Smart: IoT means business in the Game of Homes


By Jon Carter, UK head of business development, connected home, Deutsche Telekom

The smart home is far from a new idea, with traceable roots back to Victorian-era labour-saving devices, and more recently in the 1950s, when Electric (GE) unveiled its vision of the 21st century home, involving a futuristic kitchen complete with pop-up fridge, ice dispenser, plastic plate maker, and ultrasonic dishwasher.

Take this original high concept work, fast forward nearly 70 years, and here we are, in a time when the technology not only exists, but is easily produced in volume.

This is why analysts such as Gartner predict that by 2019 companies will ship 1.9 billion connected home devices, generating about Euro 446.6 billion in revenue.

The exciting thing is that this revolution is already underway; the number of households with some form of smart home system, such as connected entertainment, energy, appliance, security or healthcare systems, will surpass 100 million worldwide by the end of 2015 and are set to triple in the next ten years’ time to over 300 million.

So what areas are driving this market in the immediate future?

Security and safety

First, security and safety. Counterintuitively, this most conservative of markets is at the vanguard of the smart home growth revolution. MarketsandMarkets has recently forecast that the total European home security market will achieve a CAGR of over 25.4% over the next five years, driven by new and innovative developments in monitoring, the growth of digital door locks, wireless sensors and more sophisticated integrated cameras, with the latter contributing the largest share of overall growth.

One key reason for this market developing so rapidly is that the innovations in connected sensors have effectively reduced the installation cost and complexity of systems that would have been ultra-high end just a year ago. In addition, the option of integration with traditional monitored security operations, and with new social media platforms such as Life360 or means a connected home security system can become much more than the sum of its parts.

Energy management

Second, home energy management. On the one hand this market is burgeoning due to government regulation (or at the very least incentivisation) across Europe increasingly pushing smart metering, with the aim of giving consumers more control over energy costs.

These energy meters are a first step towards the addition of smart thermostats that enable consumers to monitor and control heating around the home. Bearing in mind that about 60% of household energy is consumed by central heating in Europe, it is clear why thermostats that can control energy usage will see such traction.

Home automation

Third, home automation, a broad church of devices that aim to make life easier and, indeed, more pleasant, that includes control of lighting, music systems, blinds and curtains and all manner of appliances (including new smart fridges or robot cleaners).

This is perhaps the most visible category, with new launches from the tech giants live Samsung and LG vying for media attention, bringing much of the buzz, excitement and education that this industry requires to mature and grow.

Interesting insurance

Fourth, insurance. The possibility of automation has attracted insurers to the smart home market, and this can help the industry reinvent itself to provide assistance and maintenance services, in partnership with support companies.

The connected home will give the industry far more insight into patterns of behaviour and the frequency of possible threats to the home. New models already exist in the motoring sector, thanks to technology that tracks driver risk, and the home market is likely to follow this trend.

Exciting entertainment

Fifth, entertainment. Although well under way in homes across Europe, the connected entertainment sea-change is a major driver in the smart home market. Recent launches by Sky (Sky Q), and the runaway success of Netflix, Amazon Prime and BBC iPlayer platforms all stand to prove that this sector isn’t going away.

Challenges for connected nirvana

There are considerable challenges to overcome to reach this connected nirvana however; perhaps the most complex being on the data side. This data will in many cases highlight entirely new consumer needs and behaviours, creating opportunities for businesses and for consumers alike, but the major concerns about security and privacy must also be answered.

Simply dealing securely with the volume of new data will require robust systems and best practice architectures to cope; partnering with best of breed specialists in data management will be key to success.

Of course, for such a complex and rapidly evolving area as IoT in the home these issues are only a starting point, the tip of a digital iceberg that is likely to change the way we live quite radically, arguably more fundamentally than any other technology to date.

The home is the backdrop to our earliest memories, where we in turn nurture our children, and where we seek to relax, to unwind, to switch off and to enjoy the company of loved ones, family and friends. Maintaining this delicate balance is the biggest challenge of all in the game of homes…

Deutsche Telekom has built an open connected home platform which was successfully launched in Germany under the name QIVICON in late 2013. The QIVICON platform is also available internationally and is already implemented in several European markets.


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