Digital Trend & Solutions

Smart Home: Startups as a source of innovation

In 2017 the Internet of Things Smart Home solutions market in Italy has grown well, registering a +35% compared to 2016, reaching the 250 million euro mark. The most popular solutions in this market are mainly two: firstly, security applications that – along the lines of 2016 findings – continue to drive the sector with door and window sensors capable of detecting break-in attempts, surveillance cameras, locks and video entry phones. Following, in terms of impact on sales are heating management furnaces and connected thermostats, the growth of which is mainly due to companies’ ability to effectively communicate the benefits that can be achieved in terms of comfort and energy savings.

In this scenario startups play a key role, not only at national level, but also international: as of today, over fifty percent of products sold are delivered by startups. The Internet of Things Observatory research analyzed 163 startups operating at global level (+31% from 2016), of which 124 financed by institutional investors. Overall, in the last 3 years nearly 1.2 billion dollars have been collected, in line with what was registered in 2016. scenario management and security solutions are the leading solutions provided (45% of startups developed at least one product in these two areas) and it is specifically the area of security that attracted the largest capitals from investors: it is not a coincidence that the most substantial rounds of financing of 2017 have been granted to startups that developed smart bells (Ring, 109 million $), surveillance video cameras (Lighthouse, 17 million $) and connected door locks (August, 25 million $).

Furthermore, ever more frequently there are examples of startups that develop solutions that complement the offering traditionally provided by large business organizations, first and foremost manufacturers, insurance companies, utilities, and OTT (Over-The-Top), showing increasing interest towards new entrepreneurial open innovation focused initiatives. A representative example of this phenomenon is the Blink case, a company acquired by Amazon at the end of 2017 for 90 million dollars that developed a doorbell and surveillance camera that can be managed remotely.

What’s behind this acquisition? It is common knowledge that the North American giant has taken its first steps in this market in 2014 with the launch of Amazon Echo, a proprietary Smart Home speaker (with the support of voice assistant Alexa): an actual hub complete with loudspeaker, microphone, display and processor to make it smart – developed to reduce the complexity of connecting and managing multiple intelligent objects in the home. Amazon’s interest in Blink is not only for the possibility of integrating the solution developed by the startup (video camera) into the mega company’s broader home solution, it is instead driven especially by the proprietary chip-based technology, inexpensive to manufacture and at the same time featuring very low energy use, so much that Blink webcams are battery, not energy powered, and guarantee a two-year life span, no less. Amazon could therefore leverage these chips to optimize energy use of its most important devices such as the Cloud Cam and the whole Echo speaker product range, but also the development of future devices. All this would also considerably enhance Amazon’s Key service, currently available in the USA, making it even more secure and convenient.
For the American company the acquisition could therefore represent the missing piece needed to complete the smart home solution puzzle.

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