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Busy Bees in the Hive: British Gas’s Connected Homes Introduces Hive 2

by William Ablondi | Jul 16, 2015

UK Households Willing to Pay for Selected Smart Home Capabilities

British Gas released details of its much needed Hive Active Heating refresh calling it by the same name, but with a “2”. While Hive 2 is much better looking than the original thermostat, just as interesting are the products that will follow: smart plug, motion sensor, door/window sensor and light bulb. We think they need a camera too. The Connected Homes group revealed that it has about 200,000 Hive 1’s installed; that’s up from 150,000 at the end of this past January. This translates into about 10,000 installs/sales per month… very respectable and well ahead of the 40,000 to 50,000 Nest thermostats we estimate have been installed in the UK.

We believe design is critical for success in the Smart Home market, a dimension that has been overlooked by many participants. (Not August, Honeywell (Lyric), Nest or Tado⁰, but most others.) We base this on our extensive consumer research in the UK, as well as, France, Germany, Italy, Spain and the US. Those consumers most likely to adopt Smart Home products next care about how they look, because they care about what their homes look like and they invest in their homes to make them look better. See our recently published Global Insights from Strategy Analytics’ Smart Home Consumer Survey

Our research also tells us that consumers don’t rate ‘energy management’ as the top application they are willing to pay for. Monitoring their home with devices such as the sensors BG is introducing rate highly; monitoring with video cameras rates even higher. Energy management as a standalone application is not sufficient, and BG recognizes this. BG’s challenge is to extend their “Energy” brand to other applications in the Smart Home. And that’s why BG created the Connected Homes group based in the heart of London’s Soho district; not in British Gas’s headquarters location, Staines. And they brought in a new team not tied to the utility business… a bold and necessary move.

Back to the numbers… BG technicians make 44,000 house calls daily…44,000. That’s a BIG number. This is an advantage most companies targeting the Smart Home market in the UK (and elsewhere) don’t have. The Connected Homes group is leveraging this potential sales force, but likely not as effectively as they will in the near future. It takes a while to get boiler installers excited by new gadgets they’re not familiar with. We expect they will become ever better Hive evangelists in the future. This sales force, plus the new design (by the same designer that did the August lock, Yves Béhar, Founder/Chief Designer of Fuseproject) and some home monitoring capabilities to complement the space and water heating applications are likely to increase installations to 275,000 to 300,000 by the end of 2015.

What’s missing? A camera… perhaps a partnership with D-Link could fix this J. That’s our two pence!

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