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Summary

One of the main themes of the 2017 Consumer Electronics Show (CES) was the increasing integration of interactive audio speakers, such as Amazon Echo and Google Home, into smart home platforms. Although service providers such as AT&T and Vivint began adding voice control to their product offerings early in 2016, every smart home company that Ovum spoke to at this year's show emphasized the importance of voice control. Some have begun eyeing the potential of artificial intelligence (AI) in their offerings as well. In addition, other companies, including Mattel and Lenovo, have developed their own smart speakers, which they hope will present an alternative to Amazon and Google.

Homes are becoming smart and chatty

Consumer adoption remains a key challenge for the smart home market and companies are constantly working out new ways to entice consumers beyond the affluent, tech-savvy, and early adopter segments. The shift toward voice control (and, eventually, AI assistance) forms part of this trend because it promises greater peace of mind in ensuring that systems are turned on when they need to be, and a simpler user interface.

One example of this trend is Vivint's launch of Vivint Sky, an AI assistant designed to help its smart home customers manage their devices and settings. Vivint Sky determines which of four states the house is in (home, at work, asleep, and on vacation) and learns the users' routines. Vivint notes that on average there are 14 sensors and devices in its customers' homes, and Vivint Sky uses data from these devices, mobile devices, and system usage to make recommendations.

Samsung noted that its smart home users typically have a similar number of devices to manage (slightly fewer than 12 per household). Therefore, an intelligent system that can learn from users' preferences will be crucial for all providers, whether or not they offer a full-service offering like Vivint's, or are creating a DIY ecosystem like Samsung's or Apple's.

Meanwhile, Philips Hue noted that voice platforms have proven to be a very "sticky" user interface, in terms of keeping users engaged, and lighting has grown to be one of the biggest uses on Amazon's Alexa platform, ahead of other applications such as music and weather. Security and peace of mind are the biggest use cases that Philips has seen for its lightbulbs, ahead of color changes and entertainment (for example, syncing its smart lights to weather reports or TV shows for notifications or to enhance the show's mood).

Lenovo is launching Smart Assistant, a speaker with Alexa built in, which aims to provide a better sound experience than the Amazon Echo. Mattel is also releasing its own, child-oriented speaker, called Aristotle, which is partly based on Microsoft's Cortana and aims to adapt to children as they get older, helping with homework, learning, and games. However, these devices are unlikely to offer the same ecosystem benefits that Google and Amazon have, such as learning about a user's habits by logging their requests, in Amazon's case. Therefore, the question will be whether voice control without equivalent levels of AI is enough to attract users.

While the companies present at CES all have different strategies to expand their user base and reach the mass market, all agreed that 2017 is likely to be an inflection point for the smart home market, with greater uptake as consumers become more acquainted with the technology.

Appendix

Further reading

Smart Home Case Study: Samsung Opts for Open Approach to Compete with Apple and Google, TE0004-001086 (August 2016)

"Vivint introduces AI support for smart home management," TE0004-001142 (January 2017)

Author

Francesco Radicati, Senior Analyst, Consumer Technology

francesco.radicati@ovum.com

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