Light Reading
With its new HomeKit home automation platform, Apple is ready to compete with both cable and telecom companies and retail smart home players.

Apple Joins Home Automation Wars

Mari Silbey
6/3/2014
50%
50%

Apple is ready to join the home automation wars. It's staking out a claim that falls somewhere between the cable and telecom companies, which want to sell home automation as a managed service, and the retail brands, which would prefer that consumers take a more do-it-yourself approach to smart home living. (See Betting on Smart Homes.)

At Apple Inc. (Nasdaq: AAPL)'s Worldwide Developers Conference this week, the company introduced HomeKit, a platform for connecting and controlling smart home devices through an iPhone or iPad. Apple is in the process of certifying hardware partners such as Koninklijke Philips Electronics N.V. and Honeywell International Inc. (NYSE: HON), and it plans to position itself as the glue that makes devices like smart light bulbs and connected door locks work together. (See Apple Launches Biggest Changes Since iPhone.)

If the strategy sounds familiar, that's because there are already many other companies working toward the same goal. On the service provider side, cable and telecom operators alike are selling home security and automation bundles in the hopes of generating new revenue from their existing broadband infrastructure.

So far, Icontrol Networks Inc. is the primary platform of choice used by cable companies. On the telco end, AT&T Inc. (NYSE: T) has built its Digital Life service on Cisco technology, and Verizon Communications Inc. (NYSE: VZ) is reportedly ready to jump back into the fray with a new platform provided by GreenWave. (See Cox Bets on Smart Homes in Vegas and GreenWave Crashes Smart Homes.)

On the retail side, the home automation market is coming together in two different ways. Big retail chains are teaming up with platform partners -- like Staples has done with Zonoff for Staples Connect, and Lowes has done with AlertMe for its Iris solution -- while other companies like SmartThings and Revolv are offering their own technology as independent platform providers.

Apple falls somewhere in the middle. On the one hand it looks very similar to other over-the-top retail providers. On the other hand, it has a huge ecosystem in place to enable subscription home automation services in the future if it chooses to do so.

Apple arguably made a strategic mistake when it bet on music downloads rather than subscription streaming services. However, the recent acquisition of the Beats Music streaming radio service looks like an effort to change direction. Why wouldn't Apple consider a similar move in home automation? (See Apple Confirms Beats Buy for $3B.)

Without a doubt, Apple has two major advantages that its smart home rivals can't match: the iOS operating system and hundreds of millions of mobile devices sold worldwide.

— Mari Silbey, special to Light Reading

(9)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/8/2014 | 10:50:10 PM
Re: Great analysis, but
mhhf1ve - Beats has a profitable business, experience making deals with the entertainment industry, and executive leadership Apple wants to bring on board. All of these are good reasons for the acquisition.
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
6/5/2014 | 4:37:14 PM
Re: Great analysis, but
Ok. That makes the Beats acquisition even more puzzling because it's not like Apple needs the Beats music app UI and its small number of users. Maybe Beats has some magic that I'm not aware of? Fashionable design cred? Is that worth multiple billions of dollars?
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/5/2014 | 3:44:47 PM
Re: Great analysis, but
mhhf1ve - "Hmm. Not so sure that streaming services are actually doing so well -- the royalties that need to be paid to the labels could ultimately kill off these streaming services, unless Netflix-like deals can be hammered out with copyright owners."

Good point. OK, let me rephrase my earlier statement: Apple goes into markets where the idea is good, but the user experience is broken. And the user experience for Spotify andother streaming radio is just fine.
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
6/4/2014 | 5:55:38 PM
Overall, though, where is the killer app in home automation?
Home automation isn't exactly a new thing, but it seems to be getting revived. However, I'm not sure where the extra value is coming from? Energy savings from "smart thermostats" is one thing, but... do people really need to be able to turn on lights and close garage doors remotely over the Internet? 
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
6/4/2014 | 5:53:26 PM
Don't discount Google and Nest?
There are more Android devices out there than Apple iOS devices, so if Google can translate Nest products into more general home automation, Google also has a pretty huge ecosystem of connected devices to leverage.

The difference is that Google doesn't make that much money off selling hardware (yet?), and it only dominates in controlling the Android OS. But Microsoft made a lot of money just doing an OS, so Google might pull the same trick, but with embedded/mobile devices and Android.
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
6/4/2014 | 5:50:20 PM
Re: Great analysis, but

Apple specializes in remaking markets that are broken. Spotify and other streaming companies are doing fine. 

Hmm. Not so sure that streaming services are actually doing so well -- the royalties that need to be paid to the labels could ultimately kill off these streaming services, unless Netflix-like deals can be hammered out with copyright owners.

 

Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/3/2014 | 5:39:06 PM
Re: Great analysis, but
Question is whether it's too late for Apple to regain the lead. 

Apple specializes in remaking markets that are broken. Spotify and other streaming companies are doing fine. 
msilbey
50%
50%
msilbey,
User Rank: Blogger
6/3/2014 | 2:15:44 PM
Re: Great analysis, but
Fair enough given that Apple did build the digital music business. You're right that they just held on to the model for too long. 
Mitch Wagner
100%
0%
Mitch Wagner,
User Rank: Lightning
6/3/2014 | 2:02:22 PM
Great analysis, but
Great analysis, Mari! But I have to strongly disagree with this: 

Apple arguably made a strategic mistake when it bet on music downloads rather than subscription streaming services.

iTunes was hugely successful for Apple. It destroyed and rebuilt the music industry in Apple's favor. It's one of the greatest business success stories ever.

Apple's mistake was hanging on to downloads too long. It failed to see that the industry has moved on to streaming now. It's not too late to catch up.  

However, the recent acquisition of the Beats Music streaming radio service looks like an effort to change direction. 

I believe that's exactly what Apple is doing here. I believe Tim Cook was being perfectly straightforward when he laid out the reasons for the acquisition: Acquire a strong, but growing music streaming business; get its smart, successful leadership on the team; and because it's a tactical win -- Beats is already profitable, and that's money that will now go into Apple's pocket. 

It'll be interesting to see whether Apple operates Beats as a separate brand. I think Apple will do that, and that'll be a first for them. The only other time Apple operated a separate brand was Filemaker, and that was another world. 
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Distributed Access Architectures – 2

10|21|14   |   8:51:00 AM   |   (0) comments


ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
LRTV Custom TV
Distributed Access Architectures – 1

10|21|14   |   9:01   |   (0) comments


SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
LRTV Custom TV
The WiFi Road to Riches – 2

10|21|14   |   3:58   |   (0) comments


ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
LRTV Custom TV
Exploring the Future of Cable Access

10|15|14   |   6:23   |   (0) comments


Cisco's Brett Wingo looks at where cable access architectures are heading, discussing the impact of DOCSIS 3.1, CCAP, Remote PHY, SDN, virtualization of cable networks and related technologies.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Forget the Internet, Brace for Skynet
Stephen Saunders, 10/15/2014
HBO Will Go OTT in 2015
Mari Silbey, Independent Technology Editor, 10/15/2014
Google: Carriers & Cloud Providers Need to Cooperate
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/16/2014
Could Data Be the New 'Currency'?
Ray Le Maistre, Editor-in-chief, 10/16/2014
iPad Air 2 Lets Users Switch Carriers Any Time
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/17/2014
Like Us on Facebook
Twitter Feed