State of the Smart Home 2019 – Observations from CES

We share our view on the smart home market after our visit to the Consumer Electronics Show in Las Vegas.

After an exciting (and exhausting!) week of walking all over Las Vegas, chatting with companies large and small and furiously taking pictures and videos, we’ve uncovered a few trends we think will impact the market as we head into 2020 – artificial intelligence, ecosystem consolidation, the death of the stand-alone smart hub, the resurgence of Wi-Fi, and networking and connectivity innovation.

Artificial Intelligence – Smart Home AI is not there yet

AI at CES used to be just for robots and autonomous cars but now virtually every smart home product is marketing its advanced “AI” features – from smart doorbells to home appliances to connected cat boxes.

Unfortunately for users, it doesn’t appear on the surface that companies are interested in enabling what we call collaborative AI – taking all of the sensors and devices connected in our home and helping them work together to make active decisions without human intervention. Connecting a bunch of devices to a smart speaker and creating scenes to automate different routines in your home is neat, but Alexa or Google Assistant are not making decisions for you. It is still a very manual process that requires your time to set up and maintain it.

True collaborative AI for us means that the AI uses all of the data collected in our home to automatically make decisions and take actions autonomously and intelligently to make our lives better. Our Nest thermostat, one of our very first smart devices, already does this because it figures out when we are not home and turns off the air conditioning, and our Rachio smart sprinkler controller monitors the weather and decides whether or not our garden needs to be watered each day. Our Haiku fan is one of the few devices we own that collaborates this way – connecting to our Nest thermostat and turning the fan on or off to help keep our house comfortable. But the focus at CES is less and less on collaboration and more about the players building out their product lines with all the same devices.

We did see a few demos that we thought were on the path to collaborative AI. The RoomMe adds presence detection to the smart home to personalize it for each user. Viaroom plugs into your existing smart home hub to learn your patterns then automate routines for you. The GE Profile Kitchen Hub works with the Nest Protect smoke detector to detect cooking smoke and automatically turn off the burner. But while these are all great individual demos, the industry has a long way to go before we really start to see the smart home working for us and not vice versa.

Four Smart Home Ecosystems

Google Assistant

At the beginning of 2018, Amazon Alexa was definitely ahead in the smart home with the breadth of devices using Alexa voice control, but Google made a huge investment at CES 2018 to start catching up and this year spent even more to firmly position themselves. This year Google Assistant continued with their takeover of the Las Vegas Monorail and a big pavilion in the Convention Center parking lot, and added a ride and dozens more jumpsuit-clad Google Assistant experts spread throughout the event.

Even many of the tiny smart home startups downstairs in Eureka Park had their own Google expert working in the booth, and unlike last year when these folks were mostly quiet unless asked a specific Google question, many of these staffers were deeply knowledgeable about the products of the company they were helping. Google Assistant was in nearly all the devices that already had Alexa, and many new offerings as well.

Amazon Alexa

While Amazon itself had a smallish presence at CES, highlighting their Ring products and showing off Amazon Key in the smart home area and passing out bananas at several locations around the convention halls, there is no doubt that Alexa is the leader in the voice assistant race. It was difficult to find any wireless speaker at the conference that did not have Alexa and it was embedded in hundreds of other different products from cars, to tea kettles to backyard umbrellas, to toilets. While we love Alexa, it seems like this trend is getting a little out of hand and we foresee a privacy backlash looming – perhaps people will be start going out of their way to buy smart products without microphones and cameras.

Apple HomeKit

If you had just read the news about CES, you might have thought Apple HomeKit made a big splash at the event, since a lot of products announced HomeKit support. Certainly there were more devices than we have ever seen with HomeKit, thanks to Apple making it much easier for device makers to comply this year with software. However, while we saw lots of Amazon Echos and Google Home speakers, we saw very few HomePods being used in demonstrations and a lot of times companies mentioned the HomeKit support only as an afterthought – either when asked about it directly or perhaps: “We support Amazon Alexa and Google Assistant. And, oh yeah, Apple too.”

For certain, Apple AirPlay 2 was available in many more products, and HomePod and Airplay 2 go together. At its current price of $349 it will be hard to convince people to put HomePods throughout the house, unless they are using it primarily for high-fidelity music streaming, where consumers are used to spending that kind of money. Maybe Apple is still holding back, waiting for the market to truly mature before they make a huge investment. But for now, they are still definitely number three and it feels strange to see them clearly behind in a consumer technology.

Samsung Bixby

Samsung has had their Bixby voice assistant on their best-selling Galaxy phones for a number of years now and last year they started talking about using it more in the smart home as well. This year they had an elaborate smart home demonstration showing Bixby working across all kinds of Samsung products – refrigerators, washing machines, ovens, as well as their SmartThings smart home platform. The Galaxy Home Smart Speaker with Bixby was announced back in August and while it is still not shipping, Samsung had an impressive demo in their booth showing its surround-sound style audio and its ability to recognize and direct sound towards the person in the room.

While Samsung is clearly behind the other three smart home ecosystems, they do have one thing the others don’t – the SmartThings platform – right now the leading consumer smart home hub with years of history and thousands of users – and Samsung is adding the SmartThings Hub to its other products – the Galaxy Home Speaker, the SmartThings WiFi mesh router, the Samsung Family Hub Refrigerator, and the Q Series and above Samsung televisions.

The slow death of the stand-alone smart home hub

Just a few years ago there were dozens of smart home hubs on display at CES, platforms that allow you to connect, integrate and program many different types of smart home devices and sensors into routines to automate your home. Hubs are certainly still out there and the Z-Wave alliance, the low-power standard that many smart home products use to connect to them, is still going strong with thousands of members and new advances in speed and battery life.

