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Summary

On December 12, Orange introduced a set of new products and services for the smart home as part of its annual Hello Show in Paris. AI assistants, connected devices, and smart security services were highlighted as key elements of Orange's vision for the smart home. The long-awaited relaunch of its smart home strategy made it clear that the operator not only had to make progress on the technology front but also had to rethink its business model to have a chance in the race for the smart home.

AI assistants, connected devices, and professional security services outline Orange's new vision for the digital home

The smart home has been a market segment that Orange has been keen to capitalize on within the IoT industry. However, as most broadband service providers are finding, creating an attractive proposition for the smart home is not an easy task.

In 2014, the operator launched a proprietary connected home service in France known as Homelive that was discontinued in 2017. The solution not only required customers to pay upfront for the equipment, including the Homelive smart bridge to connect all devices, but also required a monthly subscription fee to access services such as SMS alerts, one-month data backup, and 24/7 dedicated technical support. Homelive's poor market reception, together with the fact that the smart bridge was noncompliant with new M2M SIM card regulations, made Orange pause and rethink its smart home strategy for the French market. In the meantime, Orange continued to invest in its connected home proposition outside France, launching during 2017 new smart security services in Spain and Luxembourg in partnership with Tyco and G4S respectively.

2019 will mark a new phase in Orange's vision for the digital home. On the AI front, the new Djingo smart speaker, with integrated Amazon Alexa, will become Orange's main controller for the smart home. Orange's proprietary AI assistant Djingo will offer an interface for customers to access Orange products and services such as Orange TV and the new "connected home" service, while Alexa will be in charge of enhancing the overall smart living experience with its numerous skills and its fast-growing partner ecosystem.

The new smart speaker won't be alone in the crusade for the smart home though. To speed up the transition to the IoT universe and secure interoperability among all connected devices, Orange's broadband wireless router, Livebox, will become the new smart home gateway after a software update programmed for 1Q19. The new Livebox will allow customers to control Orange-branded connected devices as well as those from third-party vendors such as Signify (Philips Hue), D-Link, Bosch, and Netatmo. By bundling its new connected home service into the router, Orange will eliminate the need for a separate smart bridge, overcoming one important entry barrier its predecessor Homelive had. Most importantly, the new service won't require an additional subscription fee either, enabling users to control their smart devices via voice or app (on smartphone or TV screen) at no extra cost.

For customers willing to pay extra for value-added security services, Orange will launch its new Protected Home service in partnership with Groupama. This remote surveillance service will rely on connected devices to trigger alerts and call for professional support when necessary. According to Ovum's recent Digital Consumer Insights 2018 survey, only 17% of respondents in France have a professional connected home alarm that alerts the police in case of a break-in. This means that there is still plenty of room for growth in this market if Orange can get its strategy right. Home security is a challenging market though, and Orange will need to show clear differentiation. Integrating its new Djingo smart speaker into the smart security equation is its first step.

Appendix

Further reading

Digital Consumer Insights 2018: Smart Living, PT0147-000003 (November 2018)

Author

Mariana Zamoszczyk, Senior Analyst, Consumer Services

mariana.zamoszczyk@ovum.com

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