Apple's Rumored Home Automation Solution is Already in Most Homes

[Note: Sorry for the duplicate post, I really didn't like that first title.]

News broke (subscription required) over the holiday weekend that Apple is rumored to announce a home automation solution and/or platform at WWDC this year. Of course, rumors like this are to be taken with a grain of salt, but John Gruber's reply of "I’m pretty excited for next week." is classic Gruber-speak (albeit not a sure thing) for "this is happening."

So why does Apple have a shot at this working? How do they possibly expect to release a platform for the home when they're so notorious for closed ecosystems? Surely everyone can't afford to outfit their entire home in Apple products. This is only speculation, but here's how I think Apple can easily capitalize on this opportunity.

Framework is in Place

I've pointed this out before, but it is worth highlighting again. Apple is exceptionally good at putting a framework in place over the course of years without anyone giving it too much attention, then they drop a bomb of an announcement and suddenly everyone realizes the framework is in place already. Competitors have a hard time catching up because that framework takes years to build. Their iBeacon strategy is exactly that, though I don't think we've seen the bombshell of how it'll be utilized yet.

One big hurdle for home automation is cost. There is always a hub that must act as a brain for the whole thing, and that hub is usually quite expensive. Apple has this problem solved already with at least one iOS device in hundreds of millions of homes across the world. There is some concern for whether or not those devices stay within the home (or even need to) to keep the smart home products working, but that doesn't seem like a hard problem to solve with devices being connected so much of the time now.

With this infrastructure, Apple already has the app distribution system in place, the payment solution in place, the third party relationships in place, and the biggest monetary investment from the customer's perspective has already been made. It also doesn't hurt that Apple's solution here is supported by their vested interest in user privacy. Apple has already made their money from the customer, they don't need to sell user data; in fact they're highly motivated to keep that data as safe as possible to keep customers happy - this solves one of the major potential road blocks I highlighted in my piece "The Trouble with the Internet of Things."

Closed Yet Open 

Apple has very tight rules on how you can play in their ecosystem. They've also drawn some very controversial lines in the sand related to things like customization, inter-app data sharing, and plenty more. However, they're also smart. They know that they can't do everything themselves, they saw that when they announced the App Store, and surely they see it with a smart home solution. Apple makes a hell of  a platform for both users and developers.

Apple doesn't have to make any new hardware for this home automation solution. That's pretty insane if you think about it. It also gives them a massive head start (except against Google, more on that later). All they have to do is enable third parties to make products that adhere to the rules and use the APIs that Apple creates.

What better time to announce these new APIs than at WWDC? With some choice hardware partners they'll have a modest set of "solutions" available on the day that iOS 8 ships to the public this fall. All a user has to do is update their iPhone or iPad and buy a couple of accessories and their home is suddenly connected. We aren't too far from this right now with Lockitron and others, but I think by Apple taking on the infrastructure costs (servers, security, APIs, etc.) we can drive the third party prices down to more reasonable levels for a wider market.

Perfectly Apple

This sounds perfectly Apple to me. The hints have been there for years. The market is very large. The platform is already in place with the up-front costs largely already behind us. Third parties and customers both need a stable and universal platform to enable the "smart home" dream, and that's been really hard for any one company to provide. Apple is positioned perfectly, their reputation for respecting user privacy is in place, their reputation for stability and ease of use is strong. I'd be more surprised if this doesn't happen than if it does. 

As an aside, the connected home dream is largely why Google purchased Nest. I expect to see offerings from them very soon as well, much sooner if Apple announces theirs next week. It'll be interesting to see how the two approaches to solving this sell and grow.

Apple's Rumored Home Automation Solution is Already In Most Homes

[Update: Changed title to better reflect the article. Will re-post with new link, but keep this link active.]

News broke (subscription required) over the holiday weekend that Apple is rumored to announce a home automation solution and/or platform at WWDC this year. Of course, rumors like this are to be taken with a grain of salt, but John Gruber's reply of "I’m pretty excited for next week." is classic Gruber-speak (albeit not a sure thing) for "this is happening."

So why does Apple have a shot at this working? How do they possibly expect to release a platform for the home when they're so notorious for closed ecosystems? Surely everyone can't afford to outfit their entire home in Apple products. This is only speculation, but here's how I think Apple can easily capitalize on this opportunity.

