Lowe’s plans to seek a buyer for its Iris smart home business as part of an overall effort by the home improvement store to restructure its operations. In its financial results call Tuesday, Lowe’s CEO Marvin Ellison said the company intends to exit its Iris smart home business.
He also said that Lowe’s would close 20 US stores and 27 stores in Canada. It will also close retail operations in Mexico and exit its Alacrity Renovation Services. As part of the exit from both the Iris business and the Alacrity Renovation Services Lowe’s will take a $14 million charge.
A spokeswoman from Lowe’s clarified that Lowe’s still plans to offer smart home products including the Iris line in the stores. It will also continue to support Iris users while Lowe’s seeks a buyer. Of course, once a buyer is found, it’s anyone’s guess as to what that buyer will do.
The decision to exit the smart home services market makes a ton of sense for Lowe’s. The company created the platform back in 2012 when the first wave of home automation startups entered the market taking advantage of the smart phone as a new way of letting people control and program automations. The Lowe’s hub offered ZigBee, Z-wave and Wi-Fi radios combined with a line of connected products that work with the Iris system. Those ranged from security gear to connected pet doors.
However, the line of products wasn’t open and monitoring the many sensors it offered required a monthly subscription. At the time the product launched this seemed like a hard sell, although Lowe’s was trying to reach mainstream America which wasn’t interested in complex DIY projects. What Lowe’s, and frankly most of us in the smart home market, missed was the challenge of the smart phone as the user interface.
Most people don’t want to program home automations through a smartphone and set those systems up for themselves. Instead, they want a smart home that does what people need it to do easily. And voice control via a digital assistant is the first step to making that a reality. Lowe’s did eventually add Alexa compatibility in 2016, but it still is a closed ecosystem that requires users to do most of the work of turning their home smart. And there’s that subscription…
So now, the question is who buys Iris. I am unsure of the size of the user base, but the most logical buyer would be someone who wants a proprietary system and a monitored alarm business. The challenge is those buyers won’t want to support a new system. The Lowe’s platform was originally built by AlertMe, which sold to British Gas. British Gas owns Hive, a smart home system that included a thermostat, security, and other elements. Buyers subscribe to the platform and get the hardware as part of their monthly fee.
Hive has expanded to the U.S. but I don’t encounter it often, so perhaps buying Iris and getting access to consumers through Lowe’s stores could make sense. Otherwise, it’s hard to see who would want a struggling smart home platform. Enough of them have been on the market in the last few years, that most buyers have picked one up.