Market Insight

Smart Summit London themes: voice control, collaboration and operator innovations

September 29, 2016  | Subscribers Only

Julian Watson Julian Watson Principal Analyst, IoT, IHS Markit

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Several analysts from IHS Technology attended last week’s Smart Summit London, which spanned three streams of presentations, discussions and product demonstrations around Smart HomeSmart Cities and Smart Industrial. Amazon’s Charlie Kindel, Director of Alexa Smart Home, kicked off the liveliest of the three streams, Smart Home, with a demonstration of how the Amazon Echo devices and the Alexa Voice Service gives the human voice power to drive a number of everyday functions, such as play music, get answers to questions about the news and weather, control lights and thermostats and lots more besides.

Speakers across the two days noted the relatively modest adoption of smart home devices and services in Europe compared to the US. A range of players, such as device makers, platform providers, utilities and service providers cited common concerns and barriers to smart device adoption among European households and consumers:

  • the uncertain benefits versus considerable upfront costs;
  • a huge choice of brands and price ranges for smart lights and plugs, thermostats and cameras at both physical and online retailers;
  • the complexity involved in installing smart home devices and getting them to work;
  • concerns about security and privacy;
  • app. fatigue: the need to add and use additional apps to control devices.

The same range of players cited the need for collaboration and partnerships to address these common concerns and overcome barriers to device adoption. Kindel argued that a combination of voice control and an open ecosystem for device makers and developers would be transformational for the smart home industry. Other speakers outlined for the potential for old industries like insurance to build greater trust and loyalty among customers by offering them free or subsidised security devices with new or renewed home insurance policies. Several contributors opined that telecoms operators’ customer relationships, fleet of field engineers and ability to install and integrate customer premises equipment made them an ideal partner.

As is the case in other fluid, disruptive parts of the TMT value chain, like over-the-top (OTT) video and mobile money, Europe’s telecoms operators are pursuing diverse strategies towards the smart home and IoT. A range of factors are shaping their approaches: whether they are present in one or multiple countries, the competitive, regulatory and economic conditions they face, their range and quality of fixed and mobile infrastructure assets, their financial strength and how innovative they are. At the creative end of the scale is Deutsche Telekom, which launched its QIVICON Connected Home platform in Germany in 2013 and has opened it up to utilities and other telecoms operators in Europe (like the Austrian utility eww and the Dutch incumbent telecoms operator KPN) to offer to their own retail customers.

O2 first UK operator to launch a smart home service

At Smart Summit there was more discussion on a different and interesting example of operator innovation: O2 UK’s O2 Home service, which launched earlier this month. This is the first operator-provided smart home service in the UK. The service, which requires customers to have a fixed broadband service from any provider, comes in three options.

  • The security-centric Home View comes with two internal cameras, a presence sensor and an open and close sensor.
  • The energy-centric Home Comfort comes with a tado° thermostat, two smart plugs and a presence sensor.
  • A third more basic service, Home Connect comes with two presence sensors, two open and close sensors and two smart plugs.

Both Home View and Home Comfort cost £30 per month for 24 months and Home Connect costs £20 per month for 24 months. All three plans switch to a much cheaper £10 per month after customers have paid off the cost of the devices. O2 is offering 6 months free to all households on either plan and is allowing customers to buy more devices at an upfront cost through O2.  It is also partnering with the First Utility home energy company: O2 Home customers get two months for free when they sign up to a First Utility energy plan.

O2 UK is eschewing the traditional operator bundling model: its current O2 mobile customers aren’t offered any incentives to take O2 Home. This is because, without a significant fixed offering, O2 has no direct relationship with the main household bill payer. Instead it is seeking to sell into the homes served by BT, Sky, TalkTalk and Virgin Media.

There is a window of opportunity here for O2 to gain traction before its rivals launch their own smart home offerings. But persuading UK households to pay for another monthly subscription fee (on top of voice, broadband, TV, gas and electricity and other services) may be a tough sell. O2’s experience with O2 Home will help its domestic rivals fine-tune their own smart home offerings. O2 Home will also provide useful insight to its parent Telefónica, which is working with Huawei on developing smart home solutions for its Latin American footprint.

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Enterprise & IT
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