Framework is in Place

I've pointed this out before, but it is worth highlighting again. Apple is exceptionally good at putting a framework in place over the course of years without anyone giving it too much attention, then they drop a bomb of an announcement and suddenly everyone realizes the framework is in place already. Competitors have a hard time catching up because that framework takes years to build. Their iBeacon strategy is exactly that, though I don't think we've seen the bombshell of how it'll be utilized yet.

One big hurdle for home automation is cost. There is always a hub that must act as a brain for the whole thing, and that hub is usually quite expensive. Apple has this problem solved already with at least one iOS device in hundreds of millions of homes across the world. There is some concern for whether or not those devices stay within the home (or even need to) to keep the smart home products working, but that doesn't seem like a hard problem to solve with devices being connected so much of the time now.

With this infrastructure, Apple already has the app distribution system in place, the payment solution in place, the third party relationships in place, and the biggest monetary investment from the customer's perspective has already been made. It also doesn't hurt that Apple's solution here is supported by their vested interest in user privacy. Apple has already made their money from the customer, they don't need to sell user data; in fact they're highly motivated to keep that data as safe as possible to keep customers happy - this solves one of the major potential road blocks I highlighted in my piece "The Trouble with the Internet of Things."

Closed Yet Open 

Apple has very tight rules on how you can play in their ecosystem. They've also drawn some very controversial lines in the sand related to things like customization, inter-app data sharing, and plenty more. However, they're also smart. They know that they can't do everything themselves, they saw that when they announced the App Store, and surely they see it with a smart home solution. Apple makes a hell of  a platform for both users and developers.

Apple doesn't have to make any new hardware for this home automation solution. That's pretty insane if you think about it. It also gives them a massive head start (except against Google, more on that later). All they have to do is enable third parties to make products that adhere to the rules and use the APIs that Apple creates.

What better time to announce these new APIs than at WWDC? With some choice hardware partners they'll have a modest set of "solutions" available on the day that iOS 8 ships to the public this fall. All a user has to do is update their iPhone or iPad and buy a couple of accessories and their home is suddenly connected. We aren't too far from this right now with Lockitron and others, but I think by Apple taking on the infrastructure costs (servers, security, APIs, etc.) we can drive the third party prices down to more reasonable levels for a wider market.

Perfectly Apple

This sounds perfectly Apple to me. The hints have been there for years. The market is very large. The platform is already in place with the up-front costs largely already behind us. Third parties and customers both need a stable and universal platform to enable the "smart home" dream, and that's been really hard for any one company to provide. Apple is positioned perfectly, their reputation for respecting user privacy is in place, their reputation for stability and ease of use is strong. I'd be more surprised if this doesn't happen than if it does. 

As an aside, the connected home dream is largely why Google purchased Nest. I expect to see offerings from them very soon as well, much sooner if Apple announces theirs next week. It'll be interesting to see how the two approaches to solving this sell and grow.

The Trouble With the Internet of Things

The Internet of Things (IoT) is the fascinating and (potentially) fast-approaching addition of Internet connectivity to just about everything. From your blinds opening for you as you get out of bed to your fridge telling you you're low on milk. The Nest thermostat is one of the first highly successful IoT devices and it has shown how great the potential is in this space.

So what's the trouble?

In short: data and money, but let's break that down.

Data

The beauty of the IoT movement is that devices become intelligent. They learn patterns, they know where you are, then know when you're likely to be somewhere or do something. Simply put, they know you. They learn, adapt, adjust, and fine tune themselves to maximize your utility from them. All of this requires data analysis, pattern recognition, and storing said data. Furthermore, as smaller devices get connected and the analysis gets more computationally complex, the more we'll see the processing offloaded to the cloud.

If the processing is in the cloud, the data is in the cloud. There's no avoiding it. That means your location patterns, your arrival and departure times from home/work/activities, your grocery lists (do you want a big pharma company knowing your exact diet to target ads for a new cholesterol medication?), your sleep patterns, your hygiene patterns, everything about you is captured as data. The products are infinitely less valuable without this data, yet the realization of just transferring it over the internet to a large company is unnerving to potential users.

There is an opportunity here, of course. What if you had a central hub within the home capable of the processing one might need? No data needs to go offsite, it could all be local and secure, and it has the added benefit of working when the internet is out.

There are a few problems with this though (not to say they can't be tackled). The two biggest are a lack of standardization and cost. Without standardization, your "hub" will only work for the products from that one brand (or a limited group of partnered brands). Multiple hubs would increase price, so that doesn't seem like a good option, but if we desire standardization who drives that? It sounds like IIC could be the solution to that, so stay tuned for updates from them.

