Telco providers face both an opportunity and a threat when it comes to the growth of the smart homes market: communications providers can help drive the growth of smart home adoption by accelerating their non-telco strategies (that is, building smart home offerings alongside their traditional offerings) or they face the risk of being relegated as marginal players.
The threat is real: recently, most communication service providers (CSPs) have been outperformed by aggressive competition and are now at a crucial stage, according to a report from ABI Research. “CSPs are being threatened in a market increasingly driven by the likes of Google and Amazon with a range of products and services from AI-powered smart home voice control smart speakers to security solutions,” says Pablo Tomasi, a senior analyst at ABI Research. “But things are changing and CSPs are accelerating their strategies for the smart home.”
Some of the CSP players with smart phone products referenced by Tomasi include:
- Telefonica with Aura
- Orange with Djingo
- SK Telecom with Nugu
These CSPs are developing AI assistant to support their smart home play, Tomasi says. “Now is the time for CSPs to be more aggressive in tying the usage of their AI assistants to their other connected and smart home offerings.”
The ‘Platform’ Approach to the Smart Homes Market
To win the smart home, CSPs must take a “platform” approach – that is, a strategy that is supported by the creation of a wide partner ecosystem and underpinned by an innovative monetization approach favoring freemium services over traditional bundles, the report states. Deutsche Telekom and Comcast are two of the leading CSPs in this space.
CSPs have assets all around the connected home from providing connectivity, creating content and delivering video, to specific applications such as monitored security – and as such, they have a wider reach than any other competitor, according to ABI. CSPs should use this mix of essential (e.g., broadband connectivity) and value-added services (e.g., monitored security) to tailor a strategy fine-tuned to customers’ needs and regional dynamics.
“CSPs should not impose their legacy fixed-line business model to the smart home,” Tomasi stated.
“The smart home is core to the CSPs’ future and it is a real test to assess how far CSPs have developed their business beyond their telco heritage and how they can adapt their bundling business to market condition, experiment with innovation, and compete head-to-head with webscale players,” he concluded.
The smart homes systems market is set for phenomenal growth through 2023, says HTF Market Intelligence. Top players in the market, according to HTF, are ADT, Honeywell, Vivint, Nortek, Crestron, Lutron, Leviton, Comcast, ABB, Acuity Brands, Alarm.com, Control4, Schneider Electric, Time Warner Cable, Siemens AG, Sony, Savant, Nest, AMX and Legrand.