The smart home market is behind schedule, and early-adopter enthusiasm has only taken it so far. The next step needed to drive it forward requires a reconsidered approach to design and marketing, and the support of operators and utilities that can offer it as part of an existing service. At the European Smart Home summit, which Riot chaired, the differing approaches and ethos of many companies were presented, with utilities particularly interested in taking a foothold in the home.
What follows is a recount of the first day. The second day will be published in next week’s edition. For those who don’t think they have an interest in the smart home, it should be stressed that the sector is likely going to be one of the stickiest consumer offerings to date – giving service providers an opportunity to lock their customers into contracts. Nearly every vertical will have some overlap with the smart home, and they should pay close attention to its evolution.
For consumers, the smart home will become a central part of their life inside developed economies – but the big question that lingers here is the length of time this will take. All manner of platforms can be built out from a smart home platform, with sufficient partnerships – ranging from healthcare, dynamic insurance, and smart grid, through to the more obvious media, retail, and home service offerings. It’s a huge opportunity, but no one is certain when it will truly arrive.
The companies covered in this first part are: Delta EE, Hive (Centrica), Ikea, KNX, Pen Test Partners, ERA Home Security, Design Partners, Orange, Bluetooth SIG, Audio Analytic, Fortum Tingcore, and EDF Energy.
Delta EE, a research and consulting business, set the scene, with Jarryn Bradford exploring the differing definitions of the term ‘smart home,’ from the consumer, utility, and telco perspective. Noting that the main verticals for the tech remained HVAC and climate control, Home Energy Management Systems (HEMS), and remote control and automation – as well as the peace of mind and security uses that are enabled by devices like Amazon’s Echo or Google’s home.
Bradford said that there is a big opportunity to be embraced here through cross-selling services, such as selling water boiler servicing agreements through another smart home channel. Currently. Smart thermostats are still the leading device, but Delta is seeing strong growth in connected lighting and electrical plugs. Professional sales and installation have apparently remained flat through recent years, at around the same level as direct-to-consumer, but Bradford said that retail was now growing.
Telcos were named as the key players in the smart home market, but Delta believes that consumers are less keen on the monthly-fee model and would prefer to purchase a system outright. Partnerships with vertical specialists were also singled out as a promising area, particularly with insurance providers and security firms.
Centrica – Hive:
Earlier in his talk, Bradford had noted that Centrica had invested around £500m to differentiate itself from utility rivals, and that it was now the current leader in the utility smart home market. It was a nice segue into the presentation from Centrica’s Tom Guy, the Global Product Director of Hive – Centrica’s smart home brand that has expanded from the UK in the US, and most recently Italy (with Eni).
Saying that British Gas was looking to take the Airbnb or Uber approach, of solving a consumer problem and invoking a feeling, he pointed out that the solution didn’t have to be complicated – sending an SMS message on a Tuesday, rather than an email on a Monday, for example. British Gas recognized that thermostats were a pain point for its customers, with Guy explaining that a user would not put up with their feature-set or performance if they were a TV or computer.
As such, British Gas set up an internal team to address this problem. Running it like a lean startup (and demanding startup experience from its hires), the team that evolved into Hive was consciously avoiding getting trapped by the legacy approaches that might have been inherited from its parent. It set to work on the three core customer problems: usability, energy wastage, and heating lag (essentially, the spool-up time).
Using the app as a customer touchpoint, and British Gas’ extensive fleet of gas engineers as an influential field sales team (who also don’t have to stick to the regulated call center scripts), Hive was marketed in a very different way to British Gas – and also embraced the skills of famed designer Yves Bahar, who helped reimagine the app and the user experience.
The end result was a system that 95% of customers can control on their first attempt, which has over 650,000 customers and has shipped over 1m devices – although Guy noted that those numbers are slightly out of date. Guy’s advice for developers was to focus on designing for the mass market, creating services rather than the technology products. Noting that Amazon Alexa was probably the best partnership available now, he ended by emphasizing that customers care about the service, not the accompanying PowerPoint slides.
Next up was Ikea, a late entrant to the smart home considering its massive retail furnishing presence. Its recent launch of the Tradfri (‘wire-free’) connected lighting range has now been augmented by support for the big-three names in the consumer smart home – Apple’s HomeKit/Siri, Amazon’s Echo/Alexa, and Google’s Home/Assistant.
Bjorn Block, Ikea’s Business Leader for its Home Smart wing, explained that five years ago, he was a manager in Ikea’s lighting division, and was selected by the CEO to lead the smart home project because his division was the only one that worked with electricity, rather than wood.
