Consumer Electronics Show

How your home will know what you need before you do

The $5K fridge at CES

High tech is coming, again, to your home.

Tech companies and appliance makers are showing off their latest lines of connected devices promising to make consumers' lives better, safer and happier at the 2016 Consumer Electronics Show in Las Vegas.

Much has been made about the market opportunity underlying smart homes, but consumers are not yet convinced. The Consumer Technology Association acknowledges this, forecasting that sales of wearable devices will be quadruple sales of smart home devices in 2016, reaching 38 million and 9 million units sold, respectively.

Amazon Echo
Source: Amazon

That still represents a $1.2 billion revenue opportunity, and a 20 percent increase over last year, according to the CTA. (It expects revenue for consumer electronics overall to hit $287 billion this year.)

"Most people are scared or don't understand smart homes because it's been presented to them as: 'Here's a hub and a bunch of sensors, why don't you try to turn on your lights,'" said NextMarket Insights analyst Michael Wolf.

"Once consumers realize there are these technologies that are just so much better then the old technology, they'll probably adopt them," said Wolf.

One difference, compared to CES in years past, is that companies are putting less effort into becoming the de facto platform for your entire house, and more into delivering specific products.

"Companies have recognized that that battle has been won, and it's coming down to a few primary platforms and ecosystems, like [Alphabet's] Nest and [Samsung's] SmartThings," said Wolf.

This next generation of connected appliances works with those established systems, plus a few others, and is tailored to specific consumer needs. For example, Whirpool is showing off a refrigerator, dishwasher and range that integrate with Alphabet's "Works with Nest" and "Amazon Dash Replenishment." Both let users control these appliances and replenish supplies remotely via an app.

Samsung refrigerator unveiled at CES 2016.
Source: Samsung

Samsung's new Family Hub Refrigerator (reportedly costing $5,000), a connected refrigerator featuring a large touchscreen and cameras, lets users see what they have at home while out grocery shopping. In some parts of the U.S., where there are deals with grocery stores, consumers can replenish supplies via a MasterCard app.

"In the future you could add restaurant partners, commerce partners — you can start to think about interesting consumer opportunities," said Betty DeVita, MasterCard's chief commercial officer.

Many of the best products on show at CES aim to serve a specific subset of consumer and do that one thing really well. Some products want to take common activities and make them more convenient.

"The door lock, if executed properly ... it could be the real game changer," said Forrester analyst James McQuivey. Smart locks, offered by companies like August, are particularly popular with second-home owners, and people who rent their homes via Airbnb.

GreenPeak Technologies is demonstrating its new Family@Home application based on a self-learning algorithm which recognizes patterns of behavior and sends alerts when things change unexpectedly. The company is particularly focused on the growing elder care market, with more seniors now living at home for longer.

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Another key component of the emerging smart home: Artificial intelligence and machine learning. Many companies believe that consumers want to minimize their time managing all these devices and — like Facebook CEO Mark Zuckerberg — they are looking for solutions that anticipate their needs and take care of them.

Alphabet's Nest Labs has long been a leader in this regard. "We tend not to use the term 'smart home.' We prefer what we call creating the 'thoughtful home,'" said Mike Soucie, product strategy lead at Nest.

Amazon's cloud-based virtual assistant Alexa, the brain behind Amazon Echo, a freestanding in-home speaker, lets users control smart home devices using voice commands. It is always on and hands-free. The company has set up the Alexa Fund, a $100 million fund to encourage developers to build products on its platform.

"Voice control and video analytics are major trends," said Tom Kerber, Parks Associates' director of energy and home controls.

Netatmo outdoor security camera.
Source: Netatmo

Home security also is a big deal, so no surprise that remote video cameras feature prominently. A recent study by Arris found that security features are the most popular "Internet of Things" functions, with devices for home monitoring via cameras and sensors having the highest appeal.

One company, Netatmo sells an outdoor security camera that can tell the difference between a person, a dog or a car, and alert the homeowner when it sees something peculiar. Video analytics company Apical provides facial recognition, while protecting consumer privacy by only communicating the relevant metadata from a video stream, rather than the video stream itself.

"Combination sensor products that include voice, video, temperature and air quality sensors use the combined data set to gain a better understanding of the context of events in the home, enabling a much richer user experience," said Kerber.

Apple's smart home push

Many companies have realized that in order for the smart home to function, different products from different companies need to work together. To that end, on Tuesday executives unveiled a number of partnerships around specific products.

LG announced a strategic partnership with Alphabet's Google to work on smart objects that also ensure privacy and security, though they didn't identify any specific products.

"We are working very closely with Google and would like to embrace their ecosystems and make most of our ecosystem work with their products," said Skott Ahn, president and chief technology officer of LG.

"The biggest digital home announcements at CES are the ones that consumers won't care about, like the gradual rise of Google's [smart home operating system] Brillo and [smart device communication platform] Weave and protocol for home connectivity," said McQuivey.

Ford announces partnership with Amazon at CES 2016 to connect cars with smart homes.
Source: Ford

How about your home teaming up with your car? Ford announced a partnership with Amazon that connects Ford's Sync Connect with Amazon Echo, so users can tell Alexa to, among other things, start their car. From within the car, drivers can talk to Alexa and control their home as if they were standing right there in the kitchen making dinner.

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All these individual innovations point to where smart home technology as a whole is going, said analysts.

"I really think this year is evolution versus revolution ... IoT devices are coming into their own, even though they have been here for many years, they are really starting to have a deeper level of integration and a higher level of usefullness than they have previously," said Gartner analyst Brian Blau.

"It is just getting warmed up — the next three years will see some products that are truly useful, time saving, engaging and exciting. The early experiments are just about complete and both consumers and manufacturers are starting to understand what brings value, what is engaging and what is worth purchasing," said Stuart Sikes, Parks Associates' president.