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IoT Strategies

Why Charter May Shutter Its Smart Home

Well that didn't take long.

Following multiple rumors that Comcast Corp. (Nasdaq: CMCSA, CMCSK) is about to purchase a large chunk of Icontrol Networks Inc. 's business, news is now emerging that Charter Communications Inc. is "assessing" the IntelligentHome service it acquired via Time Warner Cable and "reducing the focus on sales" while a review is underway.

There are a few parts to this one. DSLReports was the first to share information that service representatives are now being told to stop mentioning IntelligentHome in conversations with customers. According to the source, there have also been "rumblings by managers" that the entire service may be shut down before too long.

Charter has since gone on record with a statement confirming the de-emphasis on IntelligentHome sales, but also pointing out that existing customers "are being fully supported and will continue to be fully supported."

Meanwhile, as a backdrop to the Charter maneuvers, the platform company that powers the IntelligentHome service is about to be divvied up and sold to two different entities. According to reports, Icontrol will sell off its Z-Wave solutions, Piper product line and a handful of patents to Alarm.com Inc. It will then hand over its Zigbee solutions and the majority of its patents, as well as the corporation itself, to Comcast. (See Comcast & Alarm.com Reportedly Eye Icontrol.)

And this is where the problem lies.

Charter has been very deliberate about countering Comcast in the cable market with its own ecosystem of technology and vendors. Charter has a different strategy around content security from Comcast, prioritizes different set-top solutions and is experimenting with virtualized program guides that extend an advanced navigation experience to legacy hardware. (See Meet the New Charter.)

It's quite likely that Charter doesn't want to be beholden to a platform that Comcast controls. Instead, chances are that Charter wants to drive its own smart home destiny; creating its own product roadmap and adjusting development timelines based on its own business objectives.


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Unfortunately for Charter, there is a major downside to dropping the IntelligentHome business. Smart home services are the entry point for cable operators into the world of IoT, and right now, Charter doesn't have an alternative to the one that IntelligentHome provides.

There are other partners that Charter could turn to, including Zonoff and Vivint, but in 2016, it's already late in the game for establishing a smart home brand. By starting from scratch, Charter would potentially be ceding a lot of ground to competitors -- not just other service providers like Comcast and AT&T Inc. (NYSE: T), but also traditional security dealers like ADT Corp. , and retailers selling DIY smart home devices.

There may not be a good option for Charter, but the fact that it's downgrading the IntelligentHome business suggests that the company is leaning toward a rip-and-replace model.

Either that, or Charter is foregoing any presence in the smart home space in the near future. And that would be an odd choice for a broadband service provider today.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

KBode 7/1/2016 | 11:12:11 AM
Re: Revenue I would think incumbent ISPs have a nice advantage here, but again I've yet to see one offer up subscriber numbers, suggesting they're not making much traction either. Gerally a field reserved for those with disposable income, so I imagine the overall number of potential customers may not be that large. And of those, many (I think I would) want companies specifically built for security, not Comcast with its abysmal history of customer service.
kq4ym 6/29/2016 | 4:25:55 PM
Re: Revenue The home security service seems to be getting very competitve with offers now for no contract $20 a month or so monitoring. One wonders just where that market will go and internet monitoring may become so cheap there's little profit for the little guys.
KBode 6/24/2016 | 11:29:42 AM
Re: Revenue I actually think that's the smarter bet for Charter. Consumers are already annoyed with how much they pay for triple play services, and again -- I think the smart consumer's probably better served by security system experts on the security front, and by building their own ad-hoc solutions on the automation side.
kq4ym 6/23/2016 | 4:33:38 PM
Re: Revenue Maybe Charter is not convinced there's going to be profit in the IoT market anytime soon and it's best to get out of the smart home market. It's still unclear just what's going to be a winning product or service in the home market it seems to me.
KBode 6/22/2016 | 4:45:28 PM
Re: Revenue Charter doesn't offer their own security service, so I think people that paid $700 for gear will be out of luck down the line one way or another. 
KBode 6/22/2016 | 4:44:47 PM
Re: Revenue I've yet to see an ISP break out its subscriber numbers or earnings for such services, suggesting the money being made isn't much to write home about. 
Mitch Wagner 6/17/2016 | 3:43:49 PM
Re: Revenue To danielcawrey's point: What services is Charter offering here? Are they services consumers would actually care about enough to pay for?
mrobuck 6/16/2016 | 5:21:19 PM
Re: Revenue As Mari wrote, there are a lot of players in this space across service providers, traditional security companies and large retail chains. It was a suprise to me to read this since TWC put a lot of effort into its home automation & security service. 
danielcawrey 6/16/2016 | 4:27:00 PM
Revenue One would think smart home services would be a great money maker. I just wonder if the generation of home owners with the disposable income to spend on this really care about something like this. They may not really want to change the way the basic things in their home works if they already operate just fine. 
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