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

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