Smart home: It’s no longer a futuristic gimmick

Los Angeles TimesDecember 28, 2013 

At an October tech summit in Chiba, Japan, a staff member of Sharp Corp. shows a tablet that has an application to control and communicate with home electrical appliances via its home energy management system. Companies including Panasonic and Toshiba are diverting engineers and money away from their TV operations and into developing “smart appliances.”


For Raffi Kajberouni, the keys to his Santa Clarita, Calif., home have become relics.

If he locks himself out, no problem. If a friend arrives at his two-story house before him, there’s no waiting outside for Kajberouni to arrive. Kajberouni taps his smartphone and his front door unlocks.

He can also turn down the thermostat or view his home security cameras from anywhere in the world.

“A lot of my friends are jealous,” the 31-year-old said. “It’s like the home from ‘Back to the Future,’ but in real life.”

From complete home systems to individual Internet-connected products such as high-tech appliances and power strips, the smart home is no longer a futuristic gimmick.

The technology behind smart gadgets — items that can be controlled remotely or perform tasks on their own — has been around for decades, but until recently the devices were rudimentary and, above all, expensive.

“It had always been an upscale-type business: Unless you were in the top 5 percent of income levels, you didn’t have access to this type of connectivity,” said Randy Light, merchant of home automation for Home Depot.

Wireless Internet and the widespread proliferation of smartphones are making smart home technologies more sophisticated — and affordable.

“This used to be something out of ‘The Jetsons’ or limited to the super-rich,” said Jonathan Dorsheimer, an analyst at Canaccord Genuity.

But as smart home technology has improved and costs have come down, “it’s becoming more mainstream.”

Analysts estimate that only a small single-digit percentage of homeowners have smart homes.

But the home automation systems and services market is expected to see enormous growth in the coming years and is forecast to reach $14.7 billion in revenue globally by 2017, up from $3.6 billion last year, according to NextMarket Insights.

These days, a wide swath of companies is clamoring to sell smart systems, including home security firms, telecommunications giants such as AT&T and Verizon, cable providers and utilities.

That’s expected to help “propel the market from its fairly modest size today to one which serves more than 35 million households by 2017,” NextMarket said in its recent report.

Meanwhile, technology giants such as Samsung and LG are rolling out individual smart home products, part of the “Internet of things” trend that has seen Internet connectivity make its way into everyday items.

The housing recovery could also fuel growth if owners choose to pull out their rising equity to give their homes high-tech upgrades.

And as Americans purchase more newly built homes, they may increasingly find those digs fully integrated with their phones. Some of the nation’s largest home builders now market tech-equipped houses’ advantages over older homes.

Although new homes are usually more expensive, builders have emphasized the long-term cost savings owners can reap through solar panels and the ability to monitor and change their energy usage with smart devices.

Smart home technology isn’t for everyone. For many, it’s not too much trouble to set the washing machine or dishwasher manually or wait until getting home to turn on heat. And smart home products are still more expensive than old-school items.

Analysts also point out that in many cases, it could take years for the savings from reduced energy use to offset the cost of installing a home system.

But the market is surging ahead. Los Angeles-based builder KB Home now offers a base home automation system in all its new communities nationwide. The standard system enables owners to track their energy use through the Internet.

Home buyers can then add options, including appliances, a thermostat, lighting, security cameras and locks that they can control through smartphones and tablets. Solar power also comes standard in most of the firm’s Southern California communities.

A smart refrigerator, for instance, can be set to make ice only at night, when energy use is cheaper. And parents can keep track of their children through security cameras they view using their Internet-connected devices.

Lennar and Pennsylvania-based Toll Bros. also offer various versions of home automation and solar energy systems in many of their communities. This year, Lennar started rolling out solar energy and home automation as standard features in 80 of its California communities and a select few on the Eastern Seaboard, said David Kaiserman, president of Lennar Ventures. Smart lights, front-door locks and more come already built in.

In Lake Forest, Calif., Toll Bros. will soon debut a model home devoid of light switches in common areas. Instead, an owner would use touch screens mounted to the wall to control bulbs.

As the industry grows, most of the expansion should come from homeowners updating their aging abodes, said Michael Wolf, founder of NextMarket Insights. There are simply far fewer people purchasing new homes.

As more people learn about the potential for smart homes and the market grows, expect more tech companies to launch their own smart home products, said analyst Dorsheimer.

“I do imagine what we will see here in the future is companies like an Apple or a Google coming into this particular market,” he said.

“There’s money to be made.”

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