Apple plots home break-in, home automation break-through

WWDC may serve as stage for new platform to put Apple into the 'Internet of Things' mix

Apple will trumpet its entry into the home automation market next week at its annual developers conference, according to online reports.

Analysts today viewed the move as a necessary long-term play for the company to keep iOS, particularly the iPhone, relevant as the buzz phrase "Internet of Things" (IoT) captures mindshare. Apple needs to stay up with the other Joneses, which includes everyone from Google and Samsung to Cisco and Intel, they said.

"If Apple comes through here, it's to be more relevant," said Ezra Gottheil, an analyst at Technology Business Research, who added that to Apple, relevancy means continued sales. "It's absolutely to sell more iOS devices."

Talk of Apple's intentions at the Worldwide Developers Conference, which opens Monday, June 2, hung on a report today by the Financial Times (registration required). According to the newspaper, Apple may unveil a new software platform that would put the iPhone at the center of a smart home, controlling the household appliances, door locks, lighting, security systems, thermostats and other end points in a subset of the IoT universe.

The platform may be similar in ambition to the kind of initiative Apple kicked off earlier this year when it introduced CarPlay, its move to integrate iOS, again the iPhone in particular, with automotive information and entertainment systems.

The Financial Times, citing anonymous sources, said that Apple's platform would make it "easier to set up and control new 'smart home' devices," and that the company has been in talks with manufacturers to certify their products to work with the new system. Apple would then sell those products, much like it does accessories under its "Made for iPhone" logo, in its own brick-and-mortar and online stores.

Gottheil argued that Apple, because of its deep iOS developer bench, would have an advantage in the home automation market; those developers, he said, would be motivated to come up with "some very, very slick things" because of iOS' power amongst high-income consumers, those who have the money to consider tricking out their home.

"A compatible development environment for smart home apps makes a lot of sense," said Gottheil. "Apple has that as a leverage point. An iOS device would be a great way to interface with devices from multiple manufacturers."

He also saw the rumored platform, and its results, as an expansion of Apple's accessories business, which takes up a significant section of the firm's physical stores and gets a big boost from Apple's selection for its online mart.

Apple booked $1.4 billion in accessories revenue in the March quarter, a number that represented 3% of the firm's total sales for the period.

"Having new and interesting things in the store helps bring in traffic," Gottheil pointed out. "And that means more sales of its own hardware."

Patrick Moorhead, principal analyst at Moor Insights and Strategy, had a slightly different take on the home automation chatter.

"The big play here for Apple is to be the epicenter of the home, with their devices as the controller," said Moorhead. "All these things, lights, garage door openers, locks, thermostats, have to have a system that controls it with just one application."

As Moorhead envisioned Apple's strategy, the company would be unconcerned, perhaps even hostile, to other developers creating home automation control apps. It would want that premier spot for itself.

"That would play on the strength of Apple's ability to pull together a high-quality group of hardware and software partners," said Moorhead. "They don't have to build everything, they'd let others do that. But they would integrate everything into one solution, tie all of it together with one app that runs on iPhones, iPads, Apple TV and Macs."

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