Despite Bullish Predictions, Smart Home Tech Still Not There Yet

Carl Weinschenk
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Here is a bit of discordant news: While projections say that smart homes are the wave of the future, Verizon Communications has pulled back on its service.

GreenTechGrid cited news reports from October that the carrier’s Home Monitoring and Control service was no longer available (though existing customers still would be supported). The story said that a Verizon spokesperson has confirmed the move.

Smart home isn’t flagging, of course. Instead of Verizon’s move being a sign that the company is bypassing the market, the news is a sign that the sector is moving quickly and Verizon wants to make sure that it is moving prudently:

Verizon is likely shopping for a new platform, perhaps one that is less DIY-focused. Also, Verizon's original platform did not actually offer an alarm monitoring service, as other offerings like Comcast's Xfinity Home do. Verizon's first platform also used a Z-Wave communications protocol, whereas most competitors have chosen ZigBee or Wi-Fi.

Bullish predictions abound in this sector. This week, Venture Beat reported on a study by Juniper Research that suggests that the smart house segment will make large gains in terms of revenue. The report says that revenue jumped from $25 billion in 2012 to $33 billion last year and will reach $71 billion in 2018.

A problem exists on the home front, however: The story cites an earlier Allied Market Research report that values the market at a far more modest $4.8 billion (the report was published in 2012, but the story doesn’t specify to which year the estimate refers). The writer points out that the disparity is due to the fact that the two companies define smart house far differently.

Thus, the Verizon decision and the huge gap between the studies stem from the same thing: The lack of a clear vision of the smart house segment.

A third level of uncertainty in the smart home market, after the interrelated topics of what it includes and how much it is worth, is the very basic question of how it will work. The Verge has a long story that makes the point that the appliances within smart homes are unable to do an important thing: Exchange data. The image is clever: Writer Jacob Kastrenakes suggests that the dream is the world of the Jetsons but that we still are living in Bedrock.

As often is the case, the problem is communications, according to Kastrenakes:

Right now, there are two names at the forefront of standardizing the connected home: ZigBee and Z-Wave. Both are composed of similar wireless networking technologies, and both include languages that allow devices to share select information — such as temperature or whether a light is turned on or off — over their wireless networks. But while each technology has hundreds of products already supporting it, few of those are from major appliance manufacturers, and the modern smart home won't get much smarter until the biggest names all agree on speaking the same language.

Obviously a lot must happen and there will be challenges to getting there. The bottom line, however, is fairly straightforward: The market will continue to be fragmented and disconnected (no pun intended) until standards are developed.

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