Proprietary 'smart home' systems losing ground to open standards

Annual shipments of proprietary wireless technologies for home automation are expected to double by 2017, but proportionately their deployment in “smart homes” will be cut in half as service providers including ADT and AT&T drive a move toward open standards, according to a new report by IMS Research.

IMS projects that shipments of proprietary wireless technologies will grow from less than 3 million nodes in 2012 to 6 million in 2017, primarily due to high-end automation suppliers maintaining closed systems and smart-home startups deploying those technologies to keep certification costs down. A node is any device that serves as a connection point for data transmissions.

Despite the growth, the proportion of smart homes employing proprietary wireless systems is expected to halve in the next five years, falling to 7 percent in 2017. IMS said this is indicative of a move toward open standards for the majority of smart-home providers, particularly in high-growth market segments such as managed home control. Managed home-control systems enable consumers to access status alerts and control thermostats and lighting via online portals or smartphone apps.

“Open standards will be dominant within the growing market for managed home-control solutions, particularly as service providers such as ISPs or security companies become more entrenched,” said Lisa Arrowsmith, associate director of connectivity at IHS Inc., the parent company of IMS Research.

Open standards offer a wide range of interoperable devices and can be integrated easily in the system design phase, IMS said. Companies including ADT and Verizon have opted for Z-Wave, while Comcast and AT&T have chosen ZigBee.

Despite the overall trend toward open standards, proprietary wireless technologies are projected to remain a strong choice in the high-end home automation market, IMS market analyst Elizabeth Mead told Security Systems News.

“These high-end solutions often comprise static, whole-home systems that often come at a higher cost,” she said. “Within these systems, certain home security features can play a part, such as motion sensors or magnetic contacts. [They are] sometimes included in the system to provide functions other than actual security—for example, assessing whether a window is open and adjusting the HVAC controls accordingly.”

Proprietary wireless technologies are also gaining traction among home automation startups, because developing devices with proprietary technologies allows a company to avoid the certification costs associated with using open standards, the IMS report stated.

In the long run, however, many companies deploying managed home-control services “want to move away from promoting or supporting the use of devices from specific manufacturers,” Arrowsmith said, instead preferring “to promote a specific open technology which will allow consumers to add a variety of smart-home devices from multiple manufacturers.”

Mead said security integrators and installers can take advantage of growth in the smart-home market by offering systems covering a range of applications, including lighting, HVAC control and home monitoring.

“Many consumers are concerned about being unable to pair devices and setting up their home network,” she said. “Therefore, simple usable devices with minimal consumer input will be strong in this market. Offering remote monitoring is also key … [as is determining] appropriate business models relating to device costs and subscription charges.”