Connected living with IoT home automation: trends and pitfalls

20.01.2020
8 min.

Remember the cult film from the ’80s, Back to the Future, where the characters used doors with fingerprint recognition and voice-activated lights? What seemed to be science fiction back then quickly became reality today. From smart speakers and thermostats to lighting control and security alarms—humans now use home automation devices to facilitate everyday household activities and increase living comfort.

And the number of these devices is growing exponentially as people rely more and more on connected home technology. Statista reports the worldwide revenue in the smart home niche to grow to US$141 billion by 2023.

The wider proliferation of internet of things home automation in the future is promising. Having steadily climbed the curve from its first introduction in 2014, connected home finally reached the top of Gartner’s 2017 Hype Cycle for Emerging Technologies, along with machine learning and virtual assistants, before moving to the trough of disillusionment a year later.

Gartner Hype Cycle for Connected home, 2014—2018

So the internet of things in the context of the home clearly needs to be discussed in more detail. We’ll explore the example of smart homes to find out if and why IoT fell into the trough of disillusionment, and if it’s reasonable to invest in IoT development.

What is a smart home?

The terms connected home and smart home are often used interchangeably, but they are not the same thing. Adding to the confusion are the terms home automation and domotics. Let’s clarify the differences and similarities between them:

  • Home automation, or domotics: This encompasses appliances such as washing machines and dishwashers, that is, gadgets using electricity to make housework easier. Today, these appliances have become intelligent, with sensors gauging the required amount of water and thermostats to correct the temperature.

Some of these gadgets can be called “smart,” because their automation level allows them to function independently without the intervention of a human. For example, consider an air conditioner or a controller that senses when someone enters the room and adjusts the temperature to suit them.

Smart devices should be able to learn, meaning they have an AI component or are controlled by a device with an AI component, such as Amazon Echo, Apple devices with Siri, or Google Home.

  • Connected home: These homes have local connectivity via a local area network, protocols such as Zigbee or Bluetooth, and internet connection. This connectivity allows the automated devices to exchange information within the home or with a remote device or user over the internet. For instance, a “smart meter” can report electricity usage to the power utility via Wi-Fi.
  • Smart home: This is neither a connected home nor an automated home, although it needs both connectivity and automation. A smart home has automated, connected, and smart devices that work together. The devices manage themselves and can control other devices

This is why the images of smiling people holding phones or tablets that are ubiquitous in smart home advertising are actually misleading. If a phone or a tablet is required to issue a command to a device, then the device is not “smart.” You are simply using your phone just like you use your TV remote: it’s convenient, but not clever.

Bearing in mind the confusion between the three terms, one industry that really needs to understand the definition of a “smart home” is real estate. So in the US, CNET and Coldwell-Banker Real Estate got together and defined the smart home from the perspective of the sales agent who has been asked to find a “smart home” for a prospective buyer. They defined the necessary elements for earning the definition, such as a reliable internet connection, an automated security system, and a smart HVAC (heating, ventilation, and air-conditioning) system.

When can a device be called smart?

IoT smart home devices do not all have to be smart, but they should be connected either to an IoT platform or to other devices that are smart, such as voice-activated digital assistants. These can manage devices at the other end of the smart scale, such as a thermostat.

Michael Porter and James Heppelmann define four characteristics of IoT devices in the evolution to a “smart” device, namely:

  • Monitoring. Various sensors detect the location, operation, and condition of a device as well as the surrounding environment.
  • Control. Embedded software controls and personalizes a device.
  • Optimization. An analytical system diagnoses and optimizes a device’s operation.
  • Autonomy. AI algorithms allow for autonomous operation of a device, its self-coordination with other systems, self-diagnosis, and self-enhancement. These are true “smart” devices.

By these definitions, we would expect a truly smart HVAC system in the IoT smart home to sense someone entering the room and adjust the temperature to their taste without human intervention.

What does IoT automation add to the home?

Smart homes offer much more than comfortable ambient temperatures. New devices that supposedly make your home smarter emerge in the market every day. McKinsey identifies the following categories according to the device’s use:

Security and safety. Sensors ensure perimeter and internal security, as well as monitor flood and fire risk.

Utilities management. Controllers monitor and optimize energy, gas and water consumption.

Wellness monitoring. Wearables communicate vitals and monitor chronic conditions, such as diabetes or Alzheimer’s.

Smart appliances. This category includes connected fridges, stoves, Roombas, and coffee machines.

Entertainment. Music and video players that are attuned to the individual’s tastes.

Some of these categories overlap: for example, Samsung has a refrigerator that can play music and control other devices with its own digital assistant, Bixby, as well as compile shopping lists.

Likewise, adaptive learning is now being used in homes to customize automated systems based on the user’s moods, patterns, and behaviors. For example, the Nest thermostat utilizes learning features in order to automatically adjust the temperatures of the house to the homeowner’s preferences. After a short week-long learning period, the thermostat will have learned the homeowner’s schedule, which temperature they prefer and when, to adjust its behavior accordingly.

