Smart Home – A Matter of detail.

Matter only goes so far.

  • The new Matter standard has the potential to end the fragmentation and incompatibility of the smart home but even with all of the big digital ecosystems supporting it, there are limitations and scope for substantial complexity to damage the user experience.
  • Matter is an application layer protocol which was created to address the issue of interoperability between different smart home systems and devices.
  • It was created by the Connectivity Standards Alliance led by Silicon Labs and version 1.0 was made available earlier this month.
  • Matter is of most interest because all of the big digital ecosystems that are active in the smart home have decided to adopt it.
  • Samsung with its SmartThings ecosystem is the latest to move ahead with Matter and will be using it to ensure that its products work well with Google Home and vice-versa.
  • Although Samsung says nothing about Apple and Amazon, the fact that it is adopting the standard will mean that its devices should also work with Siri, Alexa and their respective apps for controlling the smart home.
  • However, this is where things get complicated because Matter 1.0 is a specification and not a piece of code.
  • Specifications tend to be written in English while code is written in a language that a computer understands meaning that there is scope for interpretation during coding which often leads to fragmentation.
  • Furthermore, the digital ecosystems all compete with each other for the user’s attention in order to drive loyalty or revenue, and so there is an inbuilt incentive to ensure that some things work better in one’s own app as opposed to the app of a rival.
  • This is already emerging in the Matter 1.0 specification where its creators admit that while Matter will cover the basic functionality of devices, it is unlikely to cover all of the features on offer.
  • A simple example would be a light bulb where Matter supports turning it on and off from anywhere but to get it to cycle through the colours of the rainbow, one would have to use the app of its native ecosystem.
  • Hence, even in the best instance, Matter is not going to mean that users will be able to control all the features of their devices from one place, but it will simplify the current mess and make it much easier to add devices and access their basic functions.
  • It is also not going to be backwards compatible with existing devices but there are solutions whereby older devices and systems that don’t support Matter can access it through software bridges.
  • The practical upshot of this is that Matter is going to help reduce the fragmentation in the smart home and make it easier for devices to be accessed by all of the digital ecosystems, but it is not going to solve many of the issues that plague the smart home.
  • Furthermore, the digital ecosystems will still want to ensure that users stick with their apps rather than the apps of others meaning that they will have an incentive to ensure that the interoperability is not perfect.
  • When this is combined with the real possibility that fragmentation occurs as a result of how the specification is expressed in code it is not hard to see fragmentation occurring.
  • The net result is that users are likely to still be making a choice between one ecosystem or another in the smart home and here. Amazon has the advantage.
  • This is because it has more users and more devices than anyone else and attempts to dislodge it even with superior products have been unsuccessful.
  • Hence, I still think that Amazon is ahead in the smart home, but Matter should help level the playing field a little bit.
  • It will also make the smart home more accessible for consumers meaning that uptake of products and services generally may improve meaningfully from where it is today.
  • This is good for all of the ecosystems which I suspect is why all of them have signed up for it as uptake to date has not fulfilled anything like its promise.
  • Matter should get this issue a little further down the road.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.