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20 March 2020

Smart home prices tick further downwards, where’s the bottom?

Amazon has been responsible for yet another smart home device price drop. This time, a Gosund smart plug is going for just $5 – the latest price cut in a broader trend of ever smaller prices for smart home devices. Gosund’s price is a huge reduction on the typical prices for these devices even a year ago. In June last year, Innr’s Smart Plug was being sold for $35, while Philips’ Hue SmartPlug went for $40 in September.

Having surveyed the history of other smart home device prices, it seems that, in general, vendors are trying to make devices more affordable. This is usually done not by dropping the prices of older models, but by introducing newer cheaper models.

If a device experiences a dramatic price drop for the same model, Amazon is usually involved. The giant has been responsible for slashing the price of both its Ring doorbell – $100 down from $180 following acquisition – and Hive smart light bulbs. Gosund’s smart plugs have now met the same fate.

Aside from Amazon dropping prices at whim, the other force at play is the newer budget ranges and brands, often hailing from Southeast Asia, which force Western OEMs to respond with cheaper models. Generally, it seems price drops are more common for the less critical devices such as lights and cameras, as oppose to locks and thermostats. If we look at smart cameras, we can see a general trend of falling prices. This is likely to compete with the cheaper brands of recent times, such as YI Dome and Wyze.

The price of Canary cameras has plummeted over the years. The company launched in first camera in January 2013 for just under $200, with the next model priced at $179. The large drop came in January 2018, when Canary announced the Canary View for $99, dropping even further to $92 when launched in the UK last year.

Reolink’s camera ranges have also seen a small drop. The Argus 2 debuted for $120 in January 2018 and was quickly followed by the more “affordable” Argus Pro in June 2018 for $92. This was not as low as the $80 that Reolink offered its first Argus camera initially, but that was just for ‘super early bird’ customers in April 2017.

Of course, in recent years, budget cameras have taken the market by storm. YI Dome offered its Camera X for $60 in June 2019, but the most disruptive vendor is probably Wyze, which launched its WyzeCam V2 for just $20 in October 2017. Newer products with a higher spec are still incredibly cheap. The Wyze Cam Pan, with 1080p resolution and a tilt mechanism, debuted in May 2018 for $30. Wyze seems to be hoping to build a user base and then monetize them via services, a very Silicon Valley approach, compared to Southeast Asian approach, which is usually hardware revenue only.

Netgear spin-out Arlo’s smart camera systems seem to get more expensive with each product announcement, which the company justifies with an improved spec. The Arlo Pro System came out in 2016, costing $250 for a base and two cameras, and $190 for each add on camera. Arriving in October 2017, the Pro 2 System shot up to $480 and add on cameras increased to $220. Another price hike came in September last year, when the Pro 3 system was announced, costing $500. Add on camera prices had declined minimally to $200.

‘Smart’ lock prices have declined at a much more modest rate, if at all, but this is likely because a lock critical device compared to a camera. Knowing what your dog is up to is far less important than knowing that your door is locked, and low prices could make consumers feel insecure.

August’s first smart lock launched in May 2013, costing $199. This first dropped to $179 and then to $149 in September 2017. At the same time, August announced another model with higher spec, the August Smart Lock Pro, costing $279.

Schlage’s smart locks have also seen prices go down. The company’s Sense Smart Deadbolt cost $299 when announced in January 2016, but the more recent Encode model debuted in January 2019, costing $250 for WiFi connectivity or $199 for the Zigbee/Z-wave model.

Kwikset’s smart lock prices have increased, with many higher spec ranges brought to market. The company’s first smart lock, Kevo, launched in October 2013 for $219, with the second-generation model costing $229 in August 2016. A more recent device, the Halo Touch WiFi Smart Lock, with a built-in fingerprint scanner, debuted at $249 in January this year.

It seems that for smart locks, Big Tech involvement doesn’t always lead to low prices. Nest collaborated with Yale on a smart lock, but this hit the shelves at the high-end price of $249 in March 2018. Recently, Brisant has also been releasing high end devices. The Ultion SMART lock cost either £229 or £259, depending on whether consumers go for Bluetooth or Zigbee/Z-wave connectivity.

Smart light bulbs have seen a clear drop in price. These days, thanks to budget brands, consumers have little reason to pay more than $10 for a plain smart bulb, while $20 will get a perfectly adequate colored bulb. Ikea’s Tradfri smart bulb ranges have experienced a small price drop. In March 2017, the Swedish retailer announced new LED bulbs that priced at $20 and $25. Today, Ikeas cheapest bulb is the Tradfri LED Bulb E26 806 Lumen, priced at just $9.

When LIFX first announced the Color1000 in March 2016, it cost the high price of $85. The company now has color bulbs going for almost half that, with the Mini Color costing $45. Even cheaper is the Mini White, currently retailing at $20 – quite a high price these days for a plain smart bulb.

Osram’s Lightify full color bulb debuted in October 2015 for $60, where as now the company’s cheapest bulb is the Smart+ LED Zigbee Lamp, costing just $10. Hive debuted its Active Lights at £19 per bulb in June 2016, with the user having the additional cost of installing a Hive smart home system. Yet come November 2018, Amazon were offering a Active Lights Starter Kit for £50 with a Hive hub and two bulbs, marking a 50% price drop.

Although Philips is always adding more products to its Hue lighting range, there has been some price drops. While in March 2017 an E14 Candle Bulb cost $40, in September 2019 consumers could get two E12 Candle Bulbs for $33. Currently Hue Filament bulbs retail between $25-33, while a Hue Go Light costs $80. Lower prices have likely been pushed by Chinese entrants such as Xiaomi. The Mi LED range retails at around $10 for a white bulb and around $20 for a color bulb.