Broadband services

Apple Joins Home Automation Wars

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

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