Are You Ready for the Smart Home Race?

It seems everything must be smart and connected these days -- people, phones, cars, buildings, electrical grids, and even our homes. Entire smart niches are being carved out, and everyone up and down the electronics supply chain seems to want a piece of the business.

Chip suppliers like NXP, Intel, and Dialog Semiconductor, along with utilities and multinationals like General Electric, are introducing platforms and technology that can create machine-to-machine communications between lights, washing machines, TVs, refrigerators, and pretty much any other home appliance.

There was even a Smart Homes 2011 conference this month in Amsterdam for smart home pioneers and smart metering experts, and companies like Google have developed projects to demonstrate the usefulness of energy monitoring. In the last few days, my eyes have landed on headlines about phone companies and mobile service operators elbowing into the smart home space.

Germany's Deutsche Telekom AG (NYSE: DT), for instance, is talking with Asian and US electronic device and appliance OEMs about jointly boosting services to manage data exchange between networked household machines. According to Businessweek, Europe's largest phone company is having conversations with "big name" Japanese and Korean companies on smart homes. It is aiming to generate a billion euros ($1.3 billion) of sales by 2015 from such machine-to-machine services.

In the US, Verizon Communications Inc. (NYSE: VZ) is offering a Home Monitoring and Control Service, which was unveiled this year at the 2011 Consumer Electronics Show. For $9.99 a month, the service will let customers "remotely check on their homes and control locks, lights, thermostats, appliances and energy use." Here's a video showing how this works:

Monitoring household activities, energy use, and whether the coffee maker is off and won't burn your house down makes some amount of sense. Knowing what's going on allows people to take corrective steps and make choices about the way they use -- and save -- energy, which the environmentally-friendly side of me says, "Right on!"

Naturally, too, a number of companies will have to be involved to make such initiatives mainstream. Appliances need to be designed with chips and sensors that respond to household changes and feed information to utilities. Deutsche Telekom, Verizon, and companies like these have established relationships with the end-user, so it's probably logical that they extend their reach to interface in this way, too.

But -- and there's always a but -- it's not clear how many consumers need this service or really even want a smart home. For me, it feels a little too much like Big Brother, and being an urban dweller, I'm not particularly comfortable having all the data about my household's machines and energy-related activities floating around in the cloud, in cyberspace, or on some company's server waiting to be hacked.

The price point seems affordable, but it may be hard to convince people, especially now on the edge of another economic dip, that it's really worth it. I already track my energy use the old-fashioned way -- by reading the bill when it arrives -- and I would like to know that I would be saving much more than $10 a month through all this interlinked machine data.

Then again, maybe what companies are selling is peace of mind and the ability to turn on a light automatically before you fling open the door. I guess there's value in that. In any event, there are business opportunities here for companies supplying components for these products. If your company isn't already in this space, figure out what's holding you back, research the market potential, and ask if you're being left behind.