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Did Comcast quietly win the smart home fight at CES?

CES 2018 was not the stage for a battle to the death between Amazon, Google, and Apple. It was home to a plethora of product announcements, each a little victory for the big-three consumer brands, but no one dealt a knockout blow. But working in the background, cable TV giant Comcast prepared an opening salvo in its fight to sew up the Smart Home as a Service (SHaaS) market. Comcast has been developing its Xfinity Home platform for a few years now, and has just opened the doors for third-party integrations – setting the stage for a licensing business that could go global, if it pulls the trigger.

There’s an inherent tension between the new BYOD approach and the existing bundled package method. With the bundles, Comcast can generate a margin on the devices it buys from suppliers and then sells on to customers, either via one-off upfront fees or through monthly repayments. However, letting its customers bring their own devices into the ecosystem would bypass this opportunity for Comcast.

But Comcast still stands to gain, even if it entirely forgoes that sales opportunity. By providing the backbone X1 router, and the control applications, it would remain central to the new smart home experience. In addition, it should be able to completely bypass any negative sentiment from its subscribers, by opening the gates to what could have been a walled garden.

Its customers should get a better experience, and Comcast should be able to enjoy the same stickiness of this more open offering as it would with its own bundles – people will be less likely to churn away from the Xfinity ecosystem if it means breaking their smart home into pieces and trying to reassemble it (such is the nature of smart home hubs, currently). Comcast will need to determine the balance of lost potential revenue versus increased customer retention.

To this end, in the run up to CES, Comcast announced that all of its Xfinity internet customers, around 15m of them (out of an apparent total of 23.5m residential internet customers), would now be able to add smart home devices to their X1 set tops – and control them using the X1’s voice-capable remote control, the xFi smartphone application (which began life as a way of managing a home’s WiFi network) or the Xfinity Home app.

Aiming for the upper end of the consumer smart home market, the current list of partnerships and integrations includes August, Carrier, Chamberlain, ecobee, GE, Honeywell, Kwikset, Nest, Philips Hue, Sengled, Tile, and Zen. That’s enough to build a pretty comprehensive smart home experience, and Comcast says that list will grow.

Notably, there’s no mention of those big-three consumer smart home players, highlighting Comcast’s desire to keep them out of the customer interactions. It doesn’t yet have the ability to offer the voice-search functions that an Amazon Echo or Google Home can (setting alarms, providing voice calls, searching the internet, etc.), but we imagine that Comcast must be working on adding that capability to its X1 platform.

“What we do see is that people who use Xfinity in the home tend to have more devices,” said Chris Satchell, Comcast’s chief product officer, speaking to TechCrunch. “It’s not about, ‘can we sell you more IoT devices.’ Although we do produce cameras and so on, but one thing I like to think is that we’re adding value for the consumer. You’ve already got three cellphones connected, so this gives you another use for them.”

Satchell went on to say that Comcast would be working on adding the digital assistant capabilities to its platform, so that users can tell it to perform functions – set scenes, lock doors, activate security systems, etc. Whether that’s through the smartphone app (seems most likely) or potentially through an integration with something like the Echo or Home, Comcast needs a hands-free input method for these voice controls.

Comcast has made two recent acquisitions in the smart home space, buying up a large chunk of Icontrol Networks in June 2016, (Alarm.com got the rest) to secure software that Comcast was already paying for, and then buying Stringify in September 2017, a provider of IFTTT-like programming frameworks for smart home devices. They built on the 2014 purchase of PowerCloud, a software house that provided the basis of Comcast’s device monitoring tech.

Cumulatively, Comcast is very close to having a complete platform that it could license to other pay TV companies or ISPs – in a similar way that it licenses the current X1 platform system to Shaw, Videotron, soon Rogers in Canada, and Cox in the US, where it has also been rumored to be licensing X1 to Charter.

With a fully compatible smart home service (thanks to the Icontrol purchase), the new system could find itself in great demand from companies looking for a straightforward way to add smart homes to their portfolios. AT&T was working on a similar proposition called AT&T Digital Life, but its only adopter, O2 in the UK, has pulled the plug on the O2 Home service – citing a lack of customer demand.

Comcast will also be looking to work out how to integrate its LoRa project, MachineQ, into its core businesses. With its home-based WiFi footprints, Comcast can sell access to these WiFi access to other network providers, who in turn can provide their customers with access. While it seems unlikely that Comcast is going to start requesting LoRa radios inside its next-gen X1 set top RFPs, we think LoRa is going to start cropping up more in the smart home – especially if Comcast can set an example to developers on the potential scope of such an integration. Access to utilities might be the most convincing argument, as well as telehealth and patient tracking.

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