What’s the secret to success in the smart home market?
For many of the leading players in the business, the answer is offering a personal digital assistant, with four of the top-10 competitors selling such a product, according to the Smart Home Vendor Scorecard Report from IHS Markit | Technology, now a part of Informa Tech.
Among the 10 leading smart home vendors, tech giants Amazon, Google, Alibaba and Apple sell digital assistant solutions. Three of these companies—Amazon, Google and Alibaba—placed among the top-four competitors ranked by the Scorecard.
“In the smart home business, companies that offer digital assistants are benefiting from the massive brand recognition associated with these products,” said Blake Kozak principal analyst, smart home and security technology, for IHS Markit | Technology. “High consumer awareness of names like Alexa, Google Home and Siri is giving companies like Amazon, Google and Apple a built-in advantage that may allow them to expand their market share in the future. Amazon and Google have made significant progress creating an ecosystem of devices that is both developer-friendly and has strong sales potential outside of the smart home market.”
In an effort to move beyond the home, Amazon has launched Alexa for Business. Moreover, Ring—a subsidiary of Amazon—launched Ring for Business in August 2019.
The IHS Markit | Technology Smart Home Vendor Scorecard Report ranks market participants based on concrete data and metrics, including vendor market share, solution breadth, regional presence, regional growth and reputation for innovation. This approach eliminates subjectivity and ensures vendors are assessed accurately and fairly.
In the vendor scorecard analysis, companies were evaluated based on objective criteria in terms of market momentum and market presence. Companies were divided into the categories of leaders, established players and challengers.
Based on the scorecard methodology, Xiaomi took the top-spot overall, beating out Google by four-thousandths of a point. In terms of overall market presence and market momentum, Amazon, Google and Xiaomi had a nearly identical score that led all 15 other players.
Challengers in the house
Looking beyond the leading players, the scorecard ranked Ecobee, Arlo and Apple as top challengers.
Ecobee is a smart home challenger due to continued innovation, notably around digital assistants. For instance, Ecobee in June launched an updated Amazon Alexa embedded thermostat to go along with its light switch that was introduced in March 2018. Ecobee also could roll-out new security devices later in 2019 or first half of 2020, a move that will expand the company’s single-solution ecosystem.
Arlo is one of only a few consumer security video camera brands that offers both 4K and high dynamic range (HDR). The company has been moving beyond security cameras to offer its SmartHub product that combines a router with a secure, personal network. The release of SmartHub, along with the company’s plan to release a video doorbell product in late 2019 or early 2020, helped to cement Arlo’s status as a challenger. Despite performing poorly in its stock market debut, Arlo has a strong portfolio that could allow it to take on the smart home leaders.
Apple attained challenger status due to its continued advancements with HomeKit and expanded compatibility with many brands. Although Apple had a slow start, positive developments including improvements in Siri, the rumored introduction of another smart speaker, enhancements to Shortcuts and the addition of SecureVideo will all help propel Apple into smart home leadership.
The IHS Markit Smart Home Vendor Scorecard Report
Hundreds of vendors around the globe make and sell smart home equipment. IHS Markit | Technology selected the 18 top companies to profile in the Smart Home Vendor Scorecard Report: Alibaba, Amazon, Apple, Arlo, Assa Abloy, Belkin, Centrica (Hive), Ecobee, eQ-3, Eve Home, Fibaro, Google, Netatmo, Resideo, Sengled, Signify, Wyze and Xiaomi. The scorecard then analyzed the relative strengths of these vendors based on multiple objective measures.