KEY POINTS

  • Apple recently capped off a two-year buildup of its smart home ecosystem by releasing the Home app. The app centers on the HomeKit developer protocol, making third-party devices compatible with Apple products and creating a central point of control for consumers to manage and use their smart home devices.
  • Apple is following Amazon's success with voice automated control in the smart home. The tech giant opened Siri up to third-party developers, enabling voice activation of smart home devices within the Apple Home ecosystem. 
  • The app is designed to address one of the biggest barriers to smart home adoption — technological fragmentation. Apple Home is primarily centered on creating a single platform for smart home devices that are easy to use and manage.  
  • The now-complete Apple Home ecosystem probably won't spur faster adoption in the stagnant smart home market, but it will give Apple a strong role in the market as it takes off. Apple Home seems like it's built for the Apple loyalist who owns many of the company's products and is deeply embedded in its ecosystem. By focusing its appeal on Apple users and setting up strict requirements for smart home device makers seeking to gain entry into the ecosystem, Home's total addressable market will be low.

Introduction

At its 2016 World Wide Developers Conference (WWDC), Apple announced the Home app — a native iOS application that helps iPhone, iPad, and Apple Watch users control their smart home devices through a single touchpoint. There are parallels between the Home app, set for release for iOS 10 later this year, and Apple’s Wallet, which is a central application that collects and stores payment information from compatible apps on the user's iPhone. But instead of collecting and storing payment information, Home collects and controls compatible smart home applications and devices.

This research note examines what Apple Home is and the effects it could have on the smart home market. It examine overall smart home market growth and identify how Apple is trying to fix fragmentation within the smart home market by creating the Apple Home ecosystem. It also looks at features of the Apple Home ecosystem from both a developer and consumer point of view. Finally, it discusses the key barriers that Apple and partnered developers will face in the smart home market.

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