Smart home industry chain development foresight, how operators can cooperate and win together?
At present, there are many parties involved in the smart home industry chain, and each party gradually extends to full product services based on their own advantages. This paper analyzes the changing trend of smart home industry development, deeply compares the entry points, layout strategies and many other aspects of service providers such as traditional Internet companies, technology companies, traditional home appliance companies, niche startups and international operators in the industry chain, and summarizes the similarities and differences of each enterprise”s development. Finally, relevant suggestions are put forward for telecom operators in smart home industry cooperation.
Development trend of smart home industry
The market size of smart home in China is hundreds of billions of yuan and will still maintain a growth rate of over 10%. It is expected that the market size of smart home will exceed 800 billion yuan in 2025, as shown in Figure 1. From the market structure, the current home appliance original market is still the absolute main force, with a market size of nearly 300 billion yuan, followed by smart connection control, smart home security, smart home entertainment and smart light sensing.
China Smart Home Market Scale
The smart home market evolves from post-installation to front-installation, and intelligent finishing drives the rapid landing of smart home applications. With the continuous saturation of China”s housing market, major real estate developers are seeking new growth points and added value, with Evergrande, Vanke and other real estate developers joining hands with property companies and setting up technology subsidiaries. Through self-research or cooperation, they are moving forward to install smart home, changing from “space provider” to “space operator”. At the same time, the attraction of smart finishing to consumers is getting stronger and stronger, and hardware products such as curtain motors and smart panels, which are more suitable for the front installation market, are emerging, which also make the smart solutions for different regional scenes such as bedroom, kitchen, living room and balcony get attention.
Smart home develops from independent single products to full-scene coverage, and whole-house smart solutions are in strong demand. The development of smart home with single product as the core is not as expected, and the market sales of smart speakers in China in 2020 is 36.76 million units, down 8.6% year-on-year. Consumer research shows that 39% of consumers want all smart single products at home to be controlled through the same terminal. With the young consumer main force, space intelligence, product ecology and the upgrade of intelligent scenarios, relying on single products alone cannot meet people”s demand for smart home. Therefore, healthy, comfortable and convenient whole-house smart home gradually becomes a new choice for users.
Smart home is gradually transitioning from passive intelligence to active intelligence stage. With the rise and application of new technologies such as 5G and AI, smart home devices are transforming from scenario-centered to user-centered, and through the use of big data, artificial intelligence and other technologies, they can conduct independent learning, so as to build user portraits, understand user behavior, and provide punctual, personalized and intelligent services around human needs.
● Analysis of the overall situation of the industry chain
The upstream of smart home includes wireless communication chip and module manufacturers that dominate the perception layer and transmission layer, and AI platform that dominates the computing layer; the midstream includes smart home product suppliers represented by Internet companies, home appliance manufacturers, IT hardware manufacturers, communication operators and smart home technology solution suppliers represented by startups; the downstream includes the after-installation market that directly faces the end consumers, and the market for The downstream includes the post-installation market directly for end consumers and the front-installation market for real estate companies and home improvement companies. This comparative analysis mainly focuses on the typical manufacturers in the midstream of the industry chain.
Traditional Internet enterprises
Internet companies have the advantages of rich application scenarios brought by massive user data and technical advantages such as cloud-side collaboration, and enter the market after the installation of terminals. Mainly for the B-side, they build an ecology with smart hardware of cooperative enterprises and their own smart home platform to quickly open up home scenes and realize scene diversification and space intelligence.
Baidu proposed “All in AI”, starting from the important application of artificial intelligence scene layout of the smart home industry. 2018, Baidu announced the ABC IoT intelligent edge of the Internet of things program, through the integration of technology external empowerment, the construction of AI ecological company. In terms of strategic layout, it cuts from smart speakers, takes DuerOS conversational AI system as the core, and cooperates with third parties such as Qijia, Haier and Kukai to expand the scale of the ecosystem. In the core advantage, relying on deep technical precipitation and rich practical experience, deep integration of AI and cloud capabilities, to create a unique competitive advantage of “cloud intelligence”, its self-developed Hongwan voice chip for the first time in the home appliance industry to achieve mass production.
Alibaba takes “Tmall Genie” as the strategic entrance, builds Alink protocol platform through AIiGenie interaction system, and unites hardware manufacturers to build AI ecology. Ali will take IoT as the group”s fifth major strategy to provide integrated IoT solutions for the human residence. In the product layout, focus on the smart speaker category, around the “Tmall Genie” comprehensive layout AIoT field. At the same time, through investment in actually home and other channel giants, as well as three-dimensional home, advantage technology and other intelligent home cloud design and cloud manufacturing platform, improve the layout of the home industry chain. In terms of business model, the combination of Alipay Taobao is a strong endorsement for “Tmall Genie”, which broadens its sales channels and cooperation resources through Ali”s huge e-commerce system. 2020, “Tmall Genie” ranks first in sales, and is currently the smart home It is the platform with the widest coverage of the ecosystem.
Tencent has launched the WeChat Smart Hardware Access Program and QQ IOT Open Program to build a smart home ecosystem with its huge social user base and technical cooperation with third-party manufacturers based on IP licensing and IOT cloud. Tencent uses QQ IOT as a strategic entrance, and users can control the smart hardware around them or smart homes at home through WeChat and QQ to create three major application scenarios: “software connects to hardware, hardware connects to hardware, and hardware connects to services”. QQ IOT now supports over 100 kinds of devices, covering all kinds of home products, and supports the interaction of devices in multiple fields.
● Technology IT company
Technology IT companies create home entrances through hardware and realize hardware interconnection based on their own underlying IoT protocol platforms to build a pan-terminal connected home ecosystem, of which Huawei is more open than Xiaomi.
Xiaomi focuses on cost-effective smart home single product, focuses on investment to cultivate entrepreneurial army, and occupies home market with rich ecological hardware. In terms of product layout, Xiaomi takes smartphone Mi Home APP control center as the core, and integrates Xiaomi ecological chain”s multi-category smart home single products through Mi Home brand, including TV, smart lamps, smart cameras and so on. In terms of business model, it provides comprehensive support to its eco-companies in terms of supply chain, quality, sales channels and after-sales management through equity participation but not holding; it plays the “cost-effective” label for customers and rapidly expands the scale of home market with smart single products to seize the first-mover advantage.
Huawei gives full play to its strong technical capabilities, with “core, end, cloud” as the core advantage, through the HiLink agreement, and hardware manufacturers to carry out strategic cooperation to build an alliance army. In the product layout, the router as the entrance, relying on the HiLink platform, the integration of cell phones, TVs and a few own terminals and other partners of many kinds of terminals, and lighting manufacturers Opple, home improvement company actually home and other segments of the first-line manufacturers to cooperate extensively to build a smart home ecology. In the business model, for ecological partners, one is to launch HiLink smart home developer platform, router protocol conversion, through a single plug-in application to achieve hardware interoperability, the second is to HiAI intelligent terminal computing as a platform, from the “core, end, cloud” 3 levels of open technology to the smart home ecology, to achieve end-side AI scale application, convenient integration of hardware devices and cloud-based services.
Traditional home appliance enterprises
Traditional home appliance giants have upgraded their original home appliance products, relying on the advantages of product manufacturing, quality control and distribution channels, focusing on physical living space, relying on value-added services to achieve incremental growth, establishing a full product model of smart home, and building an open platform to aggregate industrial ecology.
Haier Smart Home provides “active, customized” as the core of the product of the family all-scene wisdom solutions. In the product layout, U open IoT platform as a carrier, the launch of five physical space, seven solutions, N personalized customization of the “5 7 N” business model, to create a “one-stop, full-scene, customized” smart home solutions. In terms of business model, the first scene brand “Three Wings Bird” breaks the traditional path of selling products and transforms from “selling home appliances” to “selling scenes”. Centering on the needs of user scenes, connecting different brands and resources, connecting home decoration, building materials and other home ecological resources, providing the whole process of services from design, construction to service, and laying out 001 stores, offline experience stores and township stores across the country, dividing the work to undertake the national landing of the “three wing bird” scenes.
The United States relies on continuous technological innovation to break through the whole line, focusing on the use of the experience of the whole process to open up, to create intelligent, customized, full-stack, a key to buy the whole house intelligent solutions. In the strategic layout, taking “improving user experience” as the grip and technological innovation as the breakthrough, the company launched the “7 to 3 speedy network distribution” technology and the industry”s first full-link near-field communication technology application for home appliances to address problems such as slow network distribution, complicated steps and low success rate. Smart Touch, to achieve high speed network allocation. Its security system has passed the international double privacy certification (the first in the industry), solving the security problem of user data privacy. In terms of product layout, it has launched nine product systems around the five major needs of safety, health, food, convenience and individuality, and focuses on creating five smart living spaces. In terms of business model, it creates its own AI IoT platform, connects with other platforms and products in the cloud, and achieves interconnection and cloud docking with Amazon, BAT, Huawei, vivo, OPPO, Skyworth, Bull, etc., breaking the connection barriers.
Small and medium-sized enterprises and some start-ups in the industry prefer to explore the value in the smart home segment, deepen the intelligent technology, form a differentiated competitive advantage and gradually form a leading advantage in the segment.
