Smart Home Market
Google and Apple are expected to fiercely compete to take the initiative in the global smart home market.
Smart homes where lighting, door lock systems, and temperature are controlled via mobile devices are likely to emerge as the second Internet of Things (IoT) industry after wearable devices. Mobile carriers and handset manufacturers in the nation are being criticized by the fact that they might lose market dominance to tech giants like Google and Apple once again, even though they first came up with the idea of smartphones working with household appliances and smart devices.
According to industry sources on July 2, competition between Google and Apple is likely to heat up in the IoT market, since they are actively seeking to commercialize their smart home-related software platforms showcased at Google I/O 2014 and the WWDC14 during the latter half of this year.
Smart homes means that locks, CCTV, lighting, heating, air conditioners, and energy meters at home can be controlled by mobile devices. More broadly, game consoles and home appliances like TVs and washing machines can be controlled as well.
According to market research firm ABI Research, the global smart home market is expected to be worth about US$6 billion by 2019.
The smart home market is still in its early stages. Thus, Google and Apple are going to launch a new offensive to dominate software platforms prior to hardware platforms.
The search engine giant adopted a strategy aimed at expanding the ecosystem through opening its software platforms. Nest Labs, which was sold to Google for US$3.2 billion in January this year, recently opened its core software platform and started to expand the ecosystem. The home gadget maker thinks that it will be possible for products of various companies like Whirlpool, Mercedes-Benz, and Logitech to be connected to smartphones using the Nest app. In particular, the firm aims to sync with the Google Now app, a voice-activated service, and to make it a major service in the future.
Apple revealed its smart home platform called HomeKit at the WWDC14 last month. HomeKit is also operated in a way that connects various sensors and communication modules at home. The platform does not need a separate app, because it is already inside an operating system. Hence, users can freely use the method through Apple's Siri, the intelligent personal assistant. The company already forged business partnerships with home appliance manufacturers like Haier and Philips, OSRAM, and semiconductor companies such as Texas Instruments and Broadcom. Apple is planning to debut products starting in the latter half of this year.
Experts are saying that Google and Apple's strategy to dominate the smart home market through software platforms has great implications for local carriers and smartphone makers. For example, Samsung Electronics already presented smart homes as one of its important visions in the future at CES 2011, but met with little success. Three local carriers also tried to enter the market without much success.
This phenomenon is largely attributable to the fact that they only focused on connecting mobile telecommunications or devices rather than striving to dominate core standards and platforms. Thus, there is growing concern about the possibility that Korea might see another same mistake that was previously made in the smartphone market. Local companies with advanced mobile telecommunications technology and business development capabilities lost market dominance to Google and Apple, because they lost the power to lead the market.
An official at the Korea Association of Smart Home remarked, “The smart home industry is being expanded in the nation,” adding, “To dominate the global market, global companies like Samsung and LG should cooperate with each other. Moreover, the government ought to provide full support to the industry.”