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Connected Home Market: Movers and Shakers

  • November 2013
  • -
  • Frost & Sullivan
  • -
  • 19 pages

In this report, the latest connected home scorecard is reviewed; then, the concept is extended to include competitors in the connected home market. The results will be of significant interest to the various participants in the connected home space.

Executive Summary

What constitutes a market? That is, when can one point to a collective of vendors, providers and customers and say: this is a market with well defined competitive forces at play? This has been a key question concerning the connected home space, where just about any service provider or technology vendor can make a case as to its ability to deliver connected home solutions.

Although Stratecast, in fact, does view the connected home space as a market, it still considers it a turbulent one; characterized by many point solutions rather than a few well developed, comprehensive ones. In fact, it was for this reason that Stratecast developed the Connected Home Score Card; a tool to use when comparing the relative merit of various point solutions from the standpoint of an interested connected home customer.

This year, we updated the scorecard to include the results of the most recent connected home consumer preference survey; and we also look at the four domains of the connected home—communication services, content delivery, telemetry, and home networking—with the intent of selecting those vendors and solution providers who are setting the standard for performance for their particular portion of the market. Perhaps more importantly, we extend the concepts of the report card to determine the companies who are moving the market forward: that is, companies are compared to consumer expectations, with the intent of determining which companies are defining those expectations.

Although the connected home market is not as fragmented as in years past, it is still a place of extraordinary innovation and competition. Nevertheless, consumers are still being asked to choose between the hypothetical “connected toaster” and communication services. There is still no coherent common vision of what the connected home can be, although there are tantalizing hints embedded in some of the participants’ marketing messages.

The challenge for the market, as a whole, is to articulate a coherent message—present a compelling vision which appeals to consumers—providing a basis for comparative shopping. Additionally, the market needs to understand that consumers are being asked to choose between different value propositions that tend to confuse the concept of a well integrated communication and computing environment in the home. Where there is confusion, consumption is limited.

Stratecast stands ready to evaluate any connected home product or service brought to its attention. Using the tools articulated in this paper, service providers and technology vendors can leverage Stratecast’s market research to determine the resonance of their products and services with consumer expectations. Although this is not a substitute for comprehensive market analysis, it can be the first step in identifying market opportunities, and in developing a marketing plan.

Introduction

The connected home, as noted in previous reports, is a virtual living space that overlays the physical living space. As virtual, it is portable and extensible. Also, home residential communication services, as well as telemetric services and content control, can be made available to the consumer anywhere there is a broadband network connection; even if that connection is wireless.

Of course, with such an expansive view of the connected home environment, comparing one vendor or solution provider to another can be an exercise in apples and oranges. How does one, for example, compare a networked toaster to a new DVD player? For that matter, how does a consumer make that comparison. When every participant in a networked home space is contending against every other participant for a limited consumer wallet, who wins?

This is not a trivial concern. As game box makers are now finding out, game boxes do not have a discreet market anymore. Game playing can now be done on any mobile device or, for that matter, almost any networked device. This is why game boxes now do more than play games: they also surf the Web, play content, and support communication services. Holistically, consumer value has evolved to be more than traditional game playing. These new capabilities, of course, further blend the various consumer computing and communication environments.

Almost as important, at least from a competitive analysis point of view, is to know which companies in the market are setting the standard. Which are defining the vision—much as Apple defined the vision for smartphones—for a connected home? Such a comparison requires a new approach to metrics, albeit one that utilizes the same consumer feedback that drives the connected home scorecard.

In this report, the latest connected home scorecard is reviewed; then, the concept is extended to include competitors in the connected home market. The results will be of significant interest to the various participants in the connected home space.

Connected Home: An Updated Scorecard

In 2012, Stratecast introduced the notion of a scorecard to rate the relative value of various offerings in the connected home space. The approach made use of consumer survey data to develop a baseline of expectations within the four overlapping domains of the connected home: consumer services, content management and control, telemetry, and home networking.

The approach converts survey responses into a rating for each of the four domains, shown above, which represents what consumers would expect of an offering in that domain. Additionally, the appeal of the new product or service, as well as price, are compared to norms extracted from the connected home consumer survey data. Then, the relative ratings of any new product or service are compared to those expectations to generate a composite score: in each domain, a new product or service can meet expectation, exceed expectations or fail to meet expectations. This generates a composite score that shows, as a percentage, the degree of satisfaction of consumer expectations. It is possible to obtain a score of more than percent.

Table Of Contents

Connected Home Market: Movers and Shakers
Table of Contents

Executive Summary 5
Introduction 6
Connected Home: An Updated Scorecard 7
Comparisons in Discrete Connected Home Markets 9
• Consumer Communication Services 9
• Content Delivery and Management 11
• Home Networking 13
• Telemetry 16
State of the Market: Implications 17
The Last Word 18



List of Figures

Figure 1: Connected Home Space 7
Figure 2: Scorecard Output 8
Figure 3: Scorecard Baseline Comparison: 2013 versus 2012 8
Figure 4: Quad Play Penetration (North American 2013) 10
Figure 5: Communication Services Providers Market Movers 11
Figure 6: Consumer Content Management Market Movers 12
Figure 7: North America Home Networking Adoption, 2013 14
Figure 8: Home Networking Market Movers 15
Figure 9: Telemetry Market Movers ........................................................................................ 16

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