The Early Smart Home Pioneers

In the summer of 1892, Nikola Tesla’s demonstration of remote control and wireless communication at the Madison Square Garden Electric Appliances Exhibition was the birth of a new era – the smart home. Little did Tesla know that his groundbreaking demonstration would set a journey through time and technology in motion, culminating in the modern smart homes we now enjoy.

The late 20th century saw small steps toward realizing the smart home. In the 1970s, before wireless technologies, the X10 protocol enabled rudimentary remote control of lights and appliances. However, X10 systems were complex, required loads of wires, and were limited in functionality. The 1980s introduced more advanced home automation systems, but high costs and complexity still limited their adoption. Remember, this was still 20 years before WiFi and IoT, the pillar technologies of today’s smart homes.

Enter the 2000s

The early 2000s marked a turning point with the entry of the first smart home innovators like Savant, Crestron, and Control4. These innovators molded the smart home landscape by offering integrated systems that unified home controls under one interface. A centralized console could now manage lighting, audio, video, security, and climate, albeit with bundles of cables, and at a premium price.

Savant was founded in 2005 and is a privately held company. Savant focuses on luxury homes, providing high-end smart home solutions. Crestron Electronics, established in 1971, is a privately held company. Crestron expanded its reach in the 2000s by introducing integrated smart home control systems. Control4, founded in 2003, IPOed on August 2, 2013. In August 2019, Control4 merged with SnapAV and was rebranded as SnapOne. Today, the Controle4 product line is SnapOne’s luxury smart home offering. 

The Tech Giants Disrupt The Smart Home Market

The 2010s witnessed the entry of the tech giants Amazon, Apple, and Google, heralding a new era of fierce competition and mass-market smart home adoption. 

• Amazon: In 2014, Amazon introduced the Echo smart speaker powered by the Alexa voice assistant. Alexa’s open platform quickly gained developer support, expanding its capabilities. Amazon acquired Ring in 2018, bolstering its smart security portfolio. Ring went public in 2019. As of 2021, Amazon holds around 30% of the smart speaker market share. It’s worth noting that as of July 2023, amazon.com accounted for 37.8 percent of the US e-commerce market, with the number two, Walmat, at a distant 6.3%. Amazon’s e-commerce dominance helps to bolster Amazon’s smart home market share.
• Apple: Apple introduced HomeKit in 2014, emphasizing security and privacy. By 2017, it partnered with leading manufacturers of HomeKit-enabled smart home devices. Acquisitions like Topsy Labs in 2013 and Shazam in 2018 contributed to Apple’s smart home ecosystem. Apple’s HomeKit has captured approximately 10% of the smart home ecosystem market share.
• Google: Google’s 2014 acquisition of Nest Labs signaled its entry into the smart home market. Nest’s learning thermostats and cameras introduced AI-driven insights. Google later merged Nest back into its hardware division. Google’s smart home ecosystem, including Google Assistant, holds around 25% of the market share, bolstered by its integration into Android devices and widespread adoption.

Smart Home Investments and Acquisitions (Amazon, Apple, Google)

In today’s era of fierce competition and mass-market smart home adoption, the tech giant’s massive investment in smart home sales, technologies, and ecosystem integrations has produced market-leading, affordable smart home solutions that now dominate the market.

The tech giants’ strategic investments and acquisitions played a pivotal role in shaping the smart home landscape.

• Amazon: Acquiring Ring and Blink bolstered Amazon’s security offerings. Its acquisition of Eero in 2019 extended its reach into WiFi mesh systems, enhancing connectivity. 
• Apple: Investments in HomeKit-certified devices enhanced Apple’s ecosystem. Its 2018 acquisition of Shazam extended voice recognition capabilities.
• Google: Apart from Nest, Google’s acquisition of Fitbit in 2019 expanded its smart home and wearables portfolio.

