Apple Plots Home Break-In, Home Automation Break-Through

It looks like Apple will trumpet its entry into the home automation market next week at its annual developers conference.

Apple will trumpet its entry into the home automation market next week at its annual developers conference, according to online reports.

Analysts today viewed the move as a necessary long-term play for the company to keep iOS, particularly the iPhone, relevant as the buzz phrase "Internet of Things" (IoT) captures mindshare. Apple needs to stay up with the other Joneses, which includes everyone from Google and Samsung to Cisco and Intel, they said.

"If Apple comes through here, it's to be more relevant," said Ezra Gottheil, an analyst at Technology Business Research, who added that to Apple, relevancy means continued sales. "It's absolutely to sell more iOS devices."

Talk of Apple's intentions at the Worldwide Developers Conference, which opens Monday, June 2, hung on a report today by the Financial Times ( registration required). According to the newspaper, Apple may unveil a new software platform that would put the iPhone at the center of a smart home, controlling the household appliances, door locks, lighting, security systems, thermostats and other end points in a subset of the IoT universe.

The platform may be similar in ambition to the kind of initiative Apple kicked off earlier this year when it introduced CarPlay, its move to integrate iOS, again the iPhone in particular, with automotive information and entertainment systems.

The Financial Times, citing anonymous sources, said that Apple's platform would make it "easier to set up and control new 'smart home' devices," and that the company has been in talks with manufacturers to certify their products to work with the new system. Apple would then sell those products, much like it does accessories under its "Made for iPhone" logo, in its own brick-and-mortar and online stores.

Gottheil argued that Apple, because of its deep iOS developer bench, would have an advantage in the home automation market; those developers, he said, would be motivated to come up with "some very, very slick things" because of iOS' power amongst high-income consumers, those who have the money to consider tricking out their home.

"A compatible development environment for smart home apps makes a lot of sense," said Gottheil. "Apple has that as a leverage point. An iOS device would be a great way to interface with devices from multiple manufacturers."

He also saw the rumored platform, and its results, as an expansion of Apple's accessories business, which takes up a significant section of the firm's physical stores and gets a big boost from Apple's selection for its online mart.

Apple booked $1.4 billion in accessories revenue in the March quarter, a number that represented 3% of the firm's total sales for the period.

"Having new and interesting things in the store helps bring in traffic," Gottheil pointed out. "And that means more sales of its own hardware."

Patrick Moorhead, principal analyst at Moor Insights and Strategy, had a slightly different take on the home automation chatter.

"The big play here for Apple is to be the epicenter of the home, with their devices as the controller," said Moorhead. "All these things, lights, garage door openers, locks, thermostats, have to have a system that controls it with just one application."

As Moorhead envisioned Apple's strategy, the company would be unconcerned, perhaps even hostile, to other developers creating home automation control apps. It would want that premier spot for itself.

"That would play on the strength of Apple's ability to pull together a high-quality group of hardware and software partners," said Moorhead. "They don't have to build everything, they'd let others do that. But they would integrate everything into one solution, tie all of it together with one app that runs on iPhones, iPads, Apple TV and Macs."

Apple's approach would be quite different from Google's, which entered the home automation market in January when it spent $3.2 billion to acquire Nest, which makes smartphone-controlled thermostats and smoke detectors.

Moorhead, who has dubbed the multiple apps necessary to control different manufacturers' devices "app fatigue," was adamant that a single app is necessary if home automation is to expand beyond its current early-adopters and do-it-yourselfers market.

Revolv, a Boulder, Colo. firm that boasts a central hub and one-app integration with several device makers, has been in Moorhead's sights; he's added their wares to his own home.

Apple's size would give it a tremendous advantage over a small startup like Revolv, said Moorhead, and push the concept of one-app control -- naturally, one that ran on multiple iOS devices, the better to sell more smartphones, tablets and Apple TVs -- to a breakthrough point.

"I see Apple wanting to build one app to rule them all," said Moorhead. "With Apple taking the side of the 'human Internet of Things,' it could validate the mass market nature of home automation."

Revolv had similar thoughts today.

While the company declined to comment on specific questions about Apple's intentions -- it cited the lack of an official announcement -- Revolv welcomed Apple's entry, if that is what happens.

"From an industry perspective, this is great news," said Mike Soucie, co-founder of Revolv, in an emailed statement. "Google's entry into the smart home, via Nest, indicated that it is now time to move beyond the technical 'maker type' for the DIY smart home. Apple creates even more momentum for the 'smart home for the rest of us' and elevates awareness with consumers, which is good for startups like Revolv that have limited resources to educate the mainstream market."

And the market is big enough for Apple to play in, Moorhead said. "This is a very long term play. The installer market is billions. And the DIY market is looking at a ten-times increase over the next five years."

According to ABI Research, home automation spending worldwide will reach $14 billion by 2018, with half of that money spent in the U.S., a traditional stronghold for Apple.

"It's very different than in the past," argued Moorhead, referring to decades-long promises of an eventual "smart home," promises that were never really kept, even though giants like Microsoft put their shoulders to the wheel. "Today you have a variety of wireless, all with much higher quality, many with better distances than in the past. And costs are much lower."

Gottheil agreed. "IoT is happening. And Apple pioneered the idea of a home hub, dating back to not long after [Steve] Jobs returned to Apple," said Gottheil, who was referring to a 2001 keynote at the Macworld conference, where the then-CEO trumpeted the idea of "Digital Hub," a vision where the Mac served as the household's central controller of entertainment and productivity.

"We think this is going to be huge," said Jobs then, predicting a future that never quite came to pass.

"Apple has always wanted to manage the interrelationships between itself and other ecosystems," said Gottheil. "They can make all the pieces click."

Steve Jobs unveils Apple's 'digital hub' strategy at Macworld 2001.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

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This story, "Apple Plots Home Break-In, Home Automation Break-Through" was originally published by Computerworld.

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