Research ensued, in which Ikea discovered that only about 7% of consumers think of “home” as purely a physical location. The other 93% think it is some combination of place and emotion, and some 25% think that WiFi is more central to a home than a sofa. Bjorn noted that for Ikea, the home came before the technology – something reflected in the division’s name.
Block recalled being surprised when Ikea was said to be innovative in its inclusion of Qi wireless charging into some of its furniture in 2015, noting that the tech was available in 2008 and that the implementation wasn’t especially innovative. Stressing that ‘smart’ doesn’t always mean the product has to be connected to the internet, Block explained how the Tradfri range was designed with simplicity in mind – stripping away features that weren’t needed. Block noted that the company sees the smartphone app as a necessity, and not particularly interesting.
As for Ikea, Block said that the internal journey can be as challenging as the external one – quipping that it is hard to talk about the smart home in a flat-pack and allen-key culture. But Ikea was happy to take its time, and the six-year process was not a problem for the giant – which was looking to get its first connected product right, after trying twice to do TVs before. A key question for Ikea, which creates around two thousand new products each year, is how many should be connected.
The KNX Association was next on stage, with CTO and CFO Joost Demarest declaring that explaining the networking standard in twenty minutes would be a challenge. With 400 manufacturers on board, KNX has been plugging away in connected building since 2006 – when it was born out of the merging of BatiBUS, EHS, and Instabus.
Demarest said that the Association has over 7,000 certified products, and uses third-party labs to carry out the certification work – which allows those products to use the KNX trademark. In the past decade, the KNX installer network has grown from around 7,000 people to over 70,000 – although the protocol has remained much more prevalent in the professional sphere than the consumer market.
Working over both wired (twisted-pair) and wireless (868MHz), KNX can be interfaced with other protocols (like DALI, BACnet, and ModBUS), as well as support IP communication. Demarest said that the standard can support up to 60,000 devices per installation, and at those kinds of potential scales, KNX’s documentation is a valuable resource for customers worried about vendor or installer lock-in.
The Association had also just launched its new KNX Secure architecture, under the European construction standard EN50090-4-3 badge. Promising an end to digital break-ins, the system has two components (IP and Data), which define how a system should communicate with its components, and the encryption schemes to be used.
For KNX, the consumer and retail-based smart home hasn’t been a major focus. The standard has enjoyed far more traction with integrators and smaller-scale professional installers. Moving forward, it will be interesting to see if any of the big names in the direct-to-consumer smart home market begin embracing established protocols such as KNX, or if they chose to stick with the likes of WiFi, Bluetooth, Zigbee, Z-Wave, and maybe Thread (a good example of a smart home platform wanting to create its own solution to a particular problem).
Pen Test Partners:
Security was a theme for many of the presenters, and Pen Test Partners’ Tony Gee was having a wonderful time presenting the company’s findings on Bluetooth butt plugs. A main point of Gee’s was that there prevails a naive view of the device-to-cloud connection, and that there are actually dozens of extra links that could be exploited. Hackers have load of potential backdoors into a system.
A general observation of the penetration specialists is that SSL (Secure Sockets Layer) seems very hard for IoT developers, and pointed to the MVPower DVR as one of the worst examples of security the company had seen – with Gee noting that there were still 44,000 of these exposed devices on the Shodan search engine, even after an update was issued.
Walking the audience through how to crack the CCTV DVR and extract the WiFi password for a home network, Gee exposed how one insecure device could compromise an entire system. Pen Test eventually rick-rolled the developer until he stopped collecting stills from the cameras, and Gee also demoed a WiFi-enabled kettle that had an open telnet port with default credentials – before showing how the company had gone wardriving (using WiGLE) to find these kettles in the wild, and hack into their associated WiFi networks.
It is one thing to read about such exploits, but seeing how trivial some of the steps were was enlightening. Gee said that developers don’t think of passwords as their problem, rather as an end-user issue, but when it comes to lawsuits or returns, these developers could do with a rethink of that ethos.
Gee showed how the aforementioned BLE butt plug could be set to far higher settings than the app allowed, which could cause some pretty obvious problems, as well as a hack that could ruin some very expensive hearing aids. The FCC databases for RF registrations are apparently an invaluable tool for attackers too, thanks to their schematics, and the final hacking demo showed how a connected thermostat could be abused – potentially allowing a group to overload a local grid, thanks to the developer including the entirety of the thermostat’s firmware inside the accompanying smartphone app.
ERA Home Security:
Connected door locks were initially met with great skepticism when they first arrived on the market. However, it’s been a good few years, and we’ve yet to have a murder or robbery (to the best of our knowledge) directly tied to a hacked door lock – and so they seem to have passed a test in terms of acceptance.
