Smart Home Ecosystems

What is a Smart Home Ecosystem ?

One level below a Smart Home, is the Smart Home Ecosystems within it. Think of a Smart Home Ecosystem as a group of smart devices that work really well together. Typically these groups of devices are built by the same company or by close partner companies. There are some solid benefits for end users for Smart Home Ecosystems, like fewer technical problems and more information is shared between devices. That said, there are a few things you should watch out for.

Benefits – Seamless Experiences

Apple has built a huge business on the concept of a Smart Home ecosystem because it can create pretty amazing experiences for customers. By having an iPhone and an iPad, you start to see interesting benefits between the two, like shared apps between both devices and phone and text sharing. These sort of experiences increase as you buy more Apple products, like Macs or the HomePod. Apple isn’t the only player in town, either. Amazon and Google have similar ecosystems setup that create interesting experiences once you get several devices together.

Open vs Closed Smart Home Ecosystem

A Smart Home ecosystem is a group of devices that work together to create a seamless user experience, right? But there’s a catch. Not all ecosystems of connected devices are “open” where users are unrestricted in adding devices of their choosing and having access to various applications and content. Really, most are not “open”. Most ecosystems are actually “closed”. This means you will run into struggles getting new devices to work with your existing ecosystem if it’s not a part of the current ecosystem. You’ll also miss out on many features that work between devices.

Open ecosystems are ecosystems that make it easier for you to add any device, not just the devices a company supports. For example, getting a new device working with Apple’s HomeKit is a serious undertaking that most users likely couldn’t do. Whereas getting a new device working with Amazon and Google is possible by most users. However, if a true Smart Home Standard does become widespread, we might see all of these ecosystems open up more — a huge win for the end user.

Let’s go back to the Apple example, where Apple is considered a closed ecosystem. However this time, let’s say you have an Android Phone instead of an iPhone, and you still have an iPad. With this setup, your iPad won’t have access to any of the apps on your Android phone. Your text messages and phone calls won’t show up on the iPad, either. While this isn’t the end of the world, you can see how sticking with one company’s ecosystem and its devices, like with Apple, will offer a better user experience.

Smart Home Ecosystem Lock In

Ever heard of the “Walled Garden”, or more technically, “Ecosystem Lock In”? These terms refer to one of the side effects of building a Closed Ecosystem. Let’s go through an example where Ecosystem Lock In affects you.

Back to the Apple example. Think of someone who owns an iPhone and an iPad. Now they are in the market to buy a new laptop. As someone who already has two apple devices, they could benefit from also having a Mac, where text messages and phone calls then sync to their laptop. Using iTunes and other software also links between the Apple products they already own. That’s the hook these companies are looking to create. The more devices you have in a specific ecosystem, the easier it is to continue to buy more devices within that same ecosystem, and the harder it is to buy devices outside of that ecosystem. So ultimately you become loyal to a particular company and its products versus being able to shop around for the best devices.

Smart Home ecosystem Examples

Apple, Amazon, and Google are all building their own ecosystems, each with different degrees of Ecosystem Lock In and justification for creating that Lock In. Here is a better look at each of the big three.

Apple has the strongest Lock In of the three. Typically, users in the Apple ecosystem are brought in with an iPhone. From there, it’s an easy jump to grab an iPad that integrates with your iPhone–like with calls, iMessage, and other apps you have bought from the App Store. Then, if you get a HomePod, it’s extremely likely you’ll wind up using smart devices that only support HomeKit. At this point, you’re deeply entrenched into the Apple Walled Garden.

Amazon is building its own ecosystem with Amazon Prime, Echo devices, and Fire Tablets. Amazon’s gateway product is actually Amazon Prime, by adding more services to it and making it easier to spend money or engage with the Amazon store in different ways. From there, it’s easy to make the jump to grab a tablet (not an iPad) or Echo devices to outfit your house as a way to create shared experiences across all off your devices.

Google is in the game of Ecosystem building, as well. Google’s main building blocks are Android Phones, Google Home, and Google’s Search Engine itself. Once you have an Android Phone and a Google Home, you’re likely to buy devices like Nest that only work well with Google Home. But Google’s goals are a bit different than the above two ecosystems. Google’s main goal is to drive more traffic to Google Search. The idea is that the more devices and services you use that connect you to Google, the more Google Search you’re going to use.

Business Models

Amazon isn’t trying to make money buy selling these, but by having you use them.

Each of these three companies have different business models, and it’s good to know how each one is using their ecosystem to make money to ensure you understand what you’re getting out of the deal.

Apple’s model is for you to buy more Apple products. The better their devices work together, the more likely you’ll continue to buy Apple products exclusively. And Apple makes money off of the product sales directly.

Amazon’s model is for you to buy more from Amazon. The closer you are to their ecosystem, the more money you’ll spend with them. This is why Echo devices and Fire Tablets are fairly inexpensive as a way to lower the initial buying threshold for joining their ecosystem.

Google’s model is for you to use Google Search more. The more you use their devices, the more you send traffic their way. Similarly with Amazon, this is why Google Home and Android devices are often cheaper than Apple devices.

Ecosystem Strengths

Each of these major ecosystems do have different strengths and weaknesses. You might want to join one of these more for the benefits of the entire ecosystem, rather than one single device. Check out the below and note the points will likely stay true for any new device or service coming out in the future.

AmazonAppleGoogle
StrengthsNumber of supported devices, pricesSecurity, PrivacyEcosystem support is faster, weakest Lock In
WeaknessesSecurity, PrivacyNumber of supported devices, prices, strongest lock inSecurity, Privacy

Summary

Ecosystems provide you with very compelling and seamless experiences, like with having shared information and content between all devices you own. But it may come at a cost of reducing your choices in the future. Ecosystems from Apple, Amazon, and Google all have their particular strengths and weakness — and some level of Lock In. Now when deciding what ecosystem to go with, you’re more equipped with the trade-offs.

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