New technologies are in place, but smart home 2023 is still dangerous

Overall, the smart home market in 2022 shows signs of "lifelessness", and the sales of smart speakers in the once "shoulder" category have fallen endlessly, and although other sub-categories occasionally have some bright performance, they still cannot make too many waves overall.

(Image source: Veer)

By the end of 2022, the official arrival of the Matter agreement has given major manufacturers an opportunity, and they also mentioned in our interviews with leading manufacturers such as Oribo that they hope to enhance brand influence and achieve better results in the new smart home competition environment with the help of the market opportunities brought by the emergence of the Matter agreement. Looking forward to the smart home market in 2023, it is conceivable that whether the Matter protocol can respond to everyone's expectations has become the key, but in addition to this, there are still several "mysteries" in the smart home market in 2023 that need to be answered, the turning point of the rise and fall of the entire industry, or in these keywords in 2023.

Matter

Although in the eyes of the industry, the official appearance of Matter may be to reshape the definition and change of the industry, and its historical significance may be no less than that of the powerful Qin Dynasty 2,000 years ago. But in fact, after the official launch of Matter 1.0-enabled devices, we haven't seen any changes in the entire smart home industry in the past few months. Of course, it can be understood that "Matter 1.0 has not yet been launched", but some manufacturers do not have a positive attitude towards the arrival of Matter 1.0, believing that the industry will still operate as before, and will not change due to the arrival of Matter 1.0.

In the previous 2022 smart home annual inventory article, Xiaolei made this assessment of the current situation of the Matter protocol:

But judging from the performance of brands in the second half of this year, everyone's support for Matter seems to be a bit "duplicitous": many brands have announced that they will extend their support for the Matter protocol, and some brands have even only added support for the Matter protocol in the so-called "overseas version". As a "lone wolf" in the smart home industry, Apple even only provides Thread network support on high-end Apple TV.

In layman's terms: if you want to use Matter, you have to add money.

In other words, on the one hand, there are indeed some manufacturers such as Oribo who are actively accessing the Matter protocol to enhance brand influence, but on the other hand, there are also a considerable number of manufacturers who are in a wait-and-see attitude towards the Matter protocol. As for which faction it is, it depends on the brand's position in the market: the head brand wants to maintain its ecological barrier, while the mid-waist brand hopes to use the Matter agreement to defeat the "class solidification" and give itself a better chance of becoming a giant.

(Image source: CSA Association)

It is foreseeable that whether the Matter protocol can be truly popularized in 2023 will determine whether the smart home industry can truly unite and quickly popularize. At the same time, when ecological barriers no longer exist, market mergers and phase-outs will naturally accelerate, and in 2023 we may see more companies be relentlessly impacted by the market and reshuffle again.

But if the Matter protocol is still not supported by most manufacturers and is shelved, then the smart home market will not change anything, and the situation of going your own way and doing things separately will not change. If you want to face the chaotic and disorderly status quo of the industry, I believe it is difficult for consumers to raise interest in trying what "cutting-edge technology".

Wi-Fi 7

In 2022, Wi-Fi 7 technology is beginning to appear, although it is far from popular, but on some smartphones and chips, we have been able to see the figure of this technology, and some head manufacturers have also announced adaptation plans. Compared with the current mainstream Wi-Fi 6 (6E) technology, the biggest advantage of Wi-Fi 7 is the great improvement of data throughput, with the blessing of 320MHz bandwidth, 4K QAM, enhanced MU-MIMO and other technologies, the highest theoretical rate of Wi-Fi 7 can reach 46 Gbps, which is more than 3 times the highest theoretical rate of Wi-Fi 6.

(Source: TP-Link)

In the eyes of the industry, Wi-Fi 7 is likely to be a new technology as important as Matter, Matter as a connection protocol determines the upper limit of product compatibility, and Wi-Fi 7 as the underlying technology of connection determines the lower limit of product experience: it can greatly improve the information exchange ability between IoT devices (such as text information, picture information, video information, etc.) within a certain range, and the multi-device experience is more unified.

In 2023, with the improvement of relevant laws and regulations, we may be able to see some products in the Chinese market that support Wi-Fi 7 technology, or even use Wi-Fi 7 technology as the core selling point. However, limited by the popularity of Wi-Fi 7 transmission technology in China and consumers' willingness to upgrade, such products will obviously not become mainstream. Moreover, the popularization route of Wi-Fi 7 technology must be led by smartphones, and the volume of IoT products cannot promote the rapid popularization of technology, and it is naturally not a selling point.

Cross-end systems

In 2023, "cross-terminal system" may be a very hot term, and the IoT ecological occupancy war set off by smartphone manufacturers is about to break out. In the past, IoT vendors may have given little consideration to the value of cross-terminal systems, because the connection between IoT devices is a simple connection, and the devices perform their own functions, as long as there are no errors. However, when smartphones are involved as a core role, how to carry out stable and convenient unified management and rapid scheduling between devices has become very important, so smartphone manufacturers take the initiative to build cross-end systems, hoping to build a more user-sticky product ecology based on the system.

