The demand for smart home devices is projected to grow steadily over the next few years. Nonetheless, consumers should think carefully before making a purchase due to a trend of manufacturers phasing out “smart” products.
Last week, Google discontinued its Google Nest Secure home security alarm system without warning, though it says the device will continue to work for current owners.
“Google Nest will no longer be producing Nest Secure, however, we will continue to support our security users in all the same ways,” a Google spokesperson said in a statement to The Verge.
Google is the latest in a line of similar moves within the industry.
In May, smart home device maker Wink Labs announced an end to free access to its platform, saying it would begin charging a monthly service fee instead. Outrage from users saw Wink reverse its decision two weeks later, but the company said it would, at some point, require users to pay a subscription fee to offset costs.
That followed Belkin’s announcement in April that it would stop supporting its cloud-enabled Wemo NetCam products on May 29, rendering the devices useless. User anger led the company to extend the device’s life to June 30.
Last November, Best Buy shut down the back-end systems for various smart home devices sold under its Insignia brand. Home improvement chain Lowes in Jan. 2019 shut down its Iris smart home platform and related services effective March 31 that year after failing to find a buyer for the underperforming line.
“Far too often, consumers are left with no choice but to dispose of their now-bricked devices,” Jack Narcotta, senior industry analyst for smart home strategies at Strategy Analytics, told TechNewsWorld.
The economic downturn resulting from the pandemic has impacted global consumer spending on smart home-related devices this year, Narcotta said.
Things will pick up next year, though, and he predicts global consumer spending on these devices “will continue to grow at a 15 percent compound annual growth rate, reaching $88 billion in 2025.”
A Troubling Trend
It does not look good when a smart device manufacturer abandons a product line or bricks its products, but these actions are far from random.
Google abandoned its Nest Secure system apparently as part of a move to bring everything related to smart homes and smart home devices under its wing while expanding into new markets.
Nest devices will be shunted over to home security and automation firm ADT, in which Google will invest $450 million.
“Together we aim to create the next generation of the helpful home — based on new security solutions that will better protect and connect people to their homes and families,” Rishi Chandra, VP and GM, Nest, stated in announcing the tie-in with ADT.
Google will “combine its Nest devices, services and technology with ADT’s leadership position providing security solutions for millions of homes and small businesses in the United States,” Chandra noted. Over time, Nest devices will “become the cornerstone of ADT’s smart home offering.”
The consolidation began when Google announced in May last year that it would end its “Works with Nest” program, which lets people control Nest products through other smart home apps, on Aug. 31, 2019, and transition users to the “Works with Google Assistant” platform.
The fact that Google “can suddenly decide to sunset a cloud API that hundreds of IoT devices have been talking to for less than five years is a bit disturbing,” Jason Perlow wrote in ZDNet. “It means that the idea of mixing and matching products for home automation — the very premise of what IoT and the smart home was supposed to be — is a farce.”
All About the Benjamins
For other smaller smart home device makers or those new to the industry, it was a question of economics. Wink Labs was losing money offering free access to its servers, while Lowes found the smart home device line not as profitable as it had expected.
Manufacturers may, in some cases, be forced to shut down their product lines abruptly because “given how tight margins are in some smart home device segments, most smart home device companies may not know they need to craft an exit strategy until the very last minute,” Strategy Analytics’ Narcotta pointed out.
Still others, like Belkin and Best Buy, may have found that providing cloud-based access for their smart device products was not worth the time, cost, need for technical support, and effort required.
Replacing discontinued smart home devices is not all that difficult or costly, Narcotta remarked. “Just download a new app, connect the new devices to your in-home WiFi, and the only difference may be the logo on the devices. You’re replacing devices that cost $20-25 per unit, not ripping out an entire home security system or HVAC solution.”
True, but these days, with unemployment rising, money tight, and the stress of working from home, consumers are likely to react strongly to anything that makes things more difficult for them, as shown by users’ reactions to the announcements by Wink Labs and Belkin.
Market consolidation “is inevitable, and eventually, most consumers will gravitate towards one of the larger brands, which in time could also become managers of smaller brands,” Narcotta noted.
Amazon will likely follow Google’s lead “with a similar investment, or even acquisition, in the next 8 to 12 months,” he said.
“However, there will always be room for innovators — smaller companies that find a gap to fill in the portfolios of the larger ones.”
Establishing a Common Standard
One of the problems smart device makers currently face is the plethora of different communications standards in the market.
“Bluetooth, Z-Wave, ZigBee, Thread, Propriety, and WiFi all compete to deliver connectivity in a host of smart home devices — often side-by-side in the same device,” ABI Research states. “Each has features and ecosystem drivers that can appeal to specific OEMs, systems providers, and consumers’ requirements.”
Amazon supports the ZigBee in one of its Alexa offerings, while Google Nest leverages its own Thread protocol to communicate within the home to sensors and other devices, but both also rely on WiFi and Bluetooth for their primary functionality, according to ABI Research.
However, in Asia, Bluetooth will increasingly provide connectivity from voice control front-end devices to an array of smart home sensors around the home, leveraging Bluetooth Mesh and fueling additional protocol complexity for an array of smart home sensors.
New and re-engineered wireless protocols will be available to players between 2020 and 2024, and a shift towards a more standardized approach is underway, noted Jonathan Collins, smart home research director at ABI Research. Until then, 802.15.4-based offerings will lead the market.
A more standardized approach could restore the original intent of the Internet of Things — the ability to mix and match home automation products.