The use of adaptive learning technology in homes is growing rapidly: experts believe that smart homes will soon be able to distinguish between homeowners and guests just by analyzing their biometrics such as fingerprints, body temperatures, and even heartbeats, so that they can better adapt to individual needs. Imagine returning home after work and your smart home has already automatically adjusted the room temperature, lighting, and music based on your preferences. With the rise of adaptive learning and AI, devices capable of learning your habits are getting closer to reality.

Connected-home market breakdown by consumer type

Why is the move to IoT smart homes taking longer than expected?

While these intriguing devices are launched on a regular basis, and predictions are being made on consumers buying smart products, consumers’ enthusiasm doesn’t seem to match the hype.

Connected-home market percentage by consumer type

There are several reasons why the “smart” transformation of our homes is being delayed. Here are some of the most critical factors:

  • Limitations of the home’s current architecture
  • Affordability
  • Lack of market maturity
  • Trust and data abuse

The built environment

One of the first drawbacks is the homes themselves, especially in countries where many homes predate a regular supply of electricity. But even new homes generally lack the wiring needed for all these devices, let alone the pervasive Wi-Fi.

There is a need for architects and builders who understand how to build a home of the future. In a report on the need to provide “cognitive” homes for an ageing population in Britain, the Institution for Mechanical Engineers estimates that 78,000 houses need to be built each year over the next decade in order to accommodate elderly people. These houses could be smart and promote a healthy lifestyle, thereby reducing the healthcare burden. For example, voice commands and predictive technology enable elderly and handicapped people to control lights or lock doors without requiring much movement or being tech-savvy.

Another one of the latest home automation trends is a massive application of advanced technology that helps reduce resource consumption and protect the environment. A connected home and a green home have become nearly synonymous, since they are equipped with an increasingly large number of energy-efficient automation systems:

  • Automatic lights controllable from anywhere and that send custom notifications to homeowners when they forgot to turn them off. Coupled with motion sensors, this can save between 20-60% on lighting energy costs.
  • Smart thermostats that learn your schedule and temperature preferences, then adjust them accordingly based on the time of the day.
  • A smart water monitoring system with automatic leakage detection which is able to shut off the water supply when it finds a problem.
  • Smart window shades that lower automatically in hot weather to block the sun, keeping the home cooler without having to turn on air conditioning.

Can consumers afford it?

The Samsung fridge mentioned above does not come cheap, and neither do most other devices with embedded intelligent software. While consumers are generally keen to buy one or more devices, affordability is a big factor. McKinsey found that shoppers in general were prepared to pay more than $20 per month for safety and security features, but were less enthusiastic about other categories.

Customers willing to pay more than $20 month

PwC found that price remained the biggest factor in people’s reluctance to buy a smart home device among those who had not tested the waters.

Why consumers don't buy smart home devices

Data and the trust gap with the internet of things home automation

Consumers know that their personal data could be compromised via the internet of things, either through hacking or misuse by the device vendor. Consumers in each country value personal data security differently, but overall it is a factor that continues to keep some customers away.

The research presented by BlackBerry at the CES 2019 showed that 80% of US and UK consumers don’t trust their connected devices when it comes to data privacy. The same report highlights that 82% of the respondents supported the idea of IoT devices having a certain authorized stamp of approval denoting the level of security.

Moreover, the global tendency is moving toward ensuring privacy protection. In order to protect their devices and attract more buyers, companies are starting to implement new security features, including virtual private networks between end users and their connected homes, remote-connection authentication, advanced malware protection, and more.

Yet another emerging trend is the adoption of stringent regulations and security standards that are to be followed by smart home system manufacturers. Z-Wave Alliance already launched a new certification program that requires manufacturers to implement the strongest security mechanisms. Going forward, Gartner expects that regulatory compliance will become the prime influencer for IoT security uptake by 2021.

Still some way to go for IoT home automation

The technology has already reached the pinnacle of Gartner’s Hype Cycle for Emerging Technologies and begins to slide into the trough of disillusionment. Some of the factors that contributes to the slide are the same ones that cause the current reluctance in customers to buy internet-connected devices. A device that saves us by turning off the taps or hot plate would be a good thing, but what if it reports to our insurer every time that we forget, and in turn this affects our premiums or a future claim?

These devices also have their own flaws. Like a naughty child, a smart home assistant can have an occasional ‘bad hair day’, where yesterday’s request is ignored or misinterpreted today. Device vendors often neglect interconnectivity and interoperability, which can be very irritating when you have just bought an incompatible product. This is something designers will need to pay more attention to in the near future. No one makes a mobile app for just iOS or Android, yet the IoT world has yet to follow the same principle.

The future is bright, though

Vendors are responsible for listening to the marketplace so that they can move through this displeasing trough of disillusionment as swiftly as possible, then up the slope of enlightenment, where products will start meeting customer expectations. Finally, successful vendors will reach the plateau of productivity, although there will be quite a few losses along the way, such as those less-than-useful devices that our children will find very amusing.

The IoT smart home is still in its infancy, but the shift in consumers’ minds will inevitably come. We simply need to push forward through this time required for the technology to mature in order to reach the moment when smart homes become normal parts of our daily lives.