In the next phases of the smart home surveillance camera and doorbell markets, it will be less about how sharp their hardware “eyes” are and more about how sharp their software-powered “brains” are. A new power trio – component makers, software developers, and applications delivery platforms – will take the keys and step into the driver’s seat.

This will be a huge sea change for camera and doorbell markets globally where growth has been partially tied to the latest image processor or camera lens. And there’s evidence the sea change already started.

In our latest Insight, “Smart Home Camera and Doorbell Markets – Value Creation not Just Feature Updates”, we assess how this new power trio will turn the smart home status quo upside down.

Big consumer brands like Arlo, Nest, and Ring, as well as interactive security companies such as ADT, Alarm.com, and Vivint are already well on their way in this regard. These companies are setting the tone as far as implementing trainable facial recognition, package detection, object tracking, and human detection into their video doorbells and across their entire camera portfolios and making them available on multiple generations of camera and doorbell models as unlockable features. Not quite smart home-as-a-service, though inching closer to that concept.

The hardware that provides higher-resolution video, clearer full-color night vision, and a wider field of view will still be important, just as camera lenses, battery life, and processor speeds are still important to smartphones, for example. However, as with smartphones, smart home cameras and doorbells will soon be evaluated on how intelligently and autonomously they act on the data they observe and collect.

Any smart home device business, not just cameras or doorbells, that relies only on hardware differentiators is not sustainable and will eventually collapse as components once reserved only for premium brands become available to all. Thus, creating sustainable businesses built on software-enabled features will emerge as a focal point for many companies. With smart home device commoditization inevitable, the competitive advantages of enhanced capabilities enabled by software and embedded intelligent components are too prominent to dismiss.