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Can Major Surgery Rehabilitate DT's Smart Home Platform?

Iain Morris
3/15/2017
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Providing connectivity for household appliances besides phones, computers and TVs has long seemed like an obvious opportunity for telcos. But when it launched its Qivicon platform in 2013, Deutsche Telekom was clearly eyeing a more pivotal role in the "smart home." Having watched Qivicon struggle to make a big impact so far, the German operator is hoping that some invasive surgery will now put a spring in the platform's step.

Under the original offer, customers with the requisite home hub could use smart home gadgetry from a range of Qivicon partners, including heavyweights such as Samsung Electronics Co. Ltd. (Korea: SEC), Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) and Huawei Technologies Co. Ltd. Deutsche Telekom's subscribers could choose from several service packages, but Qivicon was also made available through other providers. Dutch telco incumbent KPN Telecom NV (NYSE: KPN) became a licensee in the Netherlands, while an energy company called EWW launched services in Austria.

Yet Qivicon does not seem to have taken off. Deutsche Telekom AG (NYSE: DT) does not break out details of smart home revenues or customer numbers, and so it is hard to assess the exact impact that Qivicon has had. But it is probably not significant. Fixed network revenues in Germany last year fell 1.5%, to about €9.66 billion ($10.3 billion, at today's exchange rate), while those from broadband and "broadband-centric options" were static, at roughly €4.04 billion ($4.3 billion).

Qivicon progress has certainly looked halting. At first, Deutsche Telekom was able to quickly attract product partners, without which Qivicon would lack much appeal. But it has signed up few since late 2015, leaving it with about 40 in total today.


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Licensees have also been slow to emerge. Besides KPN and EWW, some energy companies in Germany are also offering Qivicon-based services, while a utility called Hitch does so in Norway. But deals in larger European markets have yet to materialize. When UK mobile operator O2 last year said it would offer smart home services based on AT&T Inc. (NYSE: T)'s Digital Life platform, it seemed as if Qivicon had lost out. Only weeks earlier, Holger Knöpke, then head of Qivicon, had been dismissive of US-based competition, arguing that European operators wanted partner providers "in their time zone." (See Is DT's Qivicon in a Quagmire?)

Knöpke, though, is no longer in charge of Qivicon, and new boss Thomas Rockmann is making a big break with the past. Gone is any mention of Qivicon in Deutsche Telekom's latest marketing materials. Instead, the talk is all about "white label" smart home services, as Deutsche Telekom tries to broaden the platform's appeal. Henceforth, partners will be sought not only for new products but also for the applications that smart home customers use.

Importantly, providers can also now integrate the platform with third-party gateways and technologies, including the Alexa digital assistant developed by Amazon.com Inc. (Nasdaq: AMZN). "Needing to have the Qivicon home hub as a separate gateway is a barrier if you want to reach out to the mass market," Rockmann told Light Reading on the sidelines of the recent Mobile World Congress trade show.

Next page: The jury's out

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kq4ym
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kq4ym,
User Rank: Light Sabre
3/27/2017 | 4:57:47 PM
Re: Microwaveable
I still can't see an immediate short term success for the smart home folks. Unless all new buildings automatically include the gear from the start, it's hard to get people to retrofit older buidling as there's not yet that applications that everyone just "has to get now." That would explain why "... Qivicon does not seem to have taken off."
mendyk
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mendyk,
User Rank: Light Sabre
3/19/2017 | 12:50:28 PM
Re: Microwaveable
There's a debate going on now regarding which dystopian novel from the first half of the 20th century is more relevant today, 1984 or Brave New World. A mashup of those two is in order. I agree that we are ceding some claims to privacy -- and some of our humanity -- in this grand digital transformation. I wouldn't blame it all on the kids, though. It's hard to go anywhere without encountering a healthy number of phone zombies, and they come in all ages, shapes, and sizes.
brooks7
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brooks7,
User Rank: Light Sabre
3/19/2017 | 10:01:44 AM
Re: Microwaveable
Dennis,

My point was that the generation that posts everything on Facebook seems little concerned about intrusion.  I wonder what George Orwell would think of them.

seven

 
mendyk
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mendyk,
User Rank: Light Sabre
3/18/2017 | 9:09:06 AM
Re: Microwaveable
Facebook is voluntary submission to intrusion. Not quite the same as having always-on devices that can be turned to a variety of purposes, whether real or imagined.
brooks7
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brooks7,
User Rank: Light Sabre
3/17/2017 | 7:41:26 PM
Re: Microwaveable
Uhhh....Facebook...Intrusion...

seven

 
mendyk
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mendyk,
User Rank: Light Sabre
3/17/2017 | 9:22:58 AM
Re: Microwaveable
At some point, there will be some pushback regarding technology intrusiveness. It's taking a while for people to catch on to the issue, in large part because the intrusive technologies so far (smartphones mainly) deliver more perceived benefiits that negate intrusion issues. Connected cars will be another major test point.
Michelle
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Michelle,
User Rank: Light Sabre
3/16/2017 | 5:54:01 PM
Re: Microwaveable
@mendy I wondered the same. I wouldn't expect the smart home to be all that appealing so early in product lifecycles -- especially in Europe.
jamesjparker
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jamesjparker,
User Rank: Lightning
3/16/2017 | 11:50:23 AM
ARPU?
What did DT charge for a monthly ARPU?
They could have priced themselves out of the market!
mendyk
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50%
mendyk,
User Rank: Light Sabre
3/16/2017 | 10:47:53 AM
Re: Microwaveable
Don't forget the video-enabled microwaves. The Deep State loves those things.
Gabriel Brown
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Gabriel Brown,
User Rank: Light Sabre
3/16/2017 | 10:08:20 AM
Re: Microwaveable
Seems like home security will be the major thing. Video door bells are widely used now (especially if you live in an apartment). Connected security cams are also getting affordable and commensurately popular.

Quite how this maps to multi-room music players, digital assistants, connected toasters, thermostats, and so on, is less clear. 
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