That brings us to the next point.

Money

In the age of the Internet we've all gotten used to getting things for "free." Sure, nothing is actually free, but the psychology of it is such that most people basically consider it free. There is no question that people are willing to pay for products and services that add value to their lives, premium versions of Evernote, Dropbox, Spotify, and many others are all great examples of that.

Each of these examples provides a free tier though. The sample of their service, in many cases a very generous sample, is so generous that many users will never upgrade to a paid tier. The nature of the IoT is that the value-add over time increases, and it increases after you've purchased and are using the products. I don't know if a "60 day in home trial" will be the solution, but somehow there will have to be a very clear way of showing users that these products add value to their lives to warrant the monetary (and perhaps privacy) costs. Early adopters and tech writers won't be able to sway the masses easily.

Without a very clear understanding for the value that could be added and a longing for that value, it will be a hard sell for newcomers to spend several hundred dollars on a hub plus any number of add-ons to connect the appliances, products, and rooms of their choice. There is a very high barrier to entry if the added value isn't obvious.

So how do you get over this hurdle? Well the most obvious is free hardware with service tiers - free to start, free features plus paid features, free under a certain usage level, who knows? As mentioned before though, nothing is actually free. There is no way a company will give away hardware if they're not getting the data. And if they're getting the data, you can count on them monetizing it if they have costs to recoup from the hardware. This problem circles back to the data section above and will be a challenge to solve.

Closing Thoughts

It seems likely we'll see both solutions. A "free" option for those who want free and a paid option for those who want privacy and are willing to pay for it. With any luck the IIC standardization will allow those two types of products to communicate with one another, but who knows.

There are plenty of arguments that we don't really need any of this, and it is true that some of the IoT applications are a little bit far fetched. Yet if there is substantial added value from connecting something to the internet, and I believe in many cases there is, then this revolution will happen whether or not everyone is on board. There is just the <sarcasm> small matter </sarcasm> of the user's privacy and their money.

Follow-Up On Pragmatic's Automation Discussion

Pragmatic Show Episode 3

The discussion on automation in the latest episode of Pragmatic was a great one. It touched on a lot of key value to be had in the smart home endeavor. Below are a few points from the show and my corresponding thoughts that should serve more as logical extensions rather than contradictions, though I do not speak on their behalf:

• Pragmatic: The true value is in automation, remote control is secondary.
• Mike: Largely I agree, 2 main considerations.
  1. The automation side is surprisingly underdeveloped right now. Companies like Smart Things are making progress, but the fact remains that the market isn't there yet. Automated lights will still turn off if you're still watching TV or reading, automated blinds will open when you get out of the shower before you're dressed, and motion sensors get tripped up by passing objects or glares that you don't want sensed. Once this stuff is perfected, it'll take off a lot faster. The user experience is currently unacceptable for anyone besides early adopters and nerds.
  2. Remote control doesn't have nearly as frequent of a use case in general, of course there are exceptions. However, a fair number of the use cases are arguably of higher importance. Consider forgetting to close your garage door when you leave for work - you never remember if you closed it or not so you either gamble, or turn back. The value in remote "control" is arguably more in the remote monitoring then being able to react. To merge these 2 points, you'd love to see automation take over here and sense that no one is home, none of the occupants' phones are detected to be inside the home, therefore the home takes action - locks doors, closes the garage door, adjusts the heat, lights off (except at sunset when the outdoor lights turn on), etc. I could discuss this at length, we'll leave it here for now.
• Pragmatic: There is an associated cost with spending your own time on installing, setting up, and maintaining a smart home. The "cost" and/or "savings" is not necessarily monetary and can be hard to measure.
• Mike: There is a circular problem here. The setup cost and technical knowledge required prevents it from being mainstream, the fact that it isn't mainstream prevents a lot of companies from investing in it, the lack of participation in the market prevents costs from dropping due to competition. I don't believe that the disruption in this market has happened yet, and by definition, disruption is what breaks that cycle. The Nest Thermostat and Protect are the closest we've gotten to that and I think the disruptive event is right around the corner. That being said, the iPhone of home automation hasn't shown its pretty little face. Disclaimer: I own a Nest Thermostat and could not love it more. Nest Protect is very high on my list of things to be purchased as well.

There will be more thoughts on this in future posts. I find this market to be full of examples of people and products that have much better selling points and features on the box than they have practical applications in improving one's life.