Last month, Molly Wood of Marketplace Tech reported on her podcast a great many things from CES. One of them was about the glut of smart home gadgets showcased. While that was exciting in and of itself, her point wasn’t so much about the number of smart thingies you could buy very soon but rather the issue of who was going to own the integration and centralized control of them.
I want to pause on that short comment at the end of Molly’s podcast. It has stayed with me for the better part of the last month. Having only recently begun my own smart home build, I’ve thought about the comment and what it means every day since.
Which big tech company’s hub are you going to let to stand as Command Central of your smart home? Amazon Echo? Google Home? Apple HomeKit?
Emblematic of the brewing war over your home’s Command Central was Apple’s announcement at CES that it has opened development for HomeKit-compatible smart home products. Apple doesn’t want to create kitchen and bathroom smart appliances. Kohler can do that. And, Philips can create smart lighting. Belkin Wemo can provide the smart outlets and switches. Nest can cover the smart security, video surveillance, and your temperature and smoke sensors. The important thing is that they are all controlled by a single hub on Apple’s HomeKit platform.
But, is Apple late to the game? For five-plus years, Amazon Echo and its fast-follower Google Home have allowed development of all kinds of third-party smart home products that work with their centralized hub. Smart home products come with “Works with Alexa” or “Works with Google Assistant” certification badges so you can build your smart home network with the confidence of easy integration, compatibility, and functionality. That is as long as it’s connected to the One Hub to Rule Them All.
Command Central by the Numbers (Psst, Amazon’s Killing It)
I’m so intrigued by this looming war that I decided to take the pulse of 200 U.S. residents about their smart home hub decision (North America represented 83% of the 2017 global market for smart speakers). Eight in ten of the people who have smart home devices today control them from a single central voice-enabled hub, and the current winner for Command Central is Alexa on Amazon Echo, by 12 points. Next, is Google Assistant at 33%. Then, it’s Siri on Apple HomeKit at 15%. Should I even mention Bixby through Samsung Smart Things Hub (7%)?
Maru/Usurv survey, N=200 U.S. residents, January 30, 2019
In September 2018, Amazon’s smart speaker U.S. installed base market share was 65%. For a quick comparison, Google was 20%, Apple 5%, and other 11% (Amazon Maintains Smart Speaker Market Share Lead, Apple Rises Slightly to 4.5%). For my survey, Google’s and Apple’s numbers are bigger, representing more people choosing to control all their smart devices from a single hub, Google Home or Apple HomeKit. Does the word “Home” in their product’s name have something to do with it? (Next survey.)
The Prize? Your Data
One part of the data raised my eyebrow. There was a small group of smart home product owners who currently use their smartphone or a universal remote to control their smart home products and who prefer not to use voice assistants at all. Now, I’ve done a fair amount of qualitative research on technology product innovation around the world over the last decade, and I’ve chatted with hundreds of people about voice assistant technology. If I can be reductive for a minute, these people fall into two camps: One is made up of those for whom the cool factor and convenience of voice assistants outweigh any squeamishness about gremlins listening to and recording things they say, amassing data to be used however owner of said voice assistant wants (Amazon, Google, etc.). The other is composed of those for whom privacy is sacrosanct, and they will not ever have an Internet-enabled speaker-mic set anywhere in their house.
Make no mistake too. The fundamental issue in the war over your smart home Command Central is the war over your data – all of it. And, your fun, new smart home is the quintessential battleground.
Apple certainly doesn’t want anything to do with the scandals of late, painting Facebook and Google as unethical data bandits. Tim Cook has been unabashedly critical of companies who act like people’s homes and offices are the Wild West of data mining through smart devices that passively gather all kinds of potentially sensitive information without regulation. Apple’s revocation of developer privileges from Facebook, citing its research app violated Apple policies, is just one recent example.
So, maybe Apple isn’t too late to the game. While Apple may be opening up their smart technology to third-party developers later than competitors, its requirement of manufacturers to follow stringent guidelines – promising strong security for HomeKit-compatible smart products in combination with Apple’s belief that “privacy is a fundamental human right” – may attract nascent and hesitant voice-assistant users. Unfortunately, these users don’t account for many …in the United States.
International Skirmishes: Consumer Data Protection v. Protectionism
Outside the United States, different societal dispositions towards Internet-based privacy and security have impacted legislation and may confound consideration for smart speakers, especially in the European Union. The linchpin of the EU’s General Data Protection Regulation is control over how personal data is used, which for the EU boils down to user consent and how it’s established. The punishment for companies like Facebook and Google for non-compliance and breaches is supposedly tougher fines. If the latest fine levied against Google by the EU – a record $5BN USD for Android antitrust and nothing to do with violating GDPR – is any indication of legislative toughness, I wouldn’t hold my breath for any significant change in data-gathering behavior by tech giants. Alphabet whose principal business is Google still raked in over $9BN USD net profit in the same quarter the fine was imposed.
Protection, schmrotection. Smart speaker adoption is forecasted to increase in Europe by a whopping 189% between 2019 and 2022, perhaps paradoxically owing to an increase in consumer confidence in smart technology precisely because of GDPR. Increases in North America and Asia are 42% and 151% respectively – even though North America’s absolute number of smart speakers will be nearly twice that of Europe or Asia Pacific by 2022.
Speaking of Asia, the China context complicates societal, market, and product comparisons. Since Google is functionally blocked from doing business in China, its second-place status is irrelevant, giving Alibaba’s Tmall Genie X1 and Xiaomi’s Mi AI smart speakers an unfair advantage in the China market. The legislative context is even more challenging. Laws to protect privacy and security are vague and interpreted contextually to give the upper hand to government surveillance, ostensibly watching out for illegal sharing of state secrets and “all ‘other matters that are classified as state secrets by the national State Secrets Bureau,’ with no limitation on what those matters might in fact be.” So, the State wins?
The Battle Rages On
The answer to Molly’s question about who will be the One Hub to Rule Them All continues to be elusive and influenced by growing consumer interest in smart home technology, consumer experiences of the usefulness of smart speakers, and manufacturers’ interest in the potential of the smart home market. At this moment in time, however, the answer seems like a simple case of who was first to market, and Amazon will hold on to its reign as King Command Central.
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