Why the Smart Home Market is Flailing
February 05, 2020
The Smart Home made quite a showing at CES. I?d estimate that 15 percent to 25 percent of the total floor space included Smart Home devices and technology. Frankly, most of these companies are flaili
The Smart Home made quite a showing at CES. I’d estimate that 15 percent to 25 percent of the total floor space included Smart Home devices and technology.
Frankly, most of these companies are flailing.
Use Case Paralysis
In my opinion, the number one reason most of these companies will fail with their Smart Home products is that they don’t have a compelling use case. Take a look at Figure 1, an image which covered the side of a vendor’s booth.
The couple in the picture are having a romantic moment together (as is evident from the glass of wine). Suddenly, one of the couple (not sure which one) thinks, "Hey, did I leave a window open?"
There is so much wrong with this use case. Yet, this is the kind of “compelling” example consumers are being presented with as reasons to invest serious money in a Smart Home.
Smarter, But Not Better
I asked the smart coffee pot vendor why I need a smart coffee pot. The first answer was that I could turn on the pot from bed. I’m not sure how useful this is. After all, I have to load this particular pot with water and grinds each night, which is likely when I’m considering when I’m going to get up. So I could even more easily set the pot manually.
The vendor offered a more compelling example to buy the more expensive pot. “Say you’re at work and wonder whether you turned off the pot. Now you can check and turn it off so you have peace of mind.” Wait a second. Now I have to worry about whether I’ve left my coffee pot on? My current pot turns itself off after it’s done brewing because the pot is thermal and keeps coffee hot. So there’s been no real problem solved.
Actually, the problem here is that instead of making my life better, many smart devices are increasing the number of ways I need to interact with them. I used to just go to work and forget about my home. Now I have to check on the coffee pot, the thermostat, all the lights, the pet feeder, etc.
Yes, I have a smarter life, but it is not better for all these extra concerns I now have.
Not Worth the Price of Admission
As I walked the show floor, going smart seemed to run about $30 per node. My favorite example is the pantry shelf that weighs individual items and lets me know my sugar is down to 25 percent or less and reorders for me. Wait. I just picked up the box and used it. I can see how much is left myself.
This product is $300+ per shelf, and stores roughly 12 different zones/products. So it’s going to cost upwards of $2000 to outfit my panty to help me order groceries. Serious Money. This doesn’t even take into account…
- Time: One product lets me put tags on each item in my refrigerator. It glows to tell me that I should use it soon. Nice. I’ll throw away less spinach. Except there’s a cost.
When I bring groceries home, I have to press a tag and declare “Alexa, this is spinach.” This is going to add minutes to my unloading process, more if I have to tell the kids to keep it down so Alexa can hear me. It would take me less time to look in my fridge to see what I should eat tonight. And don’t forget to combine this with the previous item at $30/node.
- Myriad Ecosystems: Provisioning devices to your Smart Home is still a nightmare. And then you have to get them to work with your access ecosystem (i.e., Alexa, Google, etc.), which is hardly a seamless process today. I’m guessing that "Not being able to connect." is the number one reason for Smart Home product returns.
- Market Saturation: Frankly, we don’t need another smart lightbulb. So why are there more and more lightbulbs coming to market? They aren’t any different than the ones we can already buy. Yes, they provide consumers with more choice, but that’s a bad thing right now when consumers are struggling to figure out what they should buy and why. Think of something else to make.
- Smarter Means Thinking, Not More Capable: Most smart devices are designed so that you can do more with them. Like the smart lightbulbs. But they aren’t really smart. Yes, they are more capable, but the user has to manually access this functionality... which makes even a simple lightbulb confusing to use.
If these devices were smart, they would do more on their own. They wouldn’t require me to turn them off because they would figure that out for themselves. Again, more capabilities means more options means more difficult to use. To be smart, a device has to be easier to use. This is where artificial intelligence (AI) and machine learning (ML) come in. If you don’t have them in your product (or in the apps that monitor and manage your product), you don’t have a smart device.
Ugh. That’s a terrible lot of reasons the Smart Home isn’t going to do well. Sure, you might be able to argue away one or two of these for your product. But if you have to explain to consumers why these reasons don’t apply to your products, you’re going to get lost in the noise of every other company that is flailing to be in the Smart Home market.
Fortunately, there are many companies that understand what makes a good Smart Home device.