However, there were very few stand-alone hubs in the show floor. Lowe’s Iris and Wink, two of the leading US consumer brands a few years ago, no longer show up on anyone’s signage, and increasingly companies are trying to put all the technology they can into a different kind of box. Whether it is putting SmartThings into a refrigerator, adding Zigbee support to the Amazon Echo Plus, or creating a whole new product like the Milo, which has every smart home radio plus Alexa or Google Assistant built in, smart home companies are trying to get the most value for their customers in one product.

Fibaro was at the show and still makes an excellent, powerful smart home hub, as well as Vera Controls, with a long history and loyal following, but both of these companies are selling their own products as well as supporting the rest of the ecosystem. One innovative hub we saw was Mixtile, that does not require the internet to control your smart home devices unless they are only connected to the cloud. We’ve always felt this was a requirement for smart homes, and hope to see this trend continue for all devices.

Increasingly, companies are forgoing the hub altogether, building products based on Wi-Fi that can quickly connect to a smart speaker, or that can only operate via the company’s app, such as the MyTouchSmart line of plugs and switches, and the Kwikset Halo series of smart locks. While Z-Wave and Zigbee-based products may work really well for professionals and for advanced do-it-yourselfers, these companies know that nearly everyone has Wi-Fi and not everyone wants to buy another box to turn on their lights or unlock their doors. It may not technically be the best solution, but it is good enough for most consumers.

Better Wi-Fi and a more secure and private Internet

While Intel, Qualcomm and Verizon are proclaiming the game changing future of 5G, most of the rest of us are all still using Wi-Fi to connect a lot of our devices at home. Thankfully, there have been a lot of incremental innovations that have become almost standard in the home technology space. Most every major brand, even Stanley Black and Decker, has a mesh Wi-Fi router that allows you to get high quality Wi-Fi all around your house and even into your yard, using multiple satellites to spread the coverage. These products continue to get smaller, faster and cheaper and should continue to improve, making it much easier to add more Wi-Fi devices in your smart home without bringing down your network.

Linksys, Netgear and others are also starting to integrate smart firewall technology into their routers, making it safer to connect more devices and protect them from outside threats. We have been using the Cujo Smart Firewall since we first saw it at CES in 2017, so we are happy to see this technology migrating into more and more consumer devices. Netgear announced they will include Bitdefender’s smart firewall as a firmware option with subscription this year into at least the Orbi Mesh Routers. Comcast has started rolling out Xfinity XFi, incorporating Cujo AI into its XFi Gateway.

While these systems are making Wi-Fi more secure, privacy is an emerging concern for everyone. With all these connected devices that know our exact location and our habits, there are lots of people who would love to use this information to sell us things or worse. We were really interested to learn about Winston, a new device that gives you back control over your personal data in your home. Winston is a small box that connects to your network to scramble, encrypt and anonymize your home internet activity. We can’t wait to try it and hope that this kind of technology also starts becoming available more broadly in the future.

Do we need a subscription to run our home?

All new technology companies struggle to find the right sustainable business model for their products. Amazon and Google are able to keep the price of their smart speakers relatively low and provide voice services because they make so much money from other things they sell us. But for smaller companies building new products, they either have to set a high price for the hardware, which may not sell, or they need to add some kind of subscription to help offset costs and make a profitable business. Many smart doorbells and cameras have always required a subscription to get the ability to store recordings, and some are now starting to charge to unlock additional cloud features like AI or advanced motion detection. Nest and Ring have been offering subscription security services that are now as much or more as traditional ADT systems and Arlo has just entered the market as well.

In a world where a lot of things have been unbundled and younger generations are comfortable with lots of small subscriptions, we could wind up in a scenario where we are making many small payments every month to keep using our smart devices. It may not be that big a deal on a small scale, but imagine if the company goes out of business or discontinues the service. Will your door sensors still alert you if someone breaks in? What happens if you stop paying your subscription? Will your doorbell still work? How long will consumers put up with this before they either stop using the products, or give up on DIY and pay someone to set up and manage their entire smart home for them? It will be interesting to see how this plays out and if it will drive even more consolidation of products and services.

Pure technology innovations

Underneath all the shiny smart home products and services at CES there were some technical innovations that we think will start impacting the entire industry this year and beyond.

Z-Wave 700 Series

Z-Wave already powers more than 2400 different interoperable products in the smart home and Internet of Things, with over 100 million products sold worldwide. Products using Z-Wave use minimal power and get great connectivity in the smart home since they mesh together and operate at a lower frequency than Wi-Fi, with less interference. The Z-Wave 700 Series is the newest platform for home automation and will enable even longer battery life – up to 10 years on a coin cell battery, with longer ranges. With this kind of battery life, companies will be able to make all kinds of sensors that can interoperate with the already huge array of home automation products. Sensative was the first to show a prototype flat Strips sensor at CES, and many more 700-series products will be coming out soon.

LoRa

LoRa (short for Long Range) is a Low Power, Wide Area networking protocol, more commonly used in industrial applications but starting to appear in a few smart home products today. Using LoRa, smart home devices can communicate up to one mile away. Sensative also has Strips sensors using LoRa, and Palo Alto Innovations announced their Node-ify Axon, a set of modular, customized sensors using LoRa that are easily configurable to make all kinds of objects in your home smart.

Bluetooth

Bluetooth hasn’t gained significant traction in the smart home market due to range issues, but the new standard for Bluetooth Mesh may change that, providing yet another path for low power devices.

It will be interesting to see how companies use all these emerging and improving technologies over the next year and how they will impact CES 2020.

2020 is almost here!

It’s hard to believe that we are less than a year away from 2020. While we still don’t have robot butlers or flying cars, we can talk to our homes and play with our pets over the Internet. We are looking forward to continuing to explore smart home technology and keep you up to date on the latest here on AppMyHome.