The Giants Entering the Connected Living Space: Not a Threat, but an Opportunity
One of the best things in the connected living industry is that the market scope is huge. There is room for many players, and for myriad potential services and offerings to suit each customer’s needs. With a market so big and so full of unexplored opportunities, it is only logical that the big industry players, like Apple, Google or Amazon want their share of the pie.
This may be seen as a threat by smaller companies. It could be a threat to companies with a long trajectory in adjacent industries that are also beginning to expand into connected living solutions, such as traditional security service providers or telcos. However, it is important to see these major players not just as a threat, but also as a unique opportunity for growth for the industry. Healthy competition is good for the market, as it pushes companies to give their best, driving innovation and improvement, and delivering better solutions and services for consumers.
The three technology giants not only are investing large sums of money and resources in developing their connected home strategies. They are also experimenting and driving innovation in the market, while at the same time helping raise awareness among consumers, exposing them to these technologies for the first time. When considering the low level of awareness of smart technology at present, this is something to be happy for.
Amazon’s voice-controlled Echo, for example, has already sold over 3 million units, and seems to be getting a very good reception among consumers. This contributes to accelerate adoption of connected homes, while helping demonstrate of what these devices are capable. Consumers are beginning to understand the value of connected living, and the positive impression that devices like Amazon Echo make among users are also benefiting the market as a whole. When aiming for mass market adoption of a new technology, word of mouth is essential. Consumers follow advice from people they trust, people who have tested the product before them and are satisfied with the purchase. Each time Apple, Google or Amazon announce the launch of a new smart home device or product, they are helping to create awareness and stimulate consumers’ interest in connected home technologies.
The strong competition between the three big brands is also a sign that the connected home market, although still very young, is growing, strong and healthy, with a very promising future. As John Raspin puts it in this Frost & Sullivan report about smart and connected homes: ‘The level of activity and investment being made by major corporations – Google, Samsung, Apple, Amazon etc. – suggests that the industry is reaffirming its commitment to the smart home space – nobody wants to be left behind when consumers eventually become engaged.’
Also, if we look at what the giants are doing, we can easily see what they think the future of home automation will look like, providing valuable lessons for other industry players. Echo’s smart speaker, powered by Amazon’s personal assistant Alexa is helping test out how voice controlled devices work among consumers and producing interesting results that can be measured and leveraged by the rest of the industry: voice control is rapidly becoming the consumer’s favorite way of interacting with their connected living devices. It is no coincidence that both Apple and Google (and, reportedly, Samsung) are implementing their own voice-controlled solutions. Apple, with Siri via their HomeKit app, and Google with their recently launched Google Home, a device without a single button, also voice-activated by the new Google Assistant. In addition, there are some compelling reasons to believe that these big brands should not be seen as direct competitors to other market players, such as home security providers. Apple, Google and Amazon are not professional security companies, just as they are not healthcare providers or telcos; that is totally out of their business scope. If they want to reach those markets, partnerships will be necessary.
What companies like Google, Amazon and Apple are doing in the connected home space is to provide great innovation and customer experience. And though this may seem like a threat for companies that develop or market connected platforms and devices, there is also opportunity here. Big companies can help provide the seamless customer experience the industry aims for, but they cannot cover every possible user need. The key is developing products that can be seamlessly integrated with other providers’ devices and services, creating a truly connected home, a wide ecosystem of products that speak the same language and include many different players.
Though the future roles of these big companies in a connected home market that is just taking shape is still unclear, there is no doubt of the role they are playing at present. They spend millions of dollars in marketing, something which smaller companies cannot afford, help increase market awareness by educating consumers about connected living technologies, all of which is driving the industry forward, creating new business opportunities for service providers and dealers and benefiting the industry as a whole.
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