ERA, a maker of around a third of all door locks installed in the UK annually, partnered with Unikey to create its connected locks – an established startup in the locking world, which came to the fore through a partnership with Kwikset. ERA’s Will Butler, Group Marketing and Innovation Director, said that while ERA knew how the mechanisms worked, it wasn’t as sure on the digital side of things.
The Unikey technology managed to survive a trip to Defcon, where no one was (publicly) able to crack the lock, although Butler noted that the lock itself was simply drilled out in seven seconds. ERA hopes its locks will do a better job of standing up to physical penetration, with the new ERA Home locks and ERA Home Guard alarm, as well as systems for monitoring windows.
Using technology to expand the capabilities of its core business, that of keeping people out of a home or building, ERA is hoping to use its familiar sales channels to bring them to market. Butler said that ERA wasn’t planning on expanding to other areas of the smart home, and would be sticking with its trade and master locksmith partnerships to promote the new products, rather than pursue a direct-to-consumer approach. Butler stressed that the contactless entry systems have to be better than the key to succeed – a device that has gone largely unchanged in a century.
The first of the design-focused presentations, Design Partners’ Creative Director Cathal Loughnane quipped that this was probably the only presentation the audience would see that was drafted by candlelight – owing to power outages caused by Storm Ophelia, in Ireland. The industrial designers have a lot of experience in the home, owing to their custom with the likes of Google, Nest, Philips, Honeywell, Harmon, and Samsung.
Loughnane’s talk was focused on the ways that a firm should go about designing smart home experiences for consumers that were not much used to the concept. He stressed that one of the most important elements was to give people back their time, through streamlining a process – especially important when consumers are beginning to consider time as a measure of cost, rather than purely the burden on their wallet.
Joyful interactions with devices (that satisfying feel of a switch or latch, for instance) was also cited as key, and is an area of the analog world that many digital developers neglect. Similarly, there must be careful consideration of how to weave those devices or experiences into a life or routine, and using familiar paradigms is apparently key to this – with Loughnane pointing to Philips’ use of a glass as the charger for an electric toothbrush as a notable example.
The next core focus for designers should be creating personalities for things, according to Design Partners, with Loughnane noting that Pixar has as much to offer in this regard as the best design theorists. He said that the personality must be consistent, as users will not trust it if it changes – and that we are quickly moving into the era where these personalities can be designed for smart homes and products. If your robo-butler begins asking weird questions, would that be enough for you to stop using it?
The final part of the talk focused on creating an appropriate presence for the system, with the example given of having suitably visible security systems for the exterior, but not having them on show for the interior. Loughnane stressed that it was important to make sure that the products or service properly represent the brand and the image it wants to convey – and that carefully fostering the user experience was fundamental to this pursuit.
Orange’s Thibault De La Fresnaye was the first operator representative to speak at the event, and said that they need to be more segmented to address the market – appealing to the different expectations that consumers hold for products and services. Noting that tastes had changed over time, with the PC slowly moving from mouse and keyboard, to touch, and now to voice control, the implication was that getting users accustomed to a new smart home interface was going to take some time.
But Orange has plans when it comes to voice, and is working on its own personal assistant – called Djingo. It’s a move to counter Alexa, Assistant, and Siri, and one that is also being pursued by Deutsche Telekom (a partner in a recent oneM2M and Eclipse demo). The goal is to capture customers, locking them into the Djingo personality and service, and use it as the basis for an Orange-controlled smart home platform.
De La Fresnaye said that the role of the operator here was to deploy the Wide Area Network (WAN), using WiFi from Customer Premises Equipment (CPE) for the in-home networking. He said that the bottleneck for the operator now was actually the in-home element, after a period where WiFi had surged ahead of cellular in terms of speed and high-speed coverage.
Now, Orange has built out enough of its LTE networks that WiFi has fallen back behind, but De La Fresnaye noted that the other major barrier that the likes of Orange faces is the ease of use for the customer – with device pairing a particular problem.
According to De La Fresnaye, the operators are getting around this partly by moving from expensive proprietary technologies into cheaper DIY options, such as DECT-ULE, Bluetooth, and eventually low-power WiFi (WiFi HaLow, a.k.a. 802.11ah). We asked whether LoRa had a role to play here, and De La Fresnaye said that it was currently positioned as a B2B offering, but could potentially be used to expand the “home” coverage farther.
Bluetooth Mesh was the main subject of the talk from Martin Woolley, the SIG’s Technical Program Manager, singing the praises of an ecosystem that adds some 3.5bn new Bluetooth devices each year. Saying that the protocol was keeping pace with market requirements, the new mesh and broadcast functions have positioned Bluetooth well for a push into the smart home.
