Consumers are turning to their telephone service providers when it comes to buying smart home systems which enable them to remotely manage their household appliances, lights, heating and other devices. This is according to a recent survey, carried out by IMS Research. The survey analyzed the attitudes and expectations of 2,500 respondents, with 500 each from the United States, Brazil, the United Kingdom, Germany and China. The majority made this choice based on familiarity. Telecom operators should take full advantage of this as many large companies across the globe are struggling to compete in this very competitive business which continues to grow. Experts estimate that smart home revenues will escalate by 12% every year until 2020 in Europe. This figure includes both direct revenues, such as home automation services and products, and indirect revenues such as the maintenance of new devices and services.
The development of smart home services are generating the emergence of many business models, providing a wide range of what may become essential components for the smart home. The smart home offers many new applications such as home automation, home cloud and e-health services. Here are a few:
- Homeowners and/or response companies can be alerted of any security breaches or accidents such as water leaks in the home
- Monitoring of elderly people by family and medical staff via smart phone and alerts
- Monitoring of medicine consumption
- Air-conditioning switches off when windows are opened
- Lights switch off when there is no-one in the room
- Roof top solar panels can be monitored and controlled to ensure optimal operating efficiency
Telecom’s are at an advantage
Other than the central role that Telecom’s play in the customer relationship, they are also in possession of key assets to capture a significant part of the smart home value. Their broadband Internet gateways make Telecom’s the leading players in terms of penetration of households with smart home solutions. The broadband box has become an innovative platform for the connection of various smart devices. Telecom’s also offer interoperable solutions based on open models which support the interconnection of heterogeneous smart home solutions. Other key assets include their sales force, shop network, support capacity and network management capabilities.
The smart home market is still in an embryonic phase and many players are still entering the market. Telecom’s included. For Telecom’s to stay ahead of their competitors and avoid being circumvented, experts suggest that telecom operators form alliances, especially with utilities. Telecom’s should promote hybrid smart home platforms with applications close to their core business and also open to third parties.
Key trends in consumer data should be analyzed carefully as consumers are making various selections based on distinct criteria. It is essential that these preferences are taken in to consideration so that Telecom’s can look forward to continued success in the smart home market. Time should be taken to assess the following before making final decisions on smart-home systems and services:
- Consumer expectations
- Demand for smart-home systems across a wide range of application areas, such as home monitoring and energy management, and system types—including cloud-based remote home control, demand-response and home automation.
- Understanding the desirability of different features
- Understanding acceptability of different price points and attitudes to different business models—like upfront costs vs. subscriber fees
- Customer’s willingness to take part in demand-response programs, based on various incentives
Telecom’s are in the position to assist customers by helping them choose the right smart home devices to suit their specific needs. There are so many products on the market and this often leads to confusion and frustration. This is where the customer can rely on telecom’s to choose cost-effective and quality products. A standardized communications protocol will also help customers to run a smart home where all household devices are interacting and communicating with the telecom.
By using a trusted telecom, the technical difficulty and cost of smart home system installation and maintenance will be carried by the service provider. The provider will also handle the monitoring and reporting for these smart systems.
It is essential for telecom’s to reassure their customers. SaysYves Caseau, Executive Vice President at Bouygues Telecom, France: “It is not enough to sell, we need to demonstrate and ensure that smart home services deliver everyday value.”
According to Arthur D Little, Telecom operators should act now to promote hybrid platforms where they can offer their own solutions, as well as a myriad of external solutions and position themselves as digital life facilitators.
As the market evolves, and as more companies enter the competitive landscape, telephone companies will need to constantly deliver according to their customers’ smart home needs in order to stay ahead of the competition. Familiarity will eventually fade in to the background when competitors start understanding the underlying motivation behind consumer preferences. Alliances with key partners can also strengthen business goals.