In 2022, in addition to OPPO's clear proposal of a cross-terminal system called "Pantanal", Honor also emphasized the experience upgrade of multi-device collaboration and information interaction in the MagicOS 7.0 system, which shows that the focus of its system construction has transitioned from smartphones to "smart devices".

(Image source: OPPO)

In 2023, with the arrival of highly compatible protocols such as Matter and other connectivity technologies, IoT devices will communicate more closely with each other, so more mature, stable, and feature-rich IoT connectivity systems will have higher demand, not only in the smartphone industry, but also in the smart home industry.

Smart speakers

Once upon a time, smart speakers were the forerunners, bellwethers, and masterpieces in the IoT industry, but in 2022, that has changed. On August 3, 2022, IDC, an internationally renowned data institution, released the latest "China Smart Speaker Equipment Market Monthly Sales Tracking Report". Data show that in the first half of this year, China's smart speaker market sales were 14.83 million units, a year-on-year decrease of 27.1%; The corresponding sales were 4.2 billion yuan, a year-on-year decrease of 16.2%.

Based on the pivotal position of smart speakers in the entire IoT industry, this sales situation actually sends some bad signals: the "center" in the IoT industry is about to change. The IoT ecosystem has always been built without central hardware, and until now smart speakers have played this role. However, with the enhancement of network conditions and the optimization of connection protocols, the concept of "center" in the IoT ecosystem has been greatly weakened, as long as it is not a small device with a single function such as an anti-theft device, smart TVs, tablets, and mobile phones can become ecological centers.

(Image via UNsplash)

At the same time, the emergence of another emerging category "smart central control screen" has also made the central position of smart speakers more precarious, and in 2023 we are very likely to see a further decline in the market share of smart speakers, and even withdraw from the historical stage.

But for manufacturers, the failure of smart speakers does not seem to affect their overall plans. In the final analysis, the biggest value of smart speakers is actually "as a carrier of intelligent voice assistants", although smart speakers are not selling well, but intelligent voice assistants have long completed the rebirth of other carriers, from smart phones in smart cars, they can be seen everywhere.

Therefore, with the decline of smart speakers, the discussion about "smart home central devices" will also come to an end, and even enter the era of "decentralization". But at the same time, IoT devices will become "everything is the center" products, pushing the user experience to a whole new level.

Whole house intelligence

In 2022, "whole house intelligence" has experienced changes from strange to familiar in the market, and by 2023, whole home intelligence is likely to become an important segment in the IoT track. However, it should be warned that the current leader in whole-house intelligence is not a traditional smart home giant or even a home appliance giant, but a "cross-border player" Huawei. With its strong integration capabilities, Huawei has already launched a series of whole-home smart products covering multiple scenarios and multiple price points, and has relied on its brand appeal to cooperate with real estate giants to occupy a place in the industry.

(Image via UNsplash)

After Huawei, Xiaomi, Midea, Haier and other manufacturers have also followed suit to launch specific solutions, and the whole house smart war is about to break out. In 2023, with the increase in penetration, whole-home intelligence is likely to become a large category, although it cannot yet influence the battle, but it is impossible to ignore.

Personally, I believe that the whole house smart product reflects more of the manufacturer's single-product strength and integration ability, and having a packaging solution can reduce the user's formation and experience costs, making the smart home more acceptable to consumers. In other words, whole-house intelligence will become a "shortcut" for enterprises to quickly establish user loyalty, but at the same time, it will also accelerate the elimination of the industry, and small and medium-sized enterprises that do not have whole-house intelligence capabilities and can only supply single products can only be eliminated by cruel market competition if they do not "find backers".

Did the real "giants" appear?

The last suspense of the smart home industry in 2023, has the leader in the industry really appeared? The smart home track has attracted many enterprises to enter the game, including Apple, Huawei, Midea, Haier and other giant players in different fields, but they cannot become "rulers" in the smart home track and become giants who dominate one side.

Whether or not a "giant" exists is very important for the smart home industry. For a "chaotic" industry, the emergence of industry giants means that there is a clear plan for the iterative evolution of products, and the business model has been certified by the market and entered the stage of sustainable development.

Obviously, there are no real giants in the current smart home, which also represents the uncertainty of many things in the industry, including sustainable profit models, product routes widely recognized by the market, and even future development directions. On the other hand, we often say that "troubled times produce heroes", the smart home industry has great potential and optimistic prospects, at least at this moment, the opportunity to compete is relatively fair for all enterprises. With the landing of Matter 1.0, new technologies emerging, and a variety of product models, we may not see the birth of a true giant in 2023, but we know that day will only get closer.