Claiming 92% brand recognition, the 32,000-member SIG can bank on consumer awareness being a useful sales tool, and the protocol does seem to have recovered sufficiently from the Bluejacking fiasco of old. However, Woolley warned that members had to be careful of using the term ‘smart’ too liberally, as it is understood to add value to a system – and could cause a backlash if found not to be the case.
Woolley sees an opening for Bluetooth Mesh in more commercial settings too, saying that it could significantly lower the cost of covering large buildings – although it is definitely going to be competing with Zigbee in this space, a protocol which has carved out a niche for itself in industrial lighting. But Woolley notes that a hotel can have 50,000 lights installed, and that there is a role for Bluetooth in lighting applications, thanks to its broadcast and managed-flood messaging.
Chris Mitchell presented Audio Analytic, a software licensing company that develops an AI-based system for sound recognition on end-devices. The startup seems quite early on in the process, but Mitchell says it is working with the biggest product manufacturers on integrations.
Using on-device processing, not relying on a cloud application, the device doesn’t transmit data outside of its confines. Relying on phonemes, the system is basically spotting recognized patterns in the sound it is fed, and is then able to estimate what noise it has just heard.
Mitchell was keen to stress that the intelligence of a system depended on it having context. His anecdote of his young daughter calling Alexa ‘Lexa,’ and the system therefore ignoring her (“Lexa is being rude,”) showed that these voice systems are a long way from bearing a resemblance to the AIs presented in the movies. For the smart home, voice-based authentication is a major hurdle that needs to be crossed.
As for sound, Mitchell believes it is a vital addition to these smart home systems, in order to provide them with enough context to make legitimately smart decisions. Licensed per device, Audio Analytic hopes that smart home developers will adopt the general-purpose C code, and integrate it into their devices – in a lightweight footprint that does not require a hefty processor.
Next up was Johan Ander, CEO of Tingcore, a subsidiary of the largest Nordic utility – Fortum. Pursuing clean energy ventures, he noted that the utility industry did not have a good reputation when it came to new thinking – that it took them about a century to work out they had customers, not just delivery points. Collectively, utilities are facing great pressure on their margins, as energy has never been cheaper to purchase.
This led Fortum to acquire Tingcore, a smart city developer, with Fortum hoping to learn to swim by jumping into the water – and spurred by already paying for Tingcore’s services. Recognizing that increasing urbanization and the downward trend in per-unit energy prices was extremely disruptive for long-term utility planning, Fortum hoped to get ahead of the curve – selling off its grid assets to pursue these new ventures.
Ander said Tingcore had a gateway design, made for integrations with energy efficiency technologies like Plug-in Electric Vehicles (PEVs), Demand Response (DR), and battery storage. Ander also noted that the internet had evolved; moving from a military technology, to connecting people, and now things – and potentially becoming a truly intelligent entity in the future. He said that we are moving to a time when a consumer’s next purchase is connected by default.
Fortum is planning on expanding its SmartLiving cloud service, pitching it at more B2B applications, for energy monitoring and efficiency. Ander noted that while things like cars have embraced the latest technology, in buildings, you are lucky to see underfloor heating – and that they have some catching up to do here.
For utilities, Ander says that the IoT represents an endless sales opportunity, which could obviously boost revenues. But, more importantly, smart home services here can reduce churn, by up to 60% compared to the general population, according to Ander. However, there are challenges, with Ander warning of Betamax Syndrome, and the difficulty of supporting the devices when a single support call to a customer service desk could cost more than the sensor itself.
Joking that Ander had stolen most of his slides, EDF’s Head of Connected Homes, John Hutchins, said that the two utilities shared many of the same problems. EDF set up its Blue Labs Innovation Center to tackle them, and focused on trying to reach out to seriously disengaged customers – used to a very hands-off approach from their utilities.
Trying to shift the tone from ‘do it for me’ to ‘help me do it for me,’ EDF is looking at pushing its HeatSmart thermostat as a way to make energy interesting to the customer, and has also added an Alexa skill to handle bill queries. The next step is developing an in-home display (IHD – in partnership with Geo), to provide ten-second views of the home’s energy usage, rather than the 30-minute delays available today.
In terms of strategy, EDF is very conscious of the cost of amortization, and so is looking for things it can do for free – adding value to a customer experience without risking exposure for the utility. For adding devices or services, Hutchins said that bundling was going to be key, although the HeatSmart thermostat is a £200 upfront purchase at the moment.
Hutchins said that the smart meter was the bedrock device to the utility smart home, and moving forward, all smart grid tech is going to be based on the data generated by these meters. Eventually, the meter will be used to coordinate device power usage inside the home, as part of Demand Response, and adding things like Home Energy Management Systems and storage to the mix will only be possible on top of the meter. Because if this, utilities are in a very strong position to launch smart home platforms and partnerships with anyone looking to jump into the market.