Why Is Big Tech Working Together With Home Hardware?

Smart home devices are becoming ever more popular. These devices can help you become a lot more efficient in your day to day home lives, but there are still some major teething problems.

Jan. 15, 2020

Recently, Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN) and Google’s parent company Alphabet (NASDAQ: GOOGL) have all partnered up with the Zigbee Alliance, an effort to try and create an ecosystem in which your various smart home devices can work together instead of being fragmented like they currently are.

What is the purpose?

Apple, Amazon, and Google are all competing with one another to get their products into the homes of consumers. However, a lot of people have bought a mix and match of these devices from different companies. 

Therefore, the ecosystem of the home is fragmented, so these rivals must put their differences aside and find a solution. To do so, they need to decide which connectivity methods should be supported. The many different players must constantly update their own respective devices, which can be a pain for both consumers and producers.

However, the “Project Connected Home over IP” plans to create a standard for all of these smart devices. This means that consumers can be confident that a given smart device will work with the other devices they already have in their homes once they see the logo of this project on the packaging  

Plans for this project

Zigbee Alliance is already working with a number of smart device manufacturers, such as IKEA, Samsung SmartThings, Signify and Resideo. The initial focus of this project is on devices designed for home safety, including smoke alarms, smart locks, electrical plugs, HVAC, window shades control and security systems.

After successfully negotiating these types of devices, the project will move to other types of smart devices. The plan is for preliminary open-source materials and a draft specification to be released towards the end of 2020. It is unclear yet which products will be affected by the project.

How much is the industry worth?

According to IDC estimates, home device market growth of 23.5% is expected to be reported from 2019. This equates to roughly 815 million products sold. According to the IDC, this quantity will rise to 1.39 billion devices by 2023. 

MarketWatch reported that the global smart home market was worth $55.65 billion in 2016. This valuation is set to rise to nearly $175 billion by 2025. There is a lot of money up for grabs in this sector, which explains Big Tech’s big interests.

Is this just a data grab?

Considering Big Tech’s track record, consumers are concerned about how these devices will handle their data. There have been regular allegations that the likes of Amazon’s Alexa and Apple’s Siri function have been listening to and recording private conversations.

There are other concerns too. Google’s ‘My Nest’ smart thermostat, for example, has a presence sensor that allows it to know if someone is moving about in a house. Smart lights can gather data such as bed-time, bathroom, and kitchen schedules.

These examples highlight the major concerns of consumers in regards to how these companies use their data.

Is it a lost cause?

As well as concerns about data privacy, there is also the fear of smart home devices getting hacked. This in itself can lead to a whole host of serious issues. However, as time goes on, more and more houses will be fitted with these types of devices. A lot of new home builds now integrate various smart home functions from the outset. 

It is currently hard to measure the extent of the future home’s reliance on smart devices. With Generation X growing up with these products, it seems likely that there will be a gradual shift in direction in the coming decades. People rely on digital technology in so many areas of their lives, so it is a natural evolution as they start to buy homes in the future. 

For more articles about smart home devices read the following:

Apple, Google And Amazon Team Up To Create Smart-Home Standard

Google Gets Sued By Sonos Over Alleged Tech Infringement

Big Tech Is Teaming Up To Listen To Our Secrets

MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.