Takeaways from CES 2016
Each January, professionals from across the consumer electronics industry gather in Las Vegas to attend the Consumer Electronics Show (CES), with the hope of seeing the next great idea that will shape the future of consumer products. By: Terrence Murphy, Director of Business Development, Appliances
At CES 2016, hundreds of companies introduced new solutions through a dedicated Connected Home marketplace. These solutions came from electronics manufacturers and small startup companies as well as control platform and software companies with solutions related to Connected Home. The underlying theme in all of the solutions was more devices in the home with basic and advanced connectivity. Specific to the Connected Home, below are three opportunities and trends I identified from the conversations, presentations, discussion panels, and demonstrations during the show.
Connected Home ecosystem is in early stages, and adoption to products remains low.
I was surprised to learn that 85% of homeowners lack any type of home control system (hub or platform), and that only 10% of homeowners are reported to have a home security system which can control other devices, while just 5% use a control system independent of a security system or other ecosystem-wide platform. The key opportunity seems to be the need to clearly articulate the value proposition to the consumer. And also, the need for devices to adapt to consumers and their specific preferences versus consumers adapting to devices. There is much work to be done here; the good news for us is that it is early and this creates opportunities for us to bring solutions to these challenges for customers.
The key opportunity seems to be the need to clearly articulate the value proposition to the consumer.
Consumers are confused: Need to define difference between Smart Home and Connected Home.
Although there are a large and ever-increasing number of companies working on bringing connected-home products to the market, and it seems everyone is working on or talking about the need for device interoperability solutions, the industry seems to struggle with delivering a clear value proposition to the consumer, in terms that are easily understood – or at least, that more clearly articulate the value opportunity. While there are many solutions that can accomplish a wide range of tasks, the demonstrations beg a question: Are consumers thinking about the value of interoperability when they purchase their first products in the space. When a consumer decides to go to the store to buy their first smart thermostat and a smart WiFi camera, interoperability between just two devices may not be top of mind. Most consumers are going to purchase a specific product for a specific need when they first enter the space versus purchasing for their whole ecosystem. Eventually though, the importance and value of interoperability needs to be clearly articulated and solved for as consumers consider expanding across the ecosystem. And it needs to be a seamless and affordable experience. If the consumer point product decision making process is complicated by the need to see which products work with what, or if their options are limited to specific brands, or if their existing products don’t connect with new products then adoption across the wider ecosystem will be slowed. So how can we as engineers expand our focus and include this perspective in our solutions.
Even simple questions are causing confusion: What do these products even do? How do they help me? And with what jobs or routines in my home? Do I really need to spend money on a smart plug to turn on a table lamp from my phone? What is that solving for me? The general sense is that there is mass-market confusion about the difference between the Smart home and the Connected Home. Bottom line, there is simply too much jargon around right now. Overall, however, the current use cases are simply neither succinct enough nor being clearly articulated. In this, there is an opportunity: The companies that will win in this space are those that can cut through the confusion and clearly articulate how their solution brings value – in the form of time or money – over time.
The companies that will win in this space are those that can cut through the confusion and clearly articulate how their solution brings value – in the form of time or money – over time.
Devices must create routines – and value!
The presentations and products I saw left me with an unanswered question: Can devices learn, move beyond phone apps, and offer more advanced connectivity than simple control and monitor functionalities? What I am really talking about is enabling consumers to proactively manage everyday routines with actionable technological capabilities that trigger actions based upon their own routines and lifestyle: setting temperature, locking doors, starting coffee at 5:35am, managing energy proactively, and so on. The opportunity, to me, seems to be with those companies that can create products which empower consumers to automate their own routines. If they can offer this, then wide-scale adoption will likely result. The genius behind the marketing around the connected home – such as for the Nest® Learning Thermostat™ – is how the story is told: Nest is marketed as a learning device, a device which adapts to your personal preferences around the climate in your home so you no longer really need to directly interact with your thermostat. It was not marketed as just another smart or connected thermostat for the home that you can set – or turn on and off – remotely with your phone.
Toward the Connected Future
The Connected Home marketplace was impressive, and showcased the direction of the industry. What I found most interesting at CES 2016 were the other Connected marketplaces, particularly the Healthcare marketplace: It was a bit larger than Connected Home marketplace, showing that companies are extending the idea of connectivity to include the full range of concerns consumers are interested in. Of particular note were the home healthcare products: Many of these focused on enabling connectivity through wearable devices. This focus on health and healthcare connectivity also extended into fitness and exercise equipment. In addition, the automotive industry had a significant presence displaying a wide variety of automotive technologies. Robotics (for the home and the factory), drones, virtual reality, and 3D printing were also all on display, at the variety of venues at the show. (I was particularly surprised by the booth sizes and variety of offerings from traditional camera and printer companies.) Looking ahead, it seems all the products which we as consumers rely on each day are being reinvented through the IoT revolution and the advanced connectivity it is making possible.