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Connected Homes August 2014 Viewpoints

Technology Analyst: Kyle M. Whitman

Google Fiber

Why is this topic significant?

Google plans to expand its fiber-optic broadband offerings significantly in the near future. Although Google has not yet indicated how extensive its additional deployment will be, relevant job postings on Google's website suggest that the company is preparing for a large-scale deployment that will cover most or all of its planned areas and potentially transform Google into a top-ten US wireline broadband-service provider within the next one to two years.

Description

Google Fiber launched in 2012; it currently covers select neighborhoods in two major US metropolitan areas and is deploying in a third. Earlier in 2014, Google announced that it would be expanding its fiber-optic broadband deployments to 34 cities across nine metro areas. Although those areas are home to more than 21 million people, analysts and investors have lacked clear signals to indicate the scale of Google's ambitions and its commitment to owning and operating infrastructure. Since the announcement, Google has provided little further information about its expansion plans but noted that the company "hope[s] to have updates on which cities will get [the service] by the end of [2014]."

Frederick Dopfel, a senior research analyst with Strategic Business Insights, recently discovered a surge in job postings related to Google Fiber on Google's careers website, with more than 150 positions available as of late July 2014. Since Dopfel's initial discovery, I have checked the website on four separate occasions and have seen between 130 and 140 advertised positions. Positions have tended overwhelmingly to be oriented toward managing deployment of physical and software assets necessary to run a fiber-based internet-service provider (ISP), as opposed to handling regulatory and land-use matters relevant to ISP deployment.

Implications

Although the job-posting information is not conclusive, the postings suggest that Google intends a substantial near-term rollout of its fiber broadband services that will likely include most or all of the company's metro-area targets. The postings include positions in or for seven of the nine metro areas that Google mentioned in its expansion plans.

In previous fiber-ISP deployments, Google has cherry-picked the neighborhoods in which it has offered service, apparently limiting service to areas where deployment expenses are low relative to expected service revenues. Accordingly, Google's near-term deployments may cover only a small fraction of households in the metropolitan areas into which the company will expand.

Impacts/Disruptions

Nevertheless, Google's fiber-ISP expansion plans do now appear to be moving along at a significantly accelerated rate relative to rates in the past several years. In 2013, investment-banking analysts estimated that Google, if it chose to do so, could feasibly expand its fiber ISP to reach between 7.5 million and 8 million US households within nine years, at a cost of $1.25 billion per year, assuming the company followed its current cherry-picking deployment practices. Assuming that the impending rollout is roughly in line with these estimates, Google could become a top-ten US fixed-line ISP within the next year, with more than 1.2 million subscribers.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years

Opportunitites in the following industry areas:

Home automation, Internet of Things, home security, home broadband connectivity, telework, telecommunications, telepresence, online gaming, cellular networks

Relevant to the following Explorer Technology Areas:

Dynamic Ambient Lighting

Why is this topic significant?

Application-programming interfaces have allowed network-connected home-lighting solutions to acquire novel capabilities. Third-party software applications control network-connected LED lights to create ambient lighting effects that respond to many types of user-defined, environmental, and media-defined parameters.

Description

Network-connected multispectrum LED-lighting systems for homes became popular following the 2012 release of the Philips Hue lighting system, which combines several ZigBee-connected red-green-blue (RGB) LED lightbulbs with a control unit that connects to a home's Wi-Fi router. Early adopters could control their connected lights using an application for Apple's iOS platform, which worked over both local and wide-area networks and allowed users to turn lights on and off individually and to control brightness and color for each bulb. Philips later added support for additional mobile platforms and began offering, free of charge, an application-programming interface (API), together with a software-development kit (SDK), that allows third-party developers to create their own applications for controlling Hue lights.

Since March 2013, when the Hue API and SDK first became available, dozens of developers have created mobile and PC applications that control Hue lights. Most such applications offer functionality similar to that of the default Hue application, but some applications offer novel methods of lighting control that respond to environmental conditions or to the contents of music or video media. For example, Ambify changes connected lights' colors and brightness in synchronization with music playing on the device that is running the application. Goldee causes Hue lights to cycle through various colors present within a photograph that the user selects. Cable network Syfy has recently released a DVD of Sharknado, one of the network's original movies, that, when played back via a PC that is on the same network as a Hue system, modulates lighting to reflect the changing colors of specific scenes within the film. (Modulation is based on metadata encoded onto the DVD, as opposed to algorithmic scene analysis.)

Implications

Many companies have been developing network-connected RGB LED home-lighting solutions to compete against Hue, but thus far, none of these solutions have garnered nearly as much attention from third-party software developers as the Hue platform has done. Availability of an open API and SDK has the potential to help Hue and similar smart-lighting platforms to achieve mass-market status.

Impacts/Disruptions

The relatively modest number of downloads that most advanced Hue applications have thus far received on major mobile-OS marketplaces suggests that advanced user engagement with network-connected lighting systems remains a niche activity. One very significant advantage that Hue has over its competitors is the capability to change color temperature to match many (but not all) forms of "white light" that users might desire. This relatively simple feature does not necessarily require an open API or SDK, but a third-party developer may yet uncover an exceptionally compelling means for performing this seemingly simplistic task. Such capability might well become a "killer app" for network-connected RGB lightbulbs.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Low

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years

Opportunitites in the following industry areas:

Lighting, home networks, home automation, home entertainment, networked gaming, networked entertainment, home displays

Relevant to the following Explorer Technology Areas: