Hi Ayla, 

How can we determine the right value proposition for products aimed at the smart home market?

Let’s rephrase your question slightly: What makes a smart home ‘smart’—and how do you design products for that market?

An increasing number of companies want to know the answer to that question. According to a recent report from Harbor Research, “the smart home market is gaining substantial momentum, with an estimated 900 million smart devices existing in households across the world today.”


At the most basic level, a smart home is one that has sensor-enabled products that are part of the Internet of Things (IoT), plus a way to make use of the IoT data generated by the sensors. Of course, in the real world it’s a bit more complex than that.

For starters, there are three types of sensors:

  • Basic sensors are the most numerous. They are battery-powered and inexpensive, and they typically detect a single function, such as on/off, or measure a single value, such as temperature.
  • Dynamic sensors generally have multiple outputs and are more intelligent than basic sensors. They cost more, and smart homes might use one or a few dynamic sensors for functions such as energy management or smart irrigation.
  • Intelligent sensors are contextually aware. They are used in beacons, geofences, and many video-based applications. Intelligent sensors know who a user is, where they are in space and time, and what is happening around them.

Using a combination of sensor types is the first step to making a home smart. But using the IoT data the sensors generate is where the real smarts kick in. The smartness of a smart home depends largely on its level of data integration. The greater the integration, the more value to the home’s residents, the more they’re likely to adopt additional connected devices, and the more benefits to you as a manufacturer. As with sensors, increased complexity of integrations translates into increased intelligence:

  • In single-device integration, one device talks to one app. You can get remote control and monitoring of that one device, including push notifications and alarms. But it’s hard to integrate with sensors. Not much smarts at this level.
  • Device-to-device integration typically involves sensors. At this level, one sensor-enabled device can trigger an action in another sensor-enabled device, automatically. Currently, most of these interactions are between devices from a single manufacturer or through a retailer gateway
  • Integrated systems are where the smart home begins to really take shape. Sensors integrated into the system enable interconnected, multi-manufacturer IoT solutions such as those supporting Amazon Alexa, Apple HomeKit, or Nest.
  • The ultimate level of integration results in intelligent learning systems, which can apply pattern matching (for example, every day Dad comes home between 5 and 5:30 pm and turns on the TV to ESPN) to trigger automated actions (when Dad enters the home, the geofence turns on the TV and sets it to the ESPN channel). Intelligent learning systems can also analyze and respond to individual user preferences, such as preloading different preferences into the coffee maker so that you and your partner each get the coffee you like the way you like it, without configuring or interacting with the coffee maker.

Other characteristics of smart home solutions include:

  • Security and privacy technologies to keep both IoT products and users’ personal data safe from hackers
  • Mechanisms for making sure that smart home systems can operate even if the network connection is lost
  • Easy installation, setup, and access to the available smart home features
  • Interoperability among devices from different manufacturers

The Harbor Research report mentioned earlier also says: “We believe one of the biggest challenges that lies ahead for manufacturers looking to enter or expand in the residential market is their engineers’ lack of skills and technical expertise for creating smart home products and how much this will slow market development.”

Unless you already have teams of specialized IoT engineers on staff, with tons of real-world IoT experience, your best bet for getting the most value from the smart home market is to start with robust IoT platform technology such as the Ayla IoT platform provides. To find out more about what’s driving the smart home market, download the Harbor Research white paper “From Smart Devices to Smart Systems: The Keys to Catalyzing Smart Home Adoption.”