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Wink: The $0.99 Hub! What’s the Business Model?

by William Ablondi | Aug 15, 2014

Those tracking the Smart Home market have seen a plethora of DIY systems debuting recently – Wink among them. It’s beginning to get difficult to differentiate them. Revolv emerged in 2012 as Mobiplug, well before the latest wave hubs, with seven radios and a clever “Flashlink” technology for automatically syncing the system to one’s WiFi router. There’s the Iris system from Lowe’s, Staples Connect, Wemo from Belkin, Oplink, INSTEON and Gigaset’s Elements in Europe to name a few. Stay tuned for our upcoming refreshed Smart Home Systems and Services: Completive Landscape database to be published later this month which will update you on these and 190 more companies in the market.

Wink is no slouch when it comes to radios: Wi-Fi, Bluetooth Smart (BLE), ZigBee, Z-Wave and Lutron’s Caseta. But the really interesting point about Wink is its business model. I was fortunate to catch CMO Brett Worthington earlier this week during his busy launch schedule to give us an update. I had seen the promotion on Amazon and The Home Depot for a reduced price for the Wink hub to $50 from $80 if you buy before September 3rd, $25 if you buy one compatible device and to $0.99 if you by two… of course until the 3rd of September.

So my first question to Brett was: “What’s your business model?” Now that’s like asking someone on the street: “How much do you make?” So I knew it would take more prodding. What I learned is that Wink is a Big Data play. They’re not going to collect usage data and sell it to advertisers or the retailers they sell through (THD and Amazon are just the first). They will use the information gleaned from usage data to help their manufacturing partners build better products.

OK, I know they’re not a not-for-profit so how are they going to monetize this information? Answer, steeper licensing fees. So which companies are buying into this proposition? Well, the initial list of 15 is pretty impressive:

  • Bali – motorized window coverings (powered by Somfy)
  • Chamberlain
  • Dropcam
  • GE
  • Honeywell
  • Kidde
  • Kwikset
  • Leviton
  • Lutron
  • Philips – Hue smart bulbs
  • Quirky – 4,000 inventions pass through every week! WOW!!
  • Rachio – smart irrigation controller
  • Rheem – HVAC and water heaters
  • Schlage
  • TCP – Store-brand 6LoWPAN bulbs

…and there are more to come including insurance providers, more retailers, and of course more manufacturers too.  Some vendors will be considered strategic to Wink’s long term goals so … that’s a different deal.

·         Will Wink offer premium services and charge a fee? “No…never!” says Brett.

·         Will Wink sell data to the retailers so they can cross sell other products? Ditto!

So I see Wink competing based on their business model more than their feature set. This is something I’ve been espousing since seeing a presentation from a Bosch conference in Berlin earlier this year (See my Blog entry February 25th).

With that said, Revolv, SmartThings and others are working their business model parameters to come up with innovative ways to compete too. Who’s winning? See my current take in the US : Handicapping the US Smart Home Horserace. More to follow on the Western European market.

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