IKEA, a new player in a not-so-new market
Searching for new sources of revenue is in the DNA of Internet service providers. One of the most explored areas –certainly thanks to the help of equipment manufacturers- has been the creation of new services for households, which is essentially known as the field of Smart Home. Home automation solutions have however been around for more than 30 years, with pioneer communication standards such as X10 for the house control: heating and air conditioning, lighting control, appliances control and integration, security devices… Despite the attention of service providers and the development of new standards, such solutions haven’t gained much traction in the residential market.
But another player wants to challenge the Smart Home status quo… and it’s not a service provider, nor a telecom equipment manufacturer. IKEA announced recently that it was going to sell smart lighting solutions in European and North American markets. While the field of smart appliances seems a bit far-off the usual furniture of the Swedi company, it will at least keep its identity by using hard-to-pronounce names, as the smart lighting collection includes:
‘TRÅDFRI LED bulbs and remote control, TRÅDFRI gateway kit and app, TRÅDFRI motion sensor kit, several dimming kits, FLOALT LED light panels and SURTE and JORMLIEN LED light doors for BESTÅ cabinets and METOD kitchen cabinets’.
The TRÅDFRI solution (in English, ‘wire-free’) allows the users to manage a light bulb, or a group of them if you own several bulbs as well as the TRÅDFRI gateway, with a smartphone app or by using battery-powered dimmer switches. The TRÅDFRI relies on the Zigbee communication standard between the switches and the light bulbs / gateways (the module also seems to support Bluetooth Low Energy and Thread) and pack twelve LEDs: 6 warm white and 6 cold white ones. As for the smartphone application, it is available on both Android and iPhone devices, but it is still unclear whether it uses a direct wifi connection to the gateway or uses an Internet connection (there is an Ethernet port on the gateway).
Some assets to build on in the smart home race
It is quite tempting to believe the Swedish company may well conquer smart homes with its Scandinavian design and an implantation on the five continents (yes there is actually one IKEA in Africa). First of all, IKEA was able to enter in an impressive number of households with its products. While furniture itself may not represent a significant locking advantage for the company, it does however mean that the public views the brand positively.
IKEA is actually famous for the installation of its products, as they are to be installed by the end user. That’s how they envision their smart home products as well: TRÅDFRI is a plug and play solution, and most likely its successors as well. IKEA’s involvement in the field of smart home is actually a good thing in this regard: it will certainly help households understand it’s within their reach, even though they might not be tech savvy (check the TRÅDFRI’s user manual). And for IKEA, the smart home products probably won’t mean just a gateway or top box that will lie on your desk or shelves, as it will be able to fully integrate it in the furniture it sells.
Like in the case of furniture, IKEA intends to enter the Smart Home battlefield with an aggressive pricing strategy. With a price tag of $79.99 on the US site, the TRÅDFRI kit (2 light bulbs and the gateway) is $50 cheaper than the Philips Hue kit with similar characteristics. The attractive price tag is a key element to understand how IKEA became so successful with its furniture. And in the matter of smart home too, the company will be able to benefit from economies of scale thanks to its existing network.
Is IKEA’s strategy compatible with the Smart Home market?
IKEA’s TRÅDFRI may however not be the game changer that is desperately needed for smart home. Smart home products are often cited as solutions looking for a problem to solve. Will IKEA’s work on pricing and integration compensate the lack of innovation regarding the use case? At this time, nothing allows us to be affirmative. The uncertain need of households for smart lighting solution is one of the key issues in their take-up. Do we really need to use our smartphones to turn on the lights? Are wireless switches that convenient? You will certainly need to screw them in a wall anyway so that they don’t get lost between the sofa cushions like the TV remote.
IKEA has also announced additional launches to come, but are we talking about use cases that are going to be really innovative this time? Products that turn your dishwasher on, your heating system on, or open your blinds remotely aren’t likely to disrupt the smart home market that we see nowadays.
By launching its TRÅDFRI product, IKEA has also demonstrated that it doesn’t intend to integrate a specific smart home ecosystem, be it Google Home, Apple HomeKit, Amazon Echo, or any other one. While that doesn’t mean it won’t be compatible with some of them in the mid to long term, it means at the very least that it doesn’t count on external dynamics in the short term. In fact, IKEA may well want to have its own ecosystem, as it expects its upcoming products will ‘enable people to build onto their smart home solution’. From an external point of view, it seems IKEA’s overall strategy is more about controlling its end-to-end supply/production chain, and less about having to make compromises with partners within an ecosystem. Unfortunately, this strategy hasn’t proved very efficient in the smart home market: just look at how little access providers have achieved despite trying for years…