Chipmakers Will Make Homes Smart and Investors Rich

Wouldn't it be nice if you could control all the light switches and other electronic peripherals in your home using one single control unit?

Google (Nasdaq: GOOG  ) has recently announced plans to make the Android OS the hub for various remote access and control systems, including a "smart home" system. In a smart home, things like electrical appliances and lighting could be controlled from a central dashboard, a smartphone, or a tablet PC. Chipmakers, which put the brains into these smart homes, could do some brisk business from this revolution.

Home sweet Android home
Google is all set to enter your home. At the Google I/O, the company unveiled elaborate plans to take the market for "smart home" products by storm, including LED bulbs that can be controlled from an Android device. Instead of using available home-automation protocols or Wi-Fi, it uses its own wireless protocol, which is meant to prevent it from interfering with other networks. 

Next is NXP
NXP Semiconductor
(Nasdaq: NXPI  ) has announced that it will manufacture IP-based light bulbs. In partnership with home-energy management and automation systems company GreenWave Reality, NXP is going to build remote lighting systems for homes and monitoring systems for control of various appliances through a network.

Let there be LED
While LED lights are slowly being brought into homes and businesses, good LED light quality comes only from the costlier fixtures. To improve the quality of light from LED sources while reducing costs, thereby improving their chances for widespread adoption, chipmaker Marvell Technology (Nasdaq: MRVL  ) has introduced a notable idea.

The company's dual-string smart LED controller chip, called the 88EM8801, can increase the lighting performance of LED lights. According to the company's press release, the Marvell chip can reduce costs of LED lighting by reducing component expenses. In addition, it allows installation of a wireless chip into the bulb, and the chip can enable wireless control of the bulb from a central point.

General's lieutenant
General Electric
(NYSE: GE  ) is set to unveil LED edge-lighting fixtures, which are meant to replace fluorescent tubes with thin plates of light. Chipmaker Rambus (Nasdaq: RMBS  ) has teamed up with GE to manufacture flat textured panels for office use. The license agreement between the two companies allows GE to use Rambus' lighting technologies and expertise in manufacturing its LED fixtures. The Edge LED fixture will have a longer life than fluorescent fixtures and will be much more energy-efficient.

Foolish take
Chipmakers are betting big on "smart home" fixtures and green technologies such as LED lighting. But before these technologies start to become as common as the light bulb currently is, costs will need to be cut drastically.

The challenge that stands before these companies, however, is not just one of cost-cutting. As with all other forms of technology, the market for "smart home" appliances has already started to get crowded. Companies such as Cisco (Nasdaq: CSCO  ) and Schneider already have several products available in the market. The challenge is, therefore, to carve a niche while keeping energy efficiency and costs in perspective. Only time can tell how that works out.

Fool contributor Arunava De owns no shares of the companies mentioned in this article. The Motley Fool owns shares of Marvell Technology Group and Google. Motley Fool newsletter services have recommended buying shares of NXP Semiconductors and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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