Smart home, a bone that will eventually be chewed by NB-IoT?

As for the huge scale of the smart home market, we can see a lot of forecast data released by countless research institutions. Let’s take a look at a few of them:

• From 2016 to 2018, the scale of my country's smart home market has grown year by year. In 2019, the market scale exceeded 150 billion yuan, and will reach 182 billion yuan in 2020. —— iiMedia Research
• The scale of China's smart home market is growing at a rate of 20%-30% per year. ——Electronic Equipment and System Research Center of China Electronics Standardization Institute
• In 2019, the shipment volume of smart home products in China totaled 840 million units, of which video entertainment shipments accounted for the largest number, at 347 million units. Home surveillance and security equipment ranked second, totaling 164 million units.

From the above data, we can see that whether in terms of scale, growth rate, or terminal access volume, the market prospects of smart homes are huge.

A market that is visible to the naked eye but out of reach

With the maturity of wireless connection technology and low-power chip design technology, the consumption threshold of smart home products has gradually decreased, and consumer acceptance has continued to increase. The smart home industry has truly begun to develop rapidly and has grown into one of the most promising market segments in the Internet of Things industry.

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The greater the market potential, the more natural competitors there will be and the greater the competition will be.

In this market competition, smart home has naturally become a strategic offensive area for NB-IoT. However, we have to admit that for this seemingly achievable "bone", NB-IoT still needs to work harder to capture the "three-acre land", because:

1. The applications currently available are relatively closely tied to existing communication technologies

Wireless communication technology has become the cornerstone of home intelligence. Currently, the most widely used wireless technologies on the market are ZigBee, Bluetooth, and Wi-Fi. Wi-Fi, Bluetooth, and ZigBee all have their own application areas, which are mainly determined by their advantages.

• Wi-Fi is being used in a wide range of IoT applications, including home appliances, surveillance cameras, and toys, and no gateway is required when connecting to smartphones or the Internet via Wi-Fi.
• The situation with Bluetooth is similar to WiFi. All mobile devices support Bluetooth and can connect directly, but Bluetooth is mainly used in wearable devices and fitness equipment with lower power consumption.
• ZigBee is mainly used in home automation, such as lighting systems and security sensors, because in this field, cost and power consumption are key factors and mesh networks are required.

Wi-Fi, Bluetooth and ZigBee are three wireless communication methods with their own advantages and disadvantages, and they occupy different markets. So far, these three technologies are still the main communication technologies used in smart homes, and they are closely tied to various home appliances. Based on the early development, they have already achieved the best in terms of user awareness, cost and supporting services. It will take a lot of effort for new technologies to compete with them.

2. Other new competing technologies have also entered the smart home market during the same period

In recent years, as the growth rate of enterprise-level IoT has begun to be limited, LoRa companies have begun to adjust their development direction and simultaneously attack the consumer-level IoT. As the main use case category in the consumer-level IoT field, smart home is the most anticipated application scenario in the consumer field.

In fact, the "LoRa force" is also spreading to the field of smart homes, forming many landing cases, and some companies have already released LoRa-related consumer products, such as thermostats, smart door locks, leakage monitors, smoke alarms, air conditioners, temperature and humidity sensors, smart shoes and smart sockets.

3. The market cultivation cycle is long, and it takes time for new technologies to be popularized in the smart home field

After nearly four years of development, NB-IoT has gained popularity in the IoT industry. The three major operators have built millions of NB-IoT base stations and have large-scale application cases. However, in the early stages of NB-IoT development, the industry focused more on some policy-driven areas, while the vast consumer-level applications are a blue ocean market that has yet to be developed. As mentioned above, smart home is the most important use case category in the consumer IoT field, and this is also true.

Although, from the perspective of the industry, NB-IoT has passed the stage of publicity and market education. But on the consumer side, the next step is to continue to cultivate more applications in the consumer application field. However, for each segmented field, it still requires a long cultivation cycle to move from the trial stage to the mature stage step by step.

The widespread application of NB-IoT in smart homes brings both opportunities and challenges

In this blue ocean market of smart home that has yet to be fully developed, from the application side, NB-IoT is now flourishing in industries such as smart water meters, smart gas meters, smart smoke detectors, smart door locks, smart home appliances (air conditioners, washing machines, refrigerators, rice cookers, etc.), and smart sockets. It is expected that tens of millions of connections will appear within one or two years, and is expected to reach a billion-level scale soon.

Of course, there are many problems that need to be solved in the actual use of NB-IoT. From the perspective of enterprises, many enterprises are currently taking a wait-and-see or resistant attitude towards NB-IoT. According to the feedback from some small-scale enterprises that adopt NB-IoT technology, the current products using NB-IoT technology mainly have the following problems:

• The first is the cost issue. Compared with Bluetooth modules that cost from a few yuan to more than ten yuan, although the NB-IoT module has reached the 15 yuan mark, it still does not have a significant enough advantage. This does not provide enough motivation for consumers or solution providers to replace the mature wireless communication solutions with new technical solutions.
• The second is after-sales problems. Taking smart door locks as an example, it can be seen from some user feedback that the current network delay problem of NB-IoT door locks has caused many customers to complain. When companies try to solve it, they find that it is a network problem, which is difficult to solve on their own. They often have to contact operators to do some maintenance and adjustments at the system architecture level, which can slightly improve the delay and disconnection problems, but the problem still exists.
• The third is the investment problem. Currently, the NB-IoT network is in the early stages of commercial use, and many problems need to be discovered and solved. Therefore, many manufacturers are reluctant to enter the market. Let alone the funding problem, let’s talk about the most serious problem of the company’s reputation. Once the imperfect technology causes customers to turn against the brand, the loss of goodwill will be immeasurable.

Conclusion

In the first half of the year, the release of the "Notice on Deeply Promoting the Comprehensive Development of Mobile Internet of Things" (hereinafter referred to as the "Notice") and the official inclusion of NB-IoT as a core component of the 5G standard have had a huge impact on the development of NB-IoT in various fields, including the smart home field.

• First, the development direction of communication technology has been clarified. In the future, 4G/5G/NB-IoT will coexist and have a longer life cycle. Therefore, manufacturers will not only have a clearer direction in technology selection, but also eliminate the concerns of terminal application manufacturers, so that they can focus more on developing a certain technology.
• Secondly, NB-IoT terminals are long-term operating products, and manufacturers have made various attempts before the release of the "Notice". The release of the "Notice" has given companies firm confidence to carry out intelligent upgrades.

However, we still need to give NB-IoT some time to "take over" the application market, including smart homes.