Content brought to you by Joseph Sanborn, Managing Director and Head of Technology, Jordan, Edmiston Group, Inc. (JEGI)
My dream of being treated as king of the castle in my home may finally become a reality, as connected devices offer the potential for a very friendly 24/7 concierge to pamper me as if I were a guest in a luxury hotel… but it will all come at the price of potential loss of privacy and more monthly bills.
One of the more recent noteworthy deals was Samsung Electronics’ acquisition of SmartThings for a rumored $200 million. SmartThings is a home automation company with the vision of “making everyday objects around us do more to make our lives better.” The SmartThings hub enables a simple mobile phone app to connect with a variety of sensors that are deployed around the home to monitor everything from temperature and water leaks to lighting and appliance controls—it can even let parents know when their children are at home or some repairman is napping in the den.
The Samsung deal follows Google’s move earlier this year to acquire Nest Labs, a maker of “smart” thermostats and smoke alarms for homes, for $3.2 billion. As competition heats up to be “the platform” for the connected home, expect to see a real debate about who owns the data, as well as wildly divergent views on how advertisers can, or should be allowed to reach homeowners in their homes. How much will advertisers pay, for example, to know when a consumer’s refrigerator is almost empty or the patterns of when and why one is going to the store? And who will determine whether advertisers are allowed to have access to this data? Will consumer product goods companies and large Internet players (like Google and Yahoo) be willing to subsidize appliance purchases by consumers, in exchange for access to this data?
The rise of the connected home will also enable companies to offer a wide range of new services to consumers. In January, for example, Samsung’s CEO BK Yoon stated bold ambitions for the connected home at the annual Consumer Electronics Show in Las Vegas: “Imagine getting a health check from your doctor through your TV. Imagine your family watching a TV show in the living room while you cook…this is streamed directly to a screen on your kitchen appliance. Imagine taking a call from your refrigerator without picking up your smartphone. These are all glimpses into the home of the future.”
If a consumer is already willing to pay $7.99 a month for Netflix and $29.99/month for home security, it is not hard to envision a family paying a subscription fee to have virtual wellness visits for their children or remote management services for maintaining their home network.
Once the home is “connected,” we can expect “smart technology” to help us communicate with our home in a “Siri-like” way. Companies in this space will face a major challenge in attracting and retaining top engineering talent to develop the applications consumers will need to easily interact with their connected homes. To that point, two of the six acquisitions completed by Google this past month—Jetpac and Emu—were primarily acqui-hires of teams with artificial intelligence and related experience.
Jetpac focuses on “deep learning” technology, an emerging field in machine learning research. It leads to artificial intelligence by leveraging photos and other sensors to help applications learn more about their environment and users. Emu, a new mobile messaging application, incorporates a virtual assistant to automate tasks based on contextually understanding your conversations (e.g., scheduling appointments to your calendar, setting reminders, making restaurant reservations, etc.). Not surprisingly, the technology behind both companies had deep Silicon Valley ties to Google and Apple (in the case of Emu).
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