Can Apple Do for Smart Homes What It Did for Smartphones?

To make its smart home initiative work, Apple will need an effort in line with that which created the iPod -- and Apple just doesn't appear to have that capability without Jobs. The recent Beats acquisition appears to be focused on fixing its decline in music, which suggests Apple simply doesn't have the capability even to hold markets it once owned, let alone conquer new ones.

 

Maybe. Apple is rumored to be launching a smart home platform at its developer conference this week. The smart home market is actually in a place that's rather similar to where MP3 players were when Apple launched the iPod, and the iPhone is basically an iPod with phone capability.

The smart home effort is in part about music and video distribution, and iPhones are commonly used as remote controls for both consumer electronics and smart home systems. So I think Apple can do this -- but I doubt it will be successful at it, and I'll explain why.
I'll close with my product of the week: an amazing, though not inexpensive, IR scanner you can use to locate where you're wasting energy.

The Problem

Much like the MP3 player market was before Apple took it over, there is no large dominant player driving the smart home market at the moment. The firm I used to automate my home is arguably the best and most comprehensive. Insteon's platform isn't that well known, however. Microsoft's recent effort to partner with it helps, but Microsoft doesn't have the power it once did, and the result is just now hitting the market.
There's a massive number of additional standards floating around in the market at the moment, most of which don't interoperate well. Creating and using smart home technology is more like conducting a science experiment, at the moment, than it is about developing a user-friendly solution. In other words, this is likely an ideal market for a company like Apple to take over.

The Competition

There are three other major companies chasing this opportunity. Perhaps the scariest is Google, which would get unprecedented access to your personal behavior from this and could subsidize the result aggressively into an offering that a product company would have a hard time matching. Unlike the history of smartphones, Google isn't lagging but leading Apple into this market with its NEST acquisition. It recently bypassed Apple both in brand value and in mobile device market share, suggesting it can move faster -- making it impossible for Apple to catch it from behind.
Microsoft is partnering with the firm I believe is the current smart home market leader (Insteon clearly has an advantageous brand). It has a solution that is far more complete than Google's, ranging from switches to integrated sensors and cameras. Microsoft also has new leadership and a vastly more optimized structure, which should allow it to compete more aggressively than it did in the last decade.
BlackBerry has the QNX operating platform, which is near dominant in commercial automation. It is widely used in efforts ranging from manufacturing to nuclear plant automation, as well as in automobiles. It is arguably the most mature and secure effort, and both maturity and security could be huge competitive advantages in a market concerned about attackers gaining access to cameras to violate privacy -- or worse, carrying out home invasions. BlackBerry is aggressively going after this opportunity as a major part of its turnaround effort.

Wrapping Up: Why Apple Likely Will Fail

Jobs personally drove the effort to capture the music market and then drove that success into smartphones. The video effort that followed while he was ill and after he died largely failed to corner the video market, and Netflix, Amazon and Google became stronger as a result.
To make its smart home initiative work, Apple will need an effort in line with that which created the iPod -- and Apple just doesn't appear to have that capability without Jobs. The recent Beats acquisition appears to be focused on fixing its decline in music, which suggests Apple simply doesn't have the capability even to hold markets it once owned, let alone conquer new ones.
So, while the timing is excellent, the unique capability that created dominance in music -- which would be critical to its success in home automation -- just doesn't seem to exist anymore, and that leaves the market open to others that are better funded (Google), better positioned (BlackBerry), or have better partnering skills (Microsoft).
Apple still could pull a rabbit out of a hat -- but since Steve died, there has been a severe lack of Apple rabbits and Apple hats. For its rumored smart home effort to succeed, it would need to find both.