Internet of Things
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Telefonica is taking a dual-track approach. At MWC 2018, it launched the Aura digital assistant to support its new customer relationship model based on cognitive intelligence. The operator also confirmed plans to integrate Aura into third-party AI assistants such as Google Assistant and Microsoft's Cortana, to allow customers to interact with Aura through third-party channels such as Facebook Messenger. On the smart home front, Telefonica has unveiled Movistar Home, a new AI-enabled consumer device based on Aura that acts as a hub for Telefonica's multiple services. Initially, this device will focus on enhancing the communications and entertainment experience at home, but the challenge for Telefonica will be integrating this strategy into its current smart security proposition Verisure Hogar, in partnership with Securitas Direct, and embrace other use cases such as energy management and wellbeing.
Amazon has acquired video doorbell company Ring for a reported $1bn. Video doorbells are one of the fastest-growing devices in the smart home space, and Ring has done a great job of going from a start-up to one of the market leaders in this competitive market. Its success largely comes down to ease of installation and use, relatively low cost, and virtual stamps of approval by police forces that the devices help reduce crime. Showing that smart home devices bring real value to consumers has always been a barrier to vendors, but Ring seems to have done a good job of making its value crystal clear. Amazon's acquisition of Ring, therefore, is a good move for the company, but in more ways than one. Yes, Amazon provides scale, which will help Ring further extend its position in the market, but with Amazon's ambition to automate and optimize its home-delivery model, this also represents a means to an end for the company.
Vodafone has become Samsung's exclusive strategic telco partner for smart home services in Europe. In 2017, Vodafone entered the consumer IoT space with the launch of V by Vodafone, following a market strategy 100% based on partnerships with vendors such as Arlo, Alcatel, and Kippy. At MWC 2018, Vodafone announced a strategic partnership with Samsung's SmartThings that will significantly expand its product proposition for the smart home, allowing the operator to gain access to an off-the-shelf ecosystem for connected devices that Samsung has built over the past few years. The challenge for Vodafone will be to show value as a provider of smart home solutions and not merely seem a sales channel of third-party devices in charge of the connectivity layer through V-Sim. For Samsung, this partnership represents a move to recover momentum in the smart home market, especially in Europe, where the company seems to have lost momentum in recent times. Amazon and Google have been aggressive contenders in the race for smart home supremacy, and Samsung needs to gain speed to stay competitive.
Despite being widely available in Windows 10, iPhone, and Android devices in addition to the Harman Kardon Invoke speaker, Cortana has fallen behind other popular voice assistants in terms of skills and integration into third-party smart home devices. However, Microsoft is trying to make progress by expanding the reach of its partner ecosystem. Cortana will now be able to control more smart home solutions from device manufacturers such as Ecobee, Honeywell, LIFX, and TP-Link, and work with IFTTT to offer a new variety of services and use cases. With the same objective in mind, Microsoft has recently announced the upcoming integration of Cortana into other AI assistants such as Amazon's Alexa and Telefonica's Aura. Ovum believes Microsoft is committed to keeping Cortana alive and, assuming it takes a proactive market approach, it will probably prolong its survival in a marketplace that is getting crowded at a fast pace.
SK Telecom was the first telco to launch a dedicated smart home assistant speaker, which it calls Nugu. Other telcos have since followed suit with the aim of enhancing the user experience of telco services and to maintain brand relevance in the home. The perceived value to home assistant speakers, however, can sometimes be limited by the level of intelligence they are able to share with third-party applications and services they are utilizing. The better they are integrated, the more features the speaker will be able to control, and hence the more value it will be perceived to bring. SK Telecom is hoping to use this to launch a new AI-powered music service to go along with its AI powered home speaker. Using technology developed by the same company should create a good user experience, but to be successful it will need to back that up of course with a high-quality music streaming service that can compete with any OTT service on the market.
IoT Investments Tracker: 2H17, IOT001-000009 (February 2018)
Artificial Intelligence Technology and Applications: Ovum Definitions and Taxonomy, INT002-000069 (February 2018)
What to expect from AI today, IT0022-000897 (February 2017)
"Driving consumer revenues through enhanced consumer experience and partnerships,"CES006-000014 (March 2018)
"Apple's HomePod is an AI assistant speaker built for music," CES006-000011 (February 2018)
"Apple plays beauty among geeks in the smart speaker market," CES004-000011 (February 2018)
"MWC 2018 Highlights: Day One," CES004-000014 (February 2018)
"New ARM chip designs herald the democratization of AI," CES004-000013 (February 2018)
Mariana Zamoszczyk, Senior Analyst, Smart Home
Michael Philpott, Senior Practice Leader, Consumer Services
Consumer & Entertainment Services
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