Best Buy is planning to sell a smart home hub via a service called Peq, based on videos posted to a Peq channel on YouTube, and confirmed by sources in the smart home sector. Finally, one of the worst kept secrets in the home automation world is out thanks to David Zatz who discovered the YouTube videos outing Peq and what looks to be a service plan.
This makes Best Buy the fourth major retailer with a hub and home automation play following Lowe’s Iris, Staples Connect and Home Deport’s partnership with Wink-Quirky. The retailer will be one of several distribution points for the Peq service, according to Ted Schremp, who is the CEO of Smart Home Ventures, the company that provides the Peq service.
A bit about Peq
In an interview this afternoon, Schremp explained that Peq is more than a hub, it’s a service, which is why it comes with the $9.99 monthly fee. The idea is that Peq makes setting up and operating a home automation and security system so easy, it’s worth the charge. Customers will also shell out $120 for the hub and one window and door sensor or other packages already on sale on the Peq web site. Or they can wait for it to launch in actual stores in the coming weeks and months to see the devices and hubs for themselves.
The hub will only have a Wi-Fi and Zigbee radio inside, and devices that are supported by Icontrol’s software platform will be the only supported options as first. However, the company does plan to support devices that use Wi-Fi and cloud-based functionality in time. Those devices could include products like the Philips Hue lights or the Chamberlain MyQ garage door opener for example.
Schremp defended the hub’s paucity of radios saying that the goal was to make home automation simple for consumers, and having a variety of radios like Zigbee andZ-wave added complexity. “You are basically then operating two mesh networks in your home,” he said.
The broader picture
With Peq offering a monthly service plan that puts Best Buy’s offering in the same category of Lowe’s Iris, which also charges $9.99 per month for features that link multiple devices together and go beyond a certain number of alerts each month. Of course, the number of hubs on the market is proliferating daily, as are the number of ways one can purchase elements to build a smart home.
It’s something I’ve covered in depth, but on Thursday I saw research from Parks Associates estimating that nearly 4 percent of U.S. households will have a smart home controller by the end of 2014, with an estimated increase to nearly 6 percent by 2015. But the value is less in these controllers than in becoming the platform that controls all of a home’s connected devices.
Today, that means a hub with good software, which so far is tough to find. But in the future it may be less about a hub and more about a meshed network of devices (albeit some devices with enough processing power to handle a lot of data flows). Google’s Nest developer program seems closer to this model. It’s possible Apple may take that route with HomeKit using the iPhone or iPad as the processing power.
That’s why retailers, ISPs and various tech firms are trying to bring developer programs and hubs to market. The hub is a trojan horse to sell your automation software and platform. Peq is using iControl as the integrator on the back end, much like Staples Connect relies on Zonoff for its integration and software. Since we’ll have Bob Hagerty, the CEO of Icontrol at our Structure Connect event in October as well as buyers from Staples and Lowes, I’m sure Peq and the retail strategy is something that will come up at the event.
Hubs can help retailers
Meanwhile, Peq’s marketing suggests that the hub is from Netgear, and that it will support a branded thermostat and cameras as well as Visonic sensors. I’m not a fan of the service fee, especially given the number of hubs available on the market that don’t require a fee, but the marketing video shows some complicated conditional rule setting that would let you take a picture, turn on the lights and send a text alert when someone comes in the door, so maybe if the software is amazing people will buy it and keep paying monthly for it.
And according to a Peter Gerstberger, Director/DMM, new business development at Staples, the chain is excited about the results from in-store tests. He mentioned in an interview earlier this summer that one of the advantages of selling the Connect products is that they have higher margins than the typical tablets and phones that comprise the other in-store electronics.
He also said the average Connect platform user plays with the app or hits the Staples web site at least eight times a day and on average connects six to seven devices within the first two months. If Best Buy can make a dent in that market and enough people buy it, that could provide a real boost.
From my testing of these hubs, I’m in agreement with Zatz; the Staples Connect device currently has the best mix of device support and usability although I love SmartThings for it’s vision and openness. In a few weeks I guess I’ll see what Peq brings to the table.
Update: This story was updated throughout at 1:20 pm after conducting an interview with Ted Schremp of Smart Home Ventures.