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Don't assume Apple will own the smart home -- here's why

Commentary: An Apple smart home would shake the neighborhood, but SmartThings and other current players shouldn't start packing.

Rich Brown Former Senior Editorial Director - Home and Wellness
Rich was the editorial lead for CNET's Home and Wellness sections, based in Louisville, Kentucky. Before moving to Louisville in 2013, Rich ran CNET's desktop computer review section for 10 years in New York City. He has worked as a tech journalist since 1994, covering everything from 3D printing to Z-Wave smart locks.
Expertise Smart home, Windows PCs, cooking (sometimes), woodworking tools (getting there...)
Rich Brown
4 min read

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Last week buzz-heavy SmartThings outlined a broad expansion of its self-named home automation platform. The goal: improving its smart-home experience for consumers and attracting big-name developers to its new app and device store.

Its Android and iOS apps received some interface polish. It also now has a developer certification program. That should help customers make sense of the hardware, apps, and eventually services (think ADT-style security monitoring) you can soon purchase directly from the SmartThings app.

Looming over SmartThings' news is Apple's supposed announcement next week of a new, iOS-based standard for smart-home devices. Such a development might seem dire for a company like SmartThings. I'm not convinced.

SmartThings looks pretty smart

To those new apps, devices, and services, SmartThings has added official support for the Jawbone Up24 smart wristband, the Life360 family monitoring service, and soon Quirky+GE's family of connected household devices. That's on top of coverage for smart locks from Kwikset, Schlage, and Yale, smart lights from Philips, GE, and Sylvania, and general home automation accessories from Belkin, Lutron, and others.

Get smart with SmartThings
SmartThings' smart home starter kit Colin West McDonald/CNET

The company will also be preserving the experimental features its early adopters have come to love, which enable things like custom code to add unofficial support for the Nest Learning Thermostat and the DropCam Pro IP security camera.

For smart-home early adopters and future mainstream customers, SmartThings' expansion checks off a lot of the right boxes. Support for multiple mobile operating systems? Check. A certification program to ensure that everything works together? Check. Works with a broad selection of well-known devices, software, and services? Yes. Still open enough to let you play around with products that aren't unofficially supported? Sure.

The case for Apple

Apple has plenty to bring to the smart home, of course. Forgetting little things like, you know, name recognition, marketing muscle, control over the retail experience, established partnerships with major media and technology brands, and a network of thousands of loyal developers, Apple can also do a lot to improve the smart-home user experience.

Through OS-level integration and sheer software design muscle, both initial setup and general usability could improve markedly in an Apple-driven smart home.

A patent Apple filed last fall also hints at a new technical advancement to introduce smarter in-home user location tracking. That's a trick that has vexed current smart-home products.

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The Nest Learning Thermostat CNET

As Nest owners can attest, the Auto-Away feature can become confused if you stay in one spot for long. It will interpret your inactivity as absence. The Nest might then turn the heat down, thinking it's saving you money when you're actually just in bed asleep. Better location awareness from Apple could help prevent that kind of cold awakening.

The game is just getting started

How might SmartThings, and other extant smart-home platform vendors survive entry by Apple? Openness, for one. Yes, Apple might appreciate a user-made hack allowing savvy consumers a way around Nest's (thus Google's) API restrictions on its products, but it would be uncharacteristic of Apple to leave a similar door open on its own network, from a competitive standpoint, as well as for security reasons, real and imagined.

I would also invite you to conduct a search on the Google Play store for Apple-made apps. Find any? No? Then you'll understand why smart-home hardware makers might not want to build devices exclusively for an Apple-based smart home. Hardware is generally a volume business. Patents expire, or die in court, or are copied within (or past) an inch of the law. If I'm a startup making a smart doormat, which platform do I choose to reach the widest customer base, Apple, Android, or one like SmartThings, that's available on both?

Things that could affect that calculus: a superior Apple smart-home user experience, shelf space in an Apple retail store, or even an aggressive Apple closing its own app store to smart-platform competitors. All possible. As is a larger smart-home presence from Google. Or Samsung. Or General Electric . Or Ford. Or Microsoft.

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Microsoft recently partnered with smart-home hardware maker Insteon. Microsoft

If these trends continue...

Of course, if Apple enters the smart home, the game not only changes, it also gets prime time coverage in a way that might not happen from those other firms. Consider the example of Apple TV, coincidentally rumored to play a large part in an Apple smart-home push.

Apple CEO Tim Cook recently claimed to have sold 20 million Apple TV units globally, generating $1 billion in purchased content sales. Primary competitor Roku only has U.S. sales figures, but it claims to have sold 8 million units.

Consider usage, though, and the underdog's prospects start looking up. From a Parks Associates study, while Apple has sold more units globally, about 37 percent of US households with a streaming media device use Roku as their go-to product for the job. Compare that with only 24 percent of those that favor Apple TV.

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Roku shows the little guy can still compete with Apple. Sarah Tew/CNET

While Apple's units sold for the Apple TV looks impressive, it's the usage that matters more for the bottom line. After all, SmartThings CEO Alex Hawkinson has told us on multiple occasions that he'd one day like to get to the point where he can give his hub away for free. You need to move a certain number of units for the economics to work, of course, but if SmartThings isn't making money on the hub, it should be clear that he's looking to taking a percentage of devices, apps, services, and, yes, usage data sales to make up the difference.

Apple playing in the smart-home market surely takes some sales away from SmartThings and other existing smart-home players, but Apple buying in also helps expand awareness, which translates to sales for everyone. With a strong early mover position, a growing body of partnerships, and a focus on both mainstream and enthusiast consumers across mobile operating systems, there's no reason to think SmartThings can't capitalize on an Apple smart-home move in the same way Roku has with the Apple TV.