The news that Apple is set to unveil a software platform to control the objects inside our homes reflects a push by technology companies to completely integrate their products into our everyday lives.
If recent media reports are correct, then Apple will announce its new system at next week’s World Wide Developer conference in San Francisco. In doing so, it will join Google and Microsoft in the quest to dominate the smart home market, a major part of what technology analysts call the ‘Internet of Things’.
As it becomes cheaper and easier for devices to connect to the internet, an increasing number of ‘smart’ household objects can now collect information and share it online with other devices. The ‘smart home’ of the future, where your fridge tells you when the milk is running out, is rapidly becoming a reality.
In February this year Google spent $3.2 billion to buy Nest Labs, a manufacturer of ‘intelligent’ thermostats and smoke detectors which learn patterns of user behavior and program themselves automatically. For years Microsoft has been developing an operating system, revealed last year as ‘HomeOS’, that allows users to manage home networks and control various household devices.
Tech giants Google, Microsoft and now Apple are on course to clash over whose software platform will set the industry standard. The potential profits for the winner are huge, according to Rob Enderle, principal analyst at Enderle Group.
“If your platform is the standard, then all the devices are going to work better with your operating system. It’s one of the stepping stones to having the next permanent platform. It’s like the race to control music or the nearly failed race to control video, whoever gets this will have a significant market advantage,” said Enderle.
Until now the ‘smart home’ market has been dominated by small firms and startups, whose customers have largely been technologically-minded hobbyists. But as the technology giants wade in, independent companies are in danger of being pushed out of the market or taken over. Once such firm is the California-based SmartHome, which has designed and sold systems since 1992 and booked operating revenue of over $18 million in 2012.
CB Insights calculated that venture capital investors had put a total of $468 million into smart home start-ups since 2012. These include the wireless security camera makers Dropcam and Canary, while the UK-based group Evrythng last month raised $7 million in series-A funding. Cisco was one of the investors in Evrythng and the multinational telecom firm predicts up to 50 billion devices could be connected to the Internet by 2020.
Whichever company comes to dominate, they will undoubtedly try to raise the cost for consumers to switch to a rival by integrating their software and products as deeply into households as possible.
While a captive customer may be good for Apple’s shareholders, for consumers this kind of ‘closed’ ecosystem is not always the best result. As we become more reliant on ‘smart’ systems in our lives, we place an increasing amount of trust in the companies that provide them. It is one thing for a device manufacturer like Apple to have this amount of control over our homes, but for a company like Google the privacy concerns become greater.
Aside from these worries, with three of the biggest companies on the planet competing for control of our homes, the pace of innovation, and the number of dollars spent by the big tech players, is set to accelerate sharply in the coming years.
“We’ve been trying to do this since the 1970s,” said Enderle, “but we’re now getting critical mass with these large companies and you’re going to see major changes in the next decade.”