The Future Tech of the Smart Home is here to stay

Thomas Rockmann, Deutsche Telekom

An exclusive article by Thomas Rockmann, VP Connected Home at Deutsche Telekom.

The connected home ecosystem is more vibrant today than ever, having experienced considerable growth over the past few years. Analyst predictions put the global smart home market valuation at around $24.10 billion back in 2016 and this is expected to reach approximately $53.45 billion in 2022, growing at a CAGR of slightly above 14.5% between 2017 and 2022.

Alongside this enormous growth potential has come intense innovation, consolidation and competition that has overall generated a dynamic ecosystem. It is certain that many aspects of these will continue to shape the industry into the future, as well as drive technological improvements. Technology has been the underpinning of the smart home explosion, and it has even created its own social drivers, a good example being home security. A recent analyst report predicts that increasing smart home security adoption will drive global home automation and monitoring revenues from an estimated $12 billion in 2018 to more than $45 billion by 2023, a significant growth rate of more than 260% over the forecast period.

Of course, new technologies have created whole new classes of devices too, such as AI-powered digital assistants in a smart-speaker format. With fierce competition from hardware manufacturers, service providers and retailers alike, the smart speaker space has become one of the most hotly contested technology niches around. There are major benefits coming down the pipe too – by overlaying devices and services from multiple sources, accessed via voice control, consumers are no longer tied to complex technology, but freed up to live their lives. A particularly stark example is in leveraging AI for ambient assisted living (AAL) purposes, where the network of smart speakers in an average home can be activated by the user simply by saying “Emergency”, which triggers a response. If the response is affirmative, then the service sends a pre-configured message to nominated people. The recipients of the message can then “drop in” to activate two-way communication with the speaker – an immediate voice link, enabling the correct help to be delivered as quickly as possible.

Of course, it’s not just about shifting retail units, although that is a concern, but the longer-term aim is to own the customer relationship. In addition to being the name on consumers lips, the fact is that the winners of this race will also garner critical data around smart home device ownership, shopping and media consumption habits and preferences, as well as a host of other data. In short, the prize is considerable.

However, while enterprises are evermore keen to acquire such data, it can prove a double-edge sword, as many have already proved. The General Data Protection Regulation (GDPR) came into force from 25 May 2018 across the EU, and has delivered enhanced protection of consumer data, as well as much-increased punishments for companies flouting the rules. For the worst offenders, the maximum fine for is €20,000,000 or 4% of global annual turnover, whichever is higher, while consumers can now demand rights such as ‘the right to be forgotten’ and ‘data portability’ when closing accounts. Aside from the critical but well-explored concerns over data security there is the bigger issue of data management. While enterprises are familiar with data, and seeing significant benefits as a result of harnessing ‘big data’ flows, the smart home industry has created and will continue to create data in unsurpassed volumes and complexity.

The opportunities and challenges that this new, unstructured data brings are considerable. For example, insurance companies could offer consumers lower premiums and direct support from expert contractors when a leak is detected by smart home sensors, for instance, while smart thermostats linked to weather stations and in-house sensors can not only cut bills, but also provide key usage and price point data when searching for new utility deals.

However, challenges still remain – although a recent survey by NTT Data of 100 insurance carriers, found that 59% “have made strong progress with leveraging smart home technology to improve products”, considerable challenges still clearly remain. Insurers are frustrated with the data requirements around smart home devices, with two-thirds reporting an inability to gain access to data from smart homes, while a further 62% said that using the analytics from that data in the carrier underwriting process is challenging.

The smart home is set to have a significant impact on the car industry too. Voice-activated AI assistants are making their way into thousands of vehicles and Deutsche Telekom’s partnership with Volkswagen, which centres around Volkswagen’s Car-Net App Connect, is an excellent example of this connected car innovation. The integration enables car owners to seamlessly control their Magenta SmartHome, which is based on Deutsche Telekom’s open, white label smart home platform, while away from their home.

Volkswagen drivers can control their Magenta SmartHome directly via their vehicle’s infotainment system. Using the control panel, the driver can activate or turn off pre-set scenarios while driving. For the scenario “coming home”, the lights in the driveway and house entrance would turn on automatically when the vehicle approaches.

Across the spectrum, smart home technologies and developments based on and around them are already changing the way we live. This is a process which is set to accelerate over the coming years, as development intensifies, successes are honed and new partnerships and collaborations are fostered. The future is bright!

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