A Functional Breakdown of Modern Smart Homes

Modern smart homes are characterized by their multifunctional capabilities, built around various aspects of daily living. Here’s a breakdown of some key functions:

• Wi-Fi Connectivity: The backbone of any smart home, reliable Wi-Fi ensures reliable communication between devices and centralized control.
• Smart Security: Smart security systems incorporate cameras, motion detectors, doorbell cameras, and door and window sensors, allowing homeowners to secure and monitor their property at home or remotely with real-time video streams and alerts.
• Smart Lighting and Shades: Smart lighting systems enable personalized lighting scenes, like a bedtime scene, which turns all the lights off, or a wakeup scene that turns on your night light, while smart shades enhance privacy and regulate natural light by automating opening and closing shades based on the time of day, or weather.
• Smart Climate Control: Smart thermostats adapt to users’ schedules and preferences, optimizing energy usage and maintaining a comfortable environment.
• Smart Entertainment: Integrated audio and video systems provide a home theater experience, with voice commands or smartphone apps as remote controls.
• Smart Plumbing: Smart water monitoring and shutoff systems reduce the risk of water leaks and expensive water damage while providing water usage statistics and water conservation analytics.
• Voice Control: Voice assistants like Amazon Alexa, Apple Siri, and Google Assistant enable hands-free control of smart home devices and functions. The latest releases of voice assistants include smart hub and mesh technologies, cameras, microphones, touch screens, and built-in sensors that allow us to consolidate our smart home portfolio. 

New Construction vs. Retrofit Smart Homes

Two primary categories exist in smart homes: new construction and retrofit installations. New construction smart homes are integrated into each home’s design and build process, incorporating smart technologies as a default feature. This integration often involves partnerships between smart home vendors and home builders. Savant, Crestron, and Control4 initially forged alliances with builders to create turnkey smart home packages. The tech giants have followed suit, with many home builders electing to package their solutions as a more affordable consumer electronics alternative to the proprietary Savant, Crestron, and Control4 solutions. These partnerships ensure that the latest technologies are integrated into the home’s core infrastructure.

On the other hand, retrofitting smart homes involves upgrading existing properties with smart home technologies. Here, the tech giants play a significant role. Amazon, Apple, and Google offer wireless consumer-electronics systems that can be easily added to new and existing homes without extensive renovation, such as opening walls and installing wires. The tech giants leverage their widespread distribution networks, such as amazon.com, Apple, and retail outlets, to make smart home technology accessible to a broader audience.

Smart Home Installation Options

The growth of the smart home market has led to various installation options catering to diverse preferences:

• Luxury Vendors: Luxury vendors like Savant, Crestron, and Control4 offer whole-home solutions, including the equipment and installations by their value-added resellers (VARs). VARs are trained and certified by the vendors, which ensures that VARs meet vendor standards. VARs often start as small family businesses with great customer support; many grow with new locations or go national over time. While the Luxury vendors often cater to new construction or stud-out remodels, they also offer retrofit solutions. Pricing for new construction, stud-out, and retrofit installations ranges from $25,000 for a small condo to $500,000 and more for big homes. The price depends on the project scope and the extent of the smart home portfolio.
  
  • Pros
    • Integrated whole-home solutions, including the equipment and installation from a single VAR.
    • VARs are positioned to create a high-quality product for customers with great support.
  • Cons
    • Purchasing from VARs increases costs because VARs resell vendor products and mark-up pricing. 
    • Luxury proprietary technologies with VAR ecosystems result in vendor and ecosystem lock-in and higher prices.
      