Based on intelligent central control MixPad product and whole house intelligent operating system HomeAI, Oribo builds smart home system from, sound, photoelectricity and other underlying layers to build whole house smart home ecosystem. In terms of product layout, we take basic appliances as the entry point and MixPad as the core control system to build an ecological platform that integrates various products, creating a “1 4 N” product matrix of 1 entrance/system, 4 types of basic environmental system products and N ecological products. In the business model, on the one hand, joint mainstream brands to develop products, products into the Oerlikon interconnection system; on the other hand, its own technology and products into the products of partners, to provide product and service support for enterprise intelligence.
Hikvision”s Fluorite brand, focusing on the home security application market, based on the SHC (Smart Home Camera) concept for positioning upgrades. In the strategic layout, the construction of security as the core of the “1 4 N” smart home IoT ecology, to Fluorite cloud video APP equipped with four types of self-research hardware, and open docking intelligent audio and video, intelligent lighting and other N subsystems cooperation ecology. In the product layout, build ten subsystems, open hardware and application access, combined with video and non-video business expansion, the construction of security as the core, open complete space intelligence solutions. In the business model, based on the full hardware ecology of space intelligence, build a SaaS platform around the expansion of Fluorite ecology, and build a semi-closed ecological component EZIoT IoT platform, and form a Fluorite cloud ecology through open IoT and open SaaS integration.
● International operators
International operators, based on traditional CT, use smart home as an important means of tapping into the home market. In the development path, companies represented by Deutsche Telekom unite industrial partners based on ecological platform to provide a full range of products and services; while companies represented by AT&T focus on security, automation and other segments for deep development.
With QIVICON smart home business platform as the core, Deutsche Telekom integrates hardware and services from upstream and downstream of the industry chain with standard interfaces and unified application interfaces as the technical means to pry up the smart home market with “light” development. In terms of product layout, it is based on home gateway, overlaid with user-selected software and hardware integration products, covering security monitoring, energy management, health monitoring, insurance services, family car management and other fields. In terms of business model, based on QIVICON platform, we provide partners with API application integration software development platform, web portal, promotion and marketing and customer installation service support, and partners are responsible for their own product-related service support, and charge users flexible package and hardware sales fees. In terms of industrial cooperation, it has attracted more than 100 devices from more than 30 mainstream manufacturers in the fields of home appliances, energy, health, automotive, lighting and consumer electronics, and has integrated Bosch and Siemens Home Connect platform into QIVICON to provide video or audio signals when users control home appliances, enabling more application scenarios.
AT&T (American Telephone and Telegraph Company) focuses on the home security and automation segment by acquiring related companies and laying out its own terminals to secure its leading position. In terms of strategic layout, AT&T acquired Xanboo to build a security service platform and launched Digital Life, a business that includes a variety of services to provide a full range of home security monitoring services. In terms of product layout, the new smart home gateway is the core, providing intelligent security and automation solutions, with flexible packages on demand. In the business model, according to the scope of the package to charge a monthly fee hardware single charge model, with equipment stacking, service upgrade differentiated pricing to enhance the attractiveness. 2019 AT&T in the United States consumer-owned smart home device brands accounted for 25%, ranking first, to become the leading smart security solutions in the United States.
In summary, companies from all sides build interconnection platforms based on their own advantages, aggregate their own or third-party products, and build smart home ecosystems, but there are still differences in the specific ways of implementation. In terms of market positioning, traditional Internet companies as well as Xiaomi treat smart home as a segmented extension of IoT or AI, rather than an independent market; international operators and Huawei are more concerned about the expansion of the home sector and treat smart home as its important segment; home appliance companies always take home as the core, and pay more attention to whole house intelligence and service scenario based on the original foundation. On the entrance, Internet companies, Xiaomi and other technology companies mostly take smart speakers as the entrance, international operators, Huawei and other communication companies take smart gateways as the entrance, Oreibo and other start-up companies take their own advantageous products as the entrance and cut into the smart home scene; while traditional home appliance companies have no clear single entrance. In terms of ecological integration, Xiaomi, traditional home appliance companies, etc. are mainly based on their own brand or eco-brand hardware due to their strong hardware production capacity, while Internet companies, Huawei, international operators, etc. are more inclined to integrate hardware terminals from different partners.
Industrial Cooperation Suggestions for Operators in the Smart Home Field
In the smart home field, telecom operators should adhere to the platform as the main line, increase the breadth and depth of ecological cooperation in hardware terminals and home applications, deepen the industrial aggregation effect, further promote the interconnection of their own smart home platforms with other platforms, enhance the industry influence of platform protocol standards, and strive to create a “platform of platforms “, broaden the smart home ecosystem, enable more application scenarios and business models, drive intelligent active services.