Home Automation

March 10, 2020
The End of Biological Privacy
March 10, 2020

Home Automation

Connected appliances, lights, thermostats, plugs, and other devices can be networked inside a home to automate everyday tasks.

Key Insight 

Connected appliances, lights, thermostats, plugs, and other devices can be networked inside a home to automate everyday tasks.

What You Need To Know

The U.S. market has seen a steady year-over-year growth in home automation products. Security systems and smart speakers account for the largest share of devices sold so far. There are still competing interoperability standards and protocols.

Why It Matters

This is one of the fastest growing sectors of consumer technology in North America.

The Impact

Estimates vary, but researchers forecast that the value of the global smart home market could range between $160 billion and $240 billion by 2025.

Watchlist for section

Amazon, ADT Pulse, Amazon Neighbors App, Amazon Turnkey, Apple, Arlo Ultra, August Home, Bosch Home Connect, Botrista, Brilliant Control, Carnegie Mellon University, Comcast, Connect, Dyson, Ecobee, Ecovacs, Electronic Frontier Foundation, Facebook, Federal Trade Commission, FET Kitchen, FightCamp Gym, Google, Google Home Hub, Google Nest, Honeywell, Huawei, Husqvarna, Hydrow Rower, IBM, Ikea, Innit, iRobot, JaxJox Kettlebell, KitchenAid, Lennar, Logiech, Logitech, Microsoft, Mirror, Nanit, Nest, Peloton, Philips Hue, Rachio, Realogy, Ring, Roku, Samsung, Siemens, SimpliSafe, Sleep Number, SmartThings, Sonos, Tonal, Truveon, Whirlpool, Worx, Wyze, Yeelight, Zigbee Alliance, ZTE.

Deeper Dive

Consolidation in Home Operating Systems

There are lots of smart home devices now available in the market, but increasingly few platforms are capable of connecting them all together. The companies behind those platforms should come as no surprise: Amazon, Apple, and Google. Devices are ubiquitous and increasingly affordable, but the real revenue won’t be from device sales anyway—it will come from the monetization of information captured by those devices in their data-rich domestic environments.

In 2020, speaker manufacturer Sonos sued Google in two federal court systems for patent infringement, but its legal action had less to do with patents and more to do with how Google and Amazon built the smart home infrastructure that companies like Sonos rely on. Back in 2013, Sonos partnered with Google, giving engineers detailed diagrams on how the Sonos systems worked. At the time, Google was not yet making speakers. Three years later Google Home was unveiled, a product that applied a Sonos-like approach to make speakers communicate with each other. Since its launch, Sonos had advertised its speakers on Google and sold them on Amazon, and the company used both ecosystems to reach its customers. When Amazon and Google entered the smart speaker market with cheaper alternatives and far greater potential reach, Sonos sued. Amazon, which sells Echo devices similar to Sonos speakers with multi-room music playing functionality, claims that it hasn’t infringed on Sonos’s technology. Likewise, Google’s defended itself, saying it had been in productive IP conversations with Sonos for several years. The case is analogous to several others brought by smaller tech companies accusing the tech giants of taking their ideas, their technology, and their market share. To be fair, startups show their technology to bigger tech companies all the time for a variety of reasons: to gain access to platforms and device ecosystems, for possible investment or acquisition, and to develop applications for consumers. (Usually agreements are signed beforehand, however, to protect everyone involved.)

New Social Contracts

Every time you open a website, use a social media platform, or access the hundreds of available digital tools and services, you are either explicitly or implicitly agreeing to a company’s legal terms. Nearly all of us scroll to the checkbox and click to agree without reading. Those documents are very, very long and if you didn’t attend law school, they can be confusing and difficult to understand. Researchers at Carnegie Mellon calculated how much time it would take to read all the terms of service, privacy policies, and other legal documents we’re served—they estimated it would take us each approximately 76 business days, reading 8 hours a day, to get through all the paperwork we’re shown in an average year.

And yet people are increasingly concerned about their privacy. As smart home technology becomes more universal, the success of everyone in the ecosystem—home builders, OEMs, platforms, ISPs, and app developers—will depend on the successful management of our data. Building trust in our home automation systems will unlock shared value for businesses. To get there, we will need a new social contract for smart homes and those who live in them.

The Impact

One key development for 2020 is the widespread extension of devices into our homes as the broader consumer electronics market continues to grow. By 2023, we expect one third of the world’s population to own at least one computing device (smartphone, laptop) and to either have access to or own one additional connected device, such as a smart plug, speaker, or pedometer. Today’s devices and those introduced over the next decade promise to give consumers access to bundled entertainment packages, shopping platforms, and other personal services benefits—all of which rely on our personal and behavioral data. 

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