The home has long been an untapped opportunity for most of the tech industry despite every major company giving it a shot. Amazon offers Alexa products, Alphabet has Nest and Google Home speakers, and Meta Platforms has even tried to tie its messaging products to Portal. Success has varied, but I think it’s clear that none of these tech companies really owns the home at this point.
One big tech company that I think still has an untapped opportunity in the home is Apple (AAPL 4.52%). The company released HomeKit in 2014, and since then it’s been a largely disappointing integration with popular Apple devices. If Apple starts to take the home seriously, it could expand into the $34 billion smart home market and drive another avenue of growth.
The smart home
It’s clear that devices in the home are getting smarter. There are light switches, garage door openers, thermostats, security systems, and more that interact with the smart home today. And the suite of products is growing. What’s been unclear for much of the last decade was what the smart home hub would be. Google’s Nest, Amazon’s Alexa, and Apple with HomePods, Apple TV, and the Home app tried a variety of strategies.
I think it’s clear that the most obvious hub for the smart home was in our pockets all along. The iPhone has the connection and smarts to control the home from anywhere. Apple has moved Apple TV remotes to the iPhone, shortcuts can be made there, and the HomePod and Apple TV integrate easily with the iPhone as well.
While it took a long time to get here, I think it’s clear that even Apple now sees the Home app on the iPhone as the center of the smart home. So how does it make this a bigger market?
The Apple experience
What’s lacking today is the “Apple experience.” Devices aren’t particularly easy to set up, updates are infrequent and can sometimes disable devices, and there’s no cohesive app experience. Often, Apple Home actually sends you to another app to interact with or update devices. This is in part because Apple hasn’t supported device companies in making the HomeKit ecosystem open and easy to use.
After eight years of building HomeKit with relatively little traction, it may be time for Apple to in-house home products. Through acquisitions or Apple’s own development, the company could make a simple lineup of home products that would work seamlessly with iOS, Apple TV, Apple Watch, and HomePods. This would bring the Apple experience to the home and could open up a new growth avenue.
The suite of products needed to make a splash in the smart home wouldn’t need to be big. Smart lights, switches, outlets, and a doorbell/camera would get most people to a great spot in the smart home. And if done right, Apple would literally be installing its products into our home lives.
Why the home makes sense for Apple
Where does a company the size of Apple look for growth? The company is already a leader in smartphones, tablets, and watches, and it has a growing share of the PC market. One area where it hasn’t built a large, sticky business is in the home. This could be a great growth frontier if Apple does it right.