Smart home devices got a lot of hype in 2016, from in-home assistants like the Amazon (NASDAQ:AMZN) Echo to connected and automated toilet seats. While most of these smart home devices range from under $100 to a few hundred, the Samsung (NASDAQOTH:SSNLF) "Family Hub" refrigerator, clocking in at a cool $5,999 on the high-end model, takes the prize as the most expensive smart home device of the year. Here's what that hefty price tag will get you, and why 2016 looks like just the beginning of a connected home revolution.
The most expensive smart home device of 2016
The Samsung "family hub" refrigerator is not your typical ice box. The 21-inch touchscreen on the outside of the door connects to your home's wifi, and comes preloaded with various apps and features to connect to a user's smartphone. Cameras inside of the refrigerator allow the users to see what's in the refrigerator when they are not home -- like when they're at the store trying to remember what to buy.
Other features include the ability to play music or watch TV, a nice perk to have in the kitchen while cooking, as well as apps that will leave notes for other users, order groceries for you and have them delivered to your home, set reminders and alarms, set expiration reminders for specific food items, and even take a picture every time the refrigerator door is closed to help track food more precisely.
The smart home market is growing up
Does a typical family need a smart refrigerator that allows them to check on the contents of their ice box via connected cameras when they aren't home? Probably not, especially not for $6,000, which is nearly 10% of the average U.S. household annual income. Still, this is an extreme example of a trend that is clearly gaining a lot of traction right now -- the smart home market that takes the "internet of things" (IoT) approach to make everyday devices part of a connected home.
Amazon's Echo smart home assistant and speaker was one of the early concepts of a smart home device that is voice-controlled and can do tasks like turn connected lights and switches on and off, read the morning news, or order an Uber. Google Home, a similar device from Google-parent Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), and a coming device from Microsoft (NASDAQ:MSFT) that uses Microsoft's Cortana voice assistant software are seeking to put voice recognition and artificial intelligence technology at the center of a connected home.
While the use cases are still relatively limited for these smart home assistant devices, mostly just basic commands and information requests at this point, all of these devices are "learning", which means they can get updates from their parent companies and evolve. That and a plethora of new devices that are able to connect to the ecosystem, such as refrigerators, are helping this market to grow quickly.
IoT in 2017
Looking at how much this market has grown in 2016 -- both from the hardware side, with more and more gadgets able to connect, as well as from the software side, with companies like Alphabet, Amazon, and Microsoft working on artificial intelligence -- it seems like that growth will only continue further in 2017. While each new IoT device looks interesting, it's the platform angle of this market to watch to see which company will win the smart home industry.
Android Things is a dedicated IoT operating system (OS). Alphabet is going aggressively after the ecosystem angle, using Android Things as a base for developers to create apps and programs that connect various smart home devices on Alphabet's platform. Microsoft, meanwhile, is trying to make Windows 10 compatible as an IoT OS platform, and while Amazon doesn't have its own OS, it has AWS (Amazon Web Services) bundles that can connect IoT devices together and allow developers a space to create.
Largely absent from the connected hardware side is Apple (NASDAQ:AAPL), one of the earliest artificial intelligence voice recognition makers with Siri, though of course Apple still has the most important hardware at the moment -- the iPhone is still one of the most important connected device hubs. Apple's HomeKit IoT platform earns it a place among the platform developers already, but you can probably count on new announcements from the cash-heavy business about their own play for this market in the coming months.
The IoT market is growing. McKinsey research analysts expect the IoT market to grow more than 30% year over year through 2020. However, investing in this trend might not be as easy as just throwing a dart at a connected wall -- here's a concise 5 point checklist for investing in IoT to find which business has the best chance of succeeding in the years ahead.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Seth McNew owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon.com, and Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.