What the rise of the ‘smart home’ means for penny share investors

Nest Labs is the first piece of the puzzle for Google

When one technology giant makes what seems like an odd move, it’s just an odd move. When two do it, you start to wonder if they know something you don’t.

But when three do the same thing at the same time?

That’s when you need to sit up and pay attention.

This is happening in the technology sphere right now. Tech companies don’t come any bigger than Google, Samsung and Apple, and all three are now moving in the same new direction.

It’s time for us to take notice. What’s going on here?

Three companies, one new goal

Between them, these firms have done smartphones, TVs, tablets, ad engines, washing machines, music players – you name it, the list goes on. But recently, they have turned their attentions to something else. Something much bigger – the home itself.

They want to make our homes as smart as our phones. Light bulbs, coffee machines, garden sprinklers and heating systems – all controlled remotely,

Here’s what each has been doing…


Back in January, I wrote about Google’s acquisition of Nest Labs – a $3.2bn deal to get hold of a smoke alarm and thermostat maker.

It looked like an odd move to say the least. After all, how many of us will pay over £100 for a smoke alarm when a £5 version will do the job?

But that’s missing the point. This is part of the company’s vision for the future of living. Google didn’t just buy a smoke alarm maker. It bought a tech company that can develop and produce products for a connected, ‘conscious’ home. A place where devices talk to each other – and to you.

For Google, acquiring Nest is just the first piece of the puzzle.


Then there’s Samsung, which already makes a huge range of home appliances and electronics – from fridges and TVs to washing machines and microwaves.

As the world’s biggest smartphone manufacturer, Samsung has the knowhow to get these devices to talk to each other. The Samsung Smart Home Service has just been launched in Korea and the US – it should arrive here later in the year.

The idea behind the service is that you use a single app on your phone or tablet to control a number of connected devices in the home. And if you have their Galaxy Gear smart watch, you can even speak your instructions into that instead!


Last but not least, Apple. Here we have some news fresh off the press.

Yesterday at its Worldwide Developer Conference, Apple finally announced its entry into the ‘smart home’ market.

It unveiled plans to let people use their iPhone or iPad to remotely control thermostats, lights and other compatible devices around the home. The suggestion is that Apple will certify products that work with its app and possibly sell some of them in Apple stores.

Three companies, one goal. Each wants into your home.

So why am I telling you this?

I don’t see yet, dear reader, where the eventual gold rush is going to come here. But it’s clear to me that with some of the world’s best and brightest tech brains on the case, the ‘smart home’ could become a huge new market.

The way these guys are behaving, it’s clear they’ve got some ideas. They’re betting big on this phenomenon. Look no further than Google paying $3.2bn for a smoke alarm maker for proof!

None of the tech giants wants to be left behind on this one. After all, smartphone sales growth will inevitably slow as the market saturates. That’s bad news for Samsung and Apple. And cash-rich Google is always on the lookout for new ventures – think driverless cars and Google Glass.

This all means that we are not so far from a world where, on your way home, you tap an icon to heat the house and turn on the oven. Or begin a washing machine cycle that’s timed to finish just as you arrive.

Build it and they will come

OK, I know what you’re thinking. A smartphone-linked washing machine isn’t exactly the stuff of science fiction.

I mean, would you pay anything at all to switch on your lights remotely? Thanks to electronic timers, you can already heat the oven while you’re out without the internet getting involved!

And does Google really think that we’ll be keen to have adverts beamed onto our fridges and smoke alarms?

But here is the crucial point: once the platform is built, and the door to ‘smart homes’ is opened, all sorts of creative innovation will flow through. Right now, these tech giants are the only ones with the funds needed to, in essence, create a new market.

However, once that market is created, it will invite the bright minds from other creative industries to try their hand.

And that could throw up plenty of opportunities for penny share investors to make money. That’s why you and I should watch this space with interest.


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