The FT reported yesterday that Apple will be announcing some sort of smart home ecosystem next week at WWDC. Interestingly, I’d written about Apple’s potential to do something interesting in the smart home space a couple of months ago on Techpinions, as part of a longer piece about how Apple has the potential to de-fragment various industry sectors, including wearables, payments and the smart home. Monday’s report got me thinking about some of those themes a bit more, and triggered several more thoughts, some of which I shared with Tim Bradshaw of the FT (who broke this news as well as the Apple-Beats news) for his follow-up piece on the subject. I thought I’d write up some of them here in more detail too.
Current state of the smart home market
In a word, fragmented. This market is characterized by a wide range of players with their own approaches to knitting together the various components of what might make up a smart home. No-one does everything end to end, so you’re either stuck with various islands that can’t talk to each other, or reliant on trying to find devices that participate in one of several ecosystems which are emerging. Qualcomm has AllJoyn/AllSeen, the UPnP forum is extending its work with UPnP and DLNA into this area, SmartThings, Staples, AT&T and others are creating their own proprietary ecosystems and so on. But it’s a messy business and no-one really owns it today. If you’ve bought products from several vendors, chances are you’d have to go into your Nest, Belkin and Phillips apps separately to turn your thermostat, home audio system and lights on separately. That’s not exactly user friendly.
But the point here is that the smartphone is the obvious controller for all these various devices, and yet none of the players currently playing in this market has a direct stake in the smartphone market, at either the hardware or OS layer. Qualcomm perhaps comes closest, but is two steps removed from the end user and as such has little direct influence over user behavior. The players in the strongest position here are those who craft smartphone hardware and software.
Apple’s smart home solution likely has several parts
I see Apple’s entry to this market as an attempt to overcome this fragmentation by creating yet another proprietary ecosystem to bring it all together, with the difference being that Apple likely won’t make any of the smart home appliances itself. As such, I think there are likely three parts to what Apple will do here:
- A communication system, likely incorporating Bluetooth LE and WiFi, allowing various smart-home devices to communicate with each other and with the Apple hub. Given that Apple introduced Bluetooth LE into iPhones with the 4S, into the iPad line with the iPad 3, into the Apple TV last year, and into various Macs over time, a household with lots of Apple devices in it is already “wired” (as it were) for BLE-enabled smart home communication. WiFi through Airport products or WiFi Direct is another possible component, which would take care of devices out of the relatively short range of Bluetooth. Apple will likely layer a proprietary brand à la iBeacon on top of this, even if it’s based on standard technology.
- A certification process, which will be a sort of combination of the Made for iPhone (MFI) program and its app approval process. This will ensure that both hardware and associated software meet certain minimum standards such that they’ll work together effectively. I think it’ll steer clear of guaranteeing anything about these products, especially from a security perspective, since it won’t control that element and it would open itself up to all kinds of liability. This process needs to be transparent and reasonably quick if it’s to work well.
- A user interface, likely in an app on iOS and possibly in OS X. I think of this is analogous to Passbook or the rumored Healthbook, a free-standing app with integration points with various other apps and devices. Passbook gets a bad press, but as a metaphor for what Apple might do here, I think it’s good. It’d take things that currently live in standalone apps and pull them together into a single place, obviating the need to go hunting around in different apps to do simple things, but not replacing those apps entirely for all functions.
There are at three things there that could each be branded separately by Apple – an AirPlay/CarPlay-like Bluetooth/WiFi connectivity standard, an MFI-like certification process, and a Passbook-like app. It’ll be interesting to see how Apple brands each of these (of course, iHome is already taken).
The one thing I left out above, but which could be another critical component of all this, is a cloud service running all this on the back end. A smartphone app with local connectivity to various smart home devices and indirect connectivity through third party apps across the cloud is one thing, but direct connectivity to a cloud-based Apple smart home service would be another. Much has been written recently about how Apple does / doesn’t “get” the cloud – most of it suffering from the same straw-man arguments as almost all Apple analysis. But storing the kind of data about users that Apple would get from providing such a service would open a whole new can of worms. And reliability would be critical for such a service, which for anyone familiar with iMessage bugs would be rightly wary of. To what extent will Apple keep the intelligence here centered on the smartphone, and to what extent will it be in the cloud?
This is a great test of the line between Nest and Google
Since the Nest acquisition was announced, much has been made of where the dividing line between Nest and Google will sit, with Nest vigorously defending itself against the notion that Google will get access to Nest data (or that Google ads will appear on Nest thermostats). But this Apple announcement could be a really good first test of where exactly the dividing line between Nest and Google sits, and how hard that line is. Nest is an obvious Apple partner here, with former Apple executives creating Apple-like products, but Google likely has its own ambitions for creating a smart-home ecosystem (especially if the Dropcam rumors are true). Will Nest be allowed to participate in Apple’s smart-home ecosystem as well?
Apple could do for the smart home what it did for MP3 players, smartphones and tablets
While Apple likely won’t announce any smart home hardware products of its own (at least for now), its entry has the potential to turn what’s largely a hobbyist market today into something much bigger. With almost 800 million iOS users, Apple has a huge base to market its capability here to, and with Apple retail and online stores selling Apple-certified smart home gear that’s tightly integrated with the Apple ecosystem, this could be a big deal. None of the other companies selling smart home solutions today have major global brands, and Apple could galvanize it like no other company could.