This Is How Apple Inc. Converts the Masses to New Tech

It's only been a few weeks since Apple (NASDAQ: AAPL  ) announced its new HomeKit platform -- the home automation system that lets iOS users control lights, cameras, door locks, etc., with voice commands -- but the company made it clear in a new ad how much it wants customers to adopt the connected home platform.

Making HomeKit feel like home
In the new ad there's a series of snapshots with parents playing with their kids at the beach, finding a lost dog, calming a crying baby and other young parent responsibilities. Through all the chaos and fun the iPhone is shown assisting with these things, including tracking how well garden plants are growing, turning off the lights when a baby falls asleep, or acting as a video baby monitor.

Take a look for yourself:

Credit: YouTube

As with many of Apple's products, the ad shows that HomeKit -- and all the devices that will connect to it -- isn't just for the technophiles out there, but for people who don't have time to tinker with technology. The focus is on how the iPhone easily brings all these things together, and how it makes a users' life a bit easier.

Apple's HomeKit. Source: Apple

Why this matters
Apple knows it needs to market HomeKit this way in order for home automation to take off. Right now some consumers may wonder why they would want to connect their iPhone to light bulbs in their home and this ad helps to clarify that.

The home automation space is heating up quickly with Google's Nest acquiring the home security camera company Dropcam earlier this month and launching its own system that ties separate home automation devices together on one platform. Google knows how important the connected home will be, and the two companies are about to go head to head in the space

Foolish thoughts
It's hard to put a finger on exactly how much Apple's upside could be from HomeKit, as home automation is just getting started and the company isn't currently selling any connected home hardware. But the big push for Apple, even if it does release some connected home product, is to use the iPhone and the iPad as the go-to devices to power the home -- and that could help push sales of the devices higher. But the company may not stop there. 

According to 9to5Mac, Apple is seriously considering new hardware releases for the home market. The site mentioned in a recent article, that, "The Cupertino-company is said to have assembled a team to work on various hardware products for the home that deeply integrate with the existing array of Apple devices on the market..." For a company of Apple's size it's not unusual to test out lots of products, but Apple is expected to be "beyond the exploratory phase of development." While it's still unclear which products this could be, rumors of a home stereo system or a control panel for connected homes have surfaced.

Apple would be smart to introduce some home automation hardware. A new Transparency Market Research report says that the home automation market will reach $16.4 billion by 2019, up from a value of just $3.6 billion in 2012. And it's not jus the size of the market that Apple could tap into.

I think one of Apple's advantages is that is has a very strong developer network and 41.6% US smartphone market share. Because of this, many developers create apps for iOS first, and the same process could play out when making devices that are compatible with HomeKit. While Google has avery strong presence in the US it's much more fragmented than iOS, and that could hurt device compatibility across Google's platform. 

Whether Apple creates its own hardware or simply leans on its HomeKit platform and third parties, it's clear the home automation market is about to take off -- and Apple's in a prime position for it.  

Apple may have something up its sleeve, literally
There's no shortage of rumors about an Apple iWatch, and investors are eagerly anticipating this fall to see if all the speculation proves true. But there's one small company that may be making Apple's new watch possible, and it already helps power some of the latest wearable technology on the market. To find out this stock stock, and how it cold change the wearables space, click here!

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  • Report this Comment On July 01, 2014, at 4:43 PM, Bravadu wrote:

    The 41.6% marketshare on paper actually becomes far higher and more valuable once you consider device compatibility and also if the end user is actually willing and able to dish out hundreds and thousands to automate their homes.

    But I don't see why a manufacture can't cater to both markets with the same product - just make both an ios and android app.

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Chris Neiger

Chris has covered Tech and Telecom companies for The Motley Fool since 2012. Follow him on Twitter for the latest tech stock coverage.

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