• Retail Outlets and On-demand Tech Support Installations: Big retail outlets like Amazon, Apple, Cosco, and Best Buy sell a comprehensive portfolio of DIY smart home technologies and appliances. For example, Best Buy’s Geek Squad and many other on-demand tech support companies offer repair, installation, and set-up services for retail furniture, appliances, Wi-Fi, computers, tablets, appliances, TVs, home theaters, car electronics, smartphones, cameras, audio systems, video games, and smart home technologies. Consumers can purchase smart home technologies from a retail outlet and schedule on-demand installation services in-store or online. On-demand tech support installation services for smart home devices range from $70 to $450 per device. Unlike the Luxury VARs, on-demand tech support companies do not specialize in smart home system design and installations; they install lots of other stuff, nor do they have mandatory smart home training and certifications. The quality of on-demand smart home service and support is location-dependent. If the location does substantial smart home installations, you might get an experienced in-house installer or an unqualified gig worker; it’s a roll of the dice. Many on-demand tech support companies are large national organizations with big business customer support practices using automated phone systems, long wait times, and dropped calls.
  
  • Pros
    • Equipment sales and installation scheduling in-store or online.
  • Cons
    • On-demand support companies install so many different products and technologies you never know if you’ll get an experienced, smart home installer or a first-time gig worker. 
    • You will likely need multiple vendors for a whole-home installation, i.e., an on-demand service for your retail products, and contractors for smart electrical, plumbing, HVAC technologies, patching, and paint.
      
• Boutique Smart Home Installation Services: Boutique smart home installers come in many shapes and sizes with diverse backgrounds and experience. Boutique smart home installers are contractors, audio-visual installers, technologists, VARs, and more with a high degree of expertise in specialized domains. For example, some may specialize in one or more domains, while others are multi-faceted. What they all have in common is unique expertise in their domain(s).
  
  • Pros
    • In theory, they are unbiased.
    • Construction experience to ensure rough installations and electrical, HVAC, and plumbing products are installed properly. 
    • Specialization in various smart home ecosystems and technologies.
  • Cons
    • You may need multiple vendors for a whole-home installation, i.e., a boutique vendor for your smart home technologies and one or more contractors for smart electrical, plumbing, HVAC technologies, patching, and paint.
      
• DIY with Online Guides: Do-it-yourself (DIY) installation is an option for tech-savvy homeowners. YouTube, bloggers, and manufacturers provide guides for self-installation. The DIY approach can save installation costs but requires technical know-how and a lot of your time.
  • Pros
    • Save lots of money!
  • Cons
    • You will need to invest lots of your time!

Standardization, Vendor Lock-in, and the Emergence of Matter

Historically, vendor lock-in and the need for standards have challenged smart home adoption. Various vendors introduced proprietary technologies and communication standards, leading to vendor lock-in and cross-vendor compatibility challenges. Integrating smart devices from different market-leading manufacturers often requires complex workarounds or, by design, simply will not work. For example, the smart home platforms from Amazon, Apple, and Google do not interoperate by design, forcing you to decide on a single platform and ecosystem. 

The Introduction of the Matter protocol (formerly Project CHIP) in 2019 marked a good step toward smart home standardization. Matter aims to create a unified, secure, and reliable standard for smart home devices, allowing different devices to communicate seamlessly regardless of the manufacturer. Matter’s support by industry giants like Amazon, Apple, and Google may help to overcome the historical fragmentation from vendor lock-in.

Matter may be a game changer, but history has shown us how tech giants and market leaders battled not only for market dominance but also for the allegiance of consumers and businesses with proprietary ecosystems. For example, the epic technological rivalry between Apple, Microsoft, and Sun Microsystems showed how each company employed distinct strategies to safeguard its technological domain while avoiding industry standards that could undermine its dominance. Again, Amazon, Apple, and Google smart home platforms do not interoperate by design, forcing you to decide on a single platform and ecosystem. Historically, standardization is great for consumers but not so much for market leaders. Only time will tell the impact of Matter. 

In conclusion

As market shares shift, the future of smart homes promises even more accessibility, convenience, innovation, and lower costs for homeowners. Various installation options empower consumers to tailor their smart home experiences to their preferences, budgets, and technological comfort levels. The ongoing development of standards like Matter holds the potential to standardize smart home ecosystems by making interoperability a cornerstone of smart home technology.

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