Give marketing control of the smart home, Deutsche Telekom’s experience suggests

Deutsche Telekom

Deutsche Telekom signed up 100,000 new customers for its smart home service last year, its VP of Connected Home has revealed, largely thanks to the efforts of its marketing department.

Speaking to European Communications at Mobile World Congress last week, Thomas Rockmann outlined how the operator continues to tweak its offering as it looks to ensure it is one of “only a few consumer IoT platforms” that will be successful.

It is now three and half years since Deutsche Telekom launched Qivicon, its smart home platform.

Two years ago at the same event, the operator said fewer than 10,000 customers were using it.

Although Rockmann did not reveal the total number of subscribers it now has, he said the growth is down to taking control away from “the innovation guys”.

He said: “It became big when our CMO decided ‘this is my new fifth category.’”

Of course, “big” is relative.

Amazon is understood to have sold over five million Echo devices since it launched in November 2014 – although they did not go on full commercial sale until September of the following year.

When the Echo launched in Germany six months ago, Amazon’s voice assistant Alexa was integrated into the Qivicon platform at the same time.

“We have to play with [Amazon],” Rockmann says, as part of what he calls Deutsche Telekom’s “two-sided” business model.

Alongside the 100,000 new customers in Germany, Deutsche Telekom has signed deals with a range of providers who have launched a white-label version of Qivicon in four other European countries.

Slovakia and Norway are the latest to come on board after Slovak Telekom and a consortium of regional utility companies in Norway agreed to take the service last month.

Deutsche Telekom has repositioned its offering lately as it looks to add more countries and providers.

“We think we need to position ourselves more as a smart companion for customers,” Rockmann says.

He describes it as a more end-to-end solution that has four “pillars” built around the Qivicon platform.

These pillars are apps – companies can now build their own – devices, open APIs and gateways.

Rockmann suggests the fact that a separate gateway is no longer needed is particularly key to its future success.

A raft of new product partners wouldn’t go amiss either.

There are over 40 currently, including Miele and Samsung, but only around 10 or so have come on board in the last two years.

“It is still in the early market phase,” Rockmann says.

New data from Gartner suggests he has a point.

Only one in 10 households in the US, the UK and Australia have a smart home solution today, according a new study from the research firm.

Gartner polled nearly 10,000 people across the three countries and found that home security alarm systems have nearly double the adoption rates of other solutions, including home monitoring, home automation and energy management.

However, three-quarters of respondents indicated they were happy to manually set temperature and lighting controls.

Monetisation remains a problem, it said.

Less than half of households currently pay for subscription-based home monitoring, automation and energy management solutions.

Garter analyst Amanda Sabia said: "Although households in the developed world are beginning to embrace connected home solutions, providers must push beyond early adopter use.

"If they are to successfully widen the appeal of the connected home, providers will need to identify what will really motivates current users to inspire additional purchases."

Gartner Research Director Jessica Ekholm added: "Messaging needs to be focused on the real value proposition that the complete connected home ecosystem provides, encompassing devices, service and experience.

"The emphasis needs to be on how the connected home can helps solve daily tasks rather than just being a novelty collection of devices and apps."
Rockmann seems to agree with this prognosis.

He says “easy-to-use use cases that can be set up in a few mintutes” are key.

Security-related services are the most popular in Germany, he adds, but it differs from market to market.

“People do not come to shops and ask for this stuff,” Rockmann says.

Until they do, marketing will have to learn to love this nascent technology if operators are to succeed.

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