Consistent steps

At Deutsche Telekom, we believe that the future growth in the smart home market will emerge from small, consistent steps that create effective solutions, which sync with the best, most relevant technology available at every stage.

An interesting case can be seen in the surge in popularity of smart speakers with built-in AI assistants. Their popularity has spurred brands to rush to market, with incumbents being quick to respond by offering more models and price points through their first-party speakers and by partnering with other brands to launch more speakers.

Within the smart home market, the smart speaker category is anticipated to remain the fastest-growing sector, according to IDC. The smart speaker market was valued at $2.68 billion in 2018 and is expected to be worth $11.79 billion by 2023.

Production volumes are certainly ramping up, too. According to Canalys data, in the first nine months of 2017, 17.1 million smart speakers were shipped worldwide, with a further 16.1 million in the last quarter of the year (driven by Christmas sales).

These big numbers, however, are not the heart of the AI speaker story. We must look to the small things to see the longer-term picture. Smart speakers are a key new driver in bringing consumers into the smart home ecosystem, where they begin interacting with a manufacturer’s voice assistant. By engaging consumers with small but immediate benefits and easy-to-connect cloud services, the door to a seamless upgrade path is held open. The next purchase perhaps incorporates smart lighting or home security—the possibilities may be endless, but the starting point is small.

This potential simplification of rapidly evolving, complex technology is a potent offering from AI, which resonates well with high-net-value groups who are often time-poor and within an older age group demographic. Indeed, AI will benefit the elderly arguably the most, revitalizing the ambient assisted living (AAL) market by enabling a universal control method—speech. The growth of voice-enabled or enhanced AI plays particularly well in the AAL context, where the ability to control devices with semantic speech is vital for several reasons. Not only does speech control remove the need to physically engage with small or hard-to-reach devices, it also rescues the user from engaging with the hardware, the OS, and the UI. These are all invisible to the speech controller, an invisibility that negates many technical barriers.

Being guided and assisted through complex setup or troubleshooting procedures removes a key barrier from AAL adoption while also surmounting the psychological tendency to shun ‘special’ help for the elderly or infirm. The fact that an AI-powered smart home interface will immediately be useful—and understood—by the grandchildren as well as the older generation makes a positive experience far more likely. 

Tracking the market

At Deutsche Telekom, we have also been following the AAL trend closely, and we recently announced plans to speed up the transition to voice-enabled AI during 2018 with the launch of an own-brand assistant and AI-enabled consumer speaker product to control smart home devices and Deutsche Telekom’s services, such as EntertainTV.

In addition, telecoms operators and energy providers are already partnering with us to access our ecosystem based on a White Label platform, with freemium services, gateways and compatible devices. By choosing the elements required to create a smart home solution that fits with their go-to-market strategy, our partners can start small but fast.

Smart home gains a voice

One of the key barriers to adoption for smart home technologies—historically speaking—was their relative complexity in installation and configuration terms. However, this complexity is being fought on several incremental fronts. Voice controls are playing a significant role in removing complexity. In addition, market maturity is resolving many early glitches as partnerships are smoothed out and technical standards are more widely observed. The increasing value of open standards is playing a valuable role here, as companies work together rather than against each other. Another fascinating factor is the user base itself, which is also maturing, with rising numbers of highly tech-savvy consumers joining the fray.