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Why is Korner Blogging on the Demise of the Smarthome?!

Published: Mon, 22 Jun 2015

Since Google bought Nest, the Smarthome has been on cruise control, and it has spent most of its time in the fast lane. But this week it had to pull over for a pit stop, and spent some time in the latrine.

First on the company front. As a player in the Smarthome, we can be the first to attest that hardware is a tough business. And this last week saw signs of what may be two of the first casualties in the space. Wink is said to be up for sale after a number of stumbles, including a high profile recall related to a security problem. And Leeo, a smart lighting and security company, just announced they will be laying off 30% of their staff after raising $39M only 9 months ago.

If that wasn't enough, Argus Insights reported that consumer interest in the Smarthome is tailing off.

Cadie Thompson from Business Intelligence talked to Frank Gillett from Forrester Reasearch about this trend. “One of the things that we hear in our qualitative surveys is people being really concerned about value. Some of them are skeptical.” Gillett said. “But it’s definitely on the early side and people are definitely interested in small, discreet purchases rather than some kind of complex, big thing.”

Ok, so why on earth is a Smarthome company like Korner blogging about the demise of the Smarthome? Well here's the thing, we believe in the Smarthome, we just think that most people are going about it in the wrong way. The recent 'plateau' in Smarthome demand is the result of the early adopter market approaching saturation. Most products in the industry, with their price points and complexity, are tailored to this early adopter crowd, but are ill-suited for everybody else. As we've blogged about before, price and complexity are key to broader adoption. And as Gillett described in not so many words, people need a chance to stick their toe in the water, and then lean on the railing a bit as they guardedly edge into the shallow end of the pool. Forgive me for the redundancy overkill, but we believe most people really are going to be that cautious before they venture into the Smarthome. Our belief is that most normal folks see some value in the Smarthome, but not enough to fork out a couple of hundred dollars from the start.

That's why at Korner we took pains to strip down the notion of home security to its barest essentials, which allowed a price point that doesn't require a lot of soul searching to get to a purchase decision. At less that $100, most people can dip their toe in the water, instead of doing a cannonball into the deep end. And with zigbee, a standardized wireless platform, there are plenty of options for expansion in the future, when time and budget permit.

So although the Smarthome may be saddled to the commode this week, not to worry. It'll be back on the road in no time.

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