Connected home report a wake up call for European business

Business news | September 28, 2015

By eeNews Europe

The report details seven distinct opportunity spaces that could be exploited by telcos, utilities, retailers, insurers, warranty providers, home assistance providers, and appliance and consumer hardware manufacturers. Incorporating a foreward by Bill Ablondi, director of Smart Homes Markets at Strategy Analytics, the report outlines analysis which finds that the Western European connected home market will be worth up to €12 billion annually by 2019, with a total of almost 50 million homes having installed such technology (Strategy Analytics, Dec 2014).

Further, it states that a lot of the value will be new value – of real growth; but much of the change in the coming Internet of Things (IoT) revolution will be about value shifting from one sector to another. One of the many insights that the report highlights is that most crucial development will be that businesses will need to move from “just selling” consumer hardware, to hardware-based services, which will impact their models, margins and routes to markets.

Holger Knoepke, VP Connected Home, Deutsche Telekom, explained: "We want this report to be a wake-up for European business. Global giants have their sights firmly set on our markets and the value that can be extracted from many diverse industries, from insurance to energy, from warranty to connectivity. The opportunity is now, global competitors will not sit around and wait for European players to fully prepare their strategies and product development plans".

Knoepke continued: "Many firms still need to grasp the impact that the connected home will have on their market, on their business and on their model. If you are a business to consumer firm that provides products or services to consumers in their home, then be under no doubt that the connected home will impact you over the next five years. For many firms the implications will be dramatic. We have absolutely no doubt that this will lead to the further commoditisation for many players, to the disintermediation of many others, and dramatic changes in the relationship that brands have with other brands, and their route to market."

The report sets out how IoT – and the technology associated with the connected home – will transform the way we live in our homes. From micro-ordering of consumables, to providing greater peace of mind – across safety, security and insurance – to saving energy and proactive response and maintenance when appliances and devices fail.

Deutsche Telekom’s wakeup call outlines that the too many players will not survive without partnering, as there are not yet the industry-wide platforms or consistent standards. “We, the ‘connected home industry’, need to abandon previous proprietary and closed approaches, or ‘gated communities’, and open up to a higher level of collaboration. In the long run, no company – or brand – can establish the connected home alone – those who think that they can, will not succeed”, said the report.

Knoepke concluded: "Key to any firm’s success in this market will be starting with the customer. What are their needs and pain points, how can these be met by increased connectivity. To date, this market has been too focused on technology for technology’s sake, and overlooked the customer and their needs. Beyond this, there needs to be greater willingness to partner to realise growth. And finally, the winners will be those that are prepared to innovate, to take risks, and be willing to lead in a nascent market".

“Flexibility of the model and the payment structure will be critical to gain the broadest appeal, and all with the aim of providing consumers with greater levels of flexibility, convenience and peace of mind”, says the report.

www.connectedhomeplatform.telekom.net