US house builders preparing for the rise of the smart home

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At this year’s WWDC event, Apple announced that five home builders had agreed to support HomeKit in new properties.

“Some of the biggest builders of homes in the United States and in China are now building new homes with HomeKit built right in, so you can move and just start controlling your home,” Craig Federighi, Apple senior vice president of software engineering, said at the event.

The market for smart home technology may be relatively modest today, but researchers are predicting a growth rate of around 15% over the coming years. Analysts expect the smart home tech market to be worth US$121.7 billion by 2022.

Apple launched its own smart things framework, Homekit, in 2015, aiming to put iOS at the heart of home automation. At launch, the framework was only used by a handful of hardware manufacturers, but now more than 70 of them have a product on the shelves or on the way. Apple has also created a single app, Home, for controlling all iOS connected objects around the house.

However, take-up has remained modest: it’s estimated around five percent of homes in the US have smart technology installed, using not only Apple’s HomeKit platform but offerings from rivals, including Google’s Nest and Samsung’s SmartThings. By enlisting home builders to its cause, Apple is looking for a new way of growing its market.

While smart homes may be niche today, the five home builders that have announced they’ll be installing Apple kit are hoping they’re just predicting how home buyers’ needs will change over the coming years.

“We know that people walk into a new home and expect new things. People expect new technologies but, at the same time, they’re super-confused about how home automation and the connected world works, so we take those two factors and turn them into opportunities by showing them a simple unified, interoperable solution,” Lennar Ventures president David Kaiserman said.

Given the relative size of the home building market compared to real estate resale, what’s in it for Apple? For one, there are no customer acquisition costs, and putting HomeKit appliances directly into new homes overcomes the two elements that can put people off smart home tech — cost, as the price of the kit is built into the price of the home, and complexity, as the HomeKit devices are ready to go when they move in.

Both home builders initially heard about Apple’s interest in having new HomeKit properties through their existing suppliers, such as lock-maker Schlag. The builders say they were interested in the collaboration with Apple due to its history of making reliable kit, and offering a single-control platform, Home, for each individual bit of equipment.

With Apple this year extending the range of accessories that can use HomeKit to add devices including doorbells, cameras, air conditioners, and home security cameras, combined with falling prices, consumers will soon see the attraction of smart home tech, home builders believe.

“We think the consumer, once exposed to these technologies, will never go back. It’s been available for a while in crude forms or expensive forms. Our anticipation is that home automation technology is becoming so attainable, it will be ‘why not? Why aren’t I putting it in my home?’,” Brookfield Residential COO Adrian Foley said.

Rather sensibly, both companies are thinking about the technological plumbing that will be needed to actually make the smart home deliver on its promises. In Brookfield Residential’s case, the company is looking at showcasing the first HomeKit-enabled home in Summerset in Ontario Ranch, California — an area where there are gigabit broadband speeds.

In Lennar’s case, the company is prioritising building homes where every inch is covered by a solid wi-fi signal. “Having an environment in your home that has no dead spots is an essential and foundation component” of delivering a good smart home experience, Mr Kaiserman said.

How will home builders deal with the pace of technology change? After all, a smartphone owner might replace their device every couple of years, but stay in the same home for five years, 10 years, or even more, during which time their smart home tech will be superseded by several generations of hardware.

And what of those home owners that prefer Android than iOS? Around two-thirds of US smartphone buyers went for Android according to the most recent figures from researchers Kantar Worldpanel, while in China the figure is over eight in 10.

“We pick the devices that we put in there for longevity very carefully, and we ensure that they are interoperable on the basis of things like wi-fi standards, so that in the future if you want to take your Schlag door lock and move it from Apple HomeKit to Alexa, you don’t have to change the door lock to do that, it’s a simple DIY upgrade,” Mr Kaiserman said.

“We spent a lot of time on the hardware to make sure it’s right and open enough to allow for the inevitable changes in the software.”

And it’s not just the next generation of home buyers that builders are hoping will see the use of smart home tech in future.

By controlling hardware like air purifiers through their phones over the course of several years, home owners will build up a fair chunk of data about the health, quality and running costs of their home. That data could potentially be shared by home sellers with their would-be buyers, much in the same way that they might share the council tax or energy star rating.

“I think that becomes almost like the Data Facts for your car, where it’s a register for how the home has lived — it’s kind of a health report for what’s happened,” Mr Foley said.

“In seven years time when you come to sell your smart home, I would anticipate producing some records of how the home lived, and here are some of the data records of the condition of the home.”