My five big takeaways from this week’s big smart home event

This story was originally published on Friday, May 26 in my weekly newsletter. You can sign up for it here. 

I’m currently in Dallas for the Parks Associates Connections conference, where it’s clear that the smart home industry is laser-focused on five big topics. And while the mood here is fairly grim with regards to the short term, it is optimistic when it comes to the long term.

The five big topics of conversation both onstage and offstage have been smart energy, senior living, the Matter smart home interoperability standard, generative AI, and privacy. Smart energy and senior living offer the greatest hope for service revenue while Matter and generative AI have provoked both confusion and disappointment. The vibe around privacy, meanwhile, has been one of begrudging acceptance. Yes, this is something the industry needs to care about.

1. Smart energy: I’ve spent years talking about why smart energy is such a big topic for the industry as utilities try to build a more resilient grid that also takes advantage of renewables and consumers invest in more electric cars and home appliances (like induction stoves and heat pumps). There have been at least four panels and keynotes at the show dedicated to the topic, but few new insights. Utilities, alarm companies, smart home device makers, and electrical equipment manufacturers are all vying for revenue and the chance to sell consumers smart energy products and services.

Broadly speaking, smart energy refers to some sort of connected breaker box and software that links the home to the grid and helps both the consumer and the utility manage power consumption throughout the home. In the future, it will likely include home solar, EV chargers, and home energy storage systems. But I think we’re running behind on some aspects of smart energy because the best solutions will require standards and interoperability. The Connectivity Standards Alliance (CSA) hopes to bring electrical data into the Matter standard, but it isn’t there yet. Meanwhile the current industry solutions rely on API integrations that may or may not be supported.

This is especially troublesome because the Inflation Reduction Act and the Infrastructure Investment and Jobs Act both have incentives for homeowners and utilities to invest in smarter energy management. If companies and consumers start buying gear using these funds ahead of standards, it will make for a bumpier journey to a smarter grid.

2. Senior Living: As with smart energy, this is an area I’ve been writing about as a potential source of recurring service revenue for businesses. Also like smart energy, services around aging in place are always around the corner. I’ve seen executives from alarm companies express interest in these services over the course of the event, and companies such as Origin Wireless explain how new types of sensing in the home could help with fall detection or simply ensuring that someone is moving around the home.

That said, while these services be offered for years, organized, easy-to-install-and-manage systems are still not available for the mainstream. Some interesting ideas from the conference include a device from iGuard Fire, which mounts above a stove and detects when someone has left the stove on for too long in an unattended kitchen; a watch-like wearable from UnaliWear that can detect falls and also lets people who wear it press it to call for help; and a few companies offering something called “rise and shine detection,” which basically lets a caregiver know that a senior has woken up that morning.

3. Matter: It’s no secret that I’ve been disappointed by the slow rollout of Matter devices and some of the current challenges of implementing Matter in my home. I’m not alone. Here at the conference, representatives from companies that aren’t actively pushing the standard (but are members of the CSA) would lower their voices and tell me they weren’t seeing consumer demand just yet and were wondering when they should invest big in Matter (or if they should).

Onstage, Don Young, the EVP and chief operating officer at ADT, said the security company has gone big with its investment in Matter, but “to be honest it doesn’t have the momentum we thought it would have a few years ago.” Kevin Kraus, VP of global programs and technology alliances for smart residential solutions at Assa Abloy Group, which makes Yale locks, told me in an interview that the current state of Matter is about where he thought it would be.

Kraus’ big question, which was also asked by others, was who was going to spend the money necessary to educate the consumer about Matter and what it can do. He expects Assa Abloy will work with the big smart home controllers made by Amazon, Google, Samsung, etc. to explain how Matter will work. Mark Benson, the head of Samsung SmartThings, expects retailers will also get involved, although he does recognize that Samsung will have to take on a big role in education and marketing as well.

No one was willing to put a concrete date for when Matter might be ready for mainstream adoption, and no one was willing to share their current adoption numbers. I expect we can tell when the big companies feel like it’s ready when they start investing in marketing. I don’t think we’ll see smaller companies take that step.

4. Generative AI: Unsurprisingly, the topic of large language models and generative AI came up often, although I didn’t hear any concrete experiments or plans from smart home companies. Most people I spoke with thought generative AI would help the smart home become even smarter, but few had concrete things to say beyond that. I asked Benson and Paul Williams, the chief product officer at Nice North America, about their plans for generative AI and neither had anything to share. Williams even said that while generative AI was interesting, he worried about the privacy risks.

So there was a lot of hot air and little substance around generative AI. On the other hand, computer vision and applying AI for person detection, pet detection, package detection and wake word detection were all mentioned. So AI is still relevant, and companies are eager to continue exploiting it for features and better products.

5. Privacy: Surprisingly, privacy came up often during the event. Apparently Parks research indicates that concerns about privacy are the third main reason consumers aren’t buying a connected device. The top reason is because they don’t see value in connected products and the second is they find them too expensive. Additionally, Parks research indicates that consumers have shifted their privacy concerns from worries over hackers to worries over how companies use their data.

This is a big shift. Several panelists invoked privacy as a selling point, including Stefan Witkamp, founder and commercial director at Athom, maker of the Homey bridge. Witkamp said that connected device companies really only have three options when it comes to building business models for connected devices. They require either large up-front costs (that will include cloud costs over time), sales of consumer data, or subscription fees. He chose to launch a Homey product in the U.S. with a small monthly subscription fee to avoid anything that would cost users their privacy.

Another beneficiary of an increased focus on privacy is on-device machine learning. By processing data on cameras or on local hubs, manufacturers could avoid sending data to the cloud. This is also a cost savings, but I was excited to see executives mention both privacy and the potential savings on cloud costs. Lars Oleson, the CEO of Xailient, has even built a service as part of Xailient’s product that helps companies track opt-ins for camera images, so companies only train new computer vision models using data they have user permission to access.

Finally, in addition to Williams, who spoke on the podcast this week about privacy concerns related to the use of generative AI in the smart home, others brought up the same issue, including Benson from SmartThings. Maybe that future I envisioned a few weeks back about our smarter smart homes sharing sensitive data about their occupants won’t come to pass.