’s all work to develop middle income projects, promote them extensively, talk with the trade press about showing the $5,000 home theater and the $12,000 Digital Home.

  • Ric, The compatibility problems between GrandCare and HAI are so typical. Wouldn’t it be nice if the various digital home subsystems (TV, Internet, lighting, HVAC, security, window shades, sprinklers, appliances, health, etc.) used the same standards so consumers could install just what they need, when they need it, and expand as their needs change?

    That’s been the Holy Grail for decades now. But even with the availability of wireless & powerline standards that can scale up- and down-market from DIY projects to high-end custom homes and commercial buildings, the Automated Digital Smart Home market has not matured.

    It’s NOT a technology issue, in my opinion. Now there are actually too many standards that can scale. (See http://www.caba.org/standards-protocols.) That’s largely because manufacturers lack a holistic view and focus only on their own application needs. It’s also because big players in the standards process want to “own” and control the intellectual property.

    For example, members of the Wi-Fi Alliance and WiMedia alliance have focused on high-speed wireless LAN technologies without much worry about how to interface with low-speed wireless technologies like ZigBee, Z-Wave, and Bluetooth LE. Each group had its own set of objectives, so their resulting standards each have advantages for their own product-use scenarios but aren’t really appropriate for other scenarios.

  • From http://dhdeans.blogspot.com/2011/07/truce-among-powerline-home-networking.html

    A “Truce Among Powerline Home Networking Standards,” and the resulting cooperation, should benefit both CE manufacturers and consumers. While there’s still some competitive battles among powerline communications standards — such as HD-PLC and UPA — HomePlug has emerged as the victorious market leader for powerline home networking solutions.

    In addition to being the leader in the sector, the HomePlug Alliance has also signed liaison agreements with the Multimedia Over Coax Alliance (MoCA), the Wi-Fi Alliance, and the ZigBee Alliance to promote cooperation and interoperability in home networking.

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