How Apple's iPhones Might Become An Indispensable Piece Of Equipment, Again

| About: Apple Inc. (AAPL)


Apple has unveiled the HomeKit feature for the new iOS 8.

The company will develop a “common protocol” to talk with the devices.

Perhaps Apple is the only company that can do this successfully.

Apple (NASDAQ:AAPL) is moving towards home automation in its drive towards "Internet of things". At the Worldwide Developer Conference held on Monday, the company unveiled a new feature for iOS 8, called HomeKit, which will allow Apple's mobile devices, running on iOS 8, to become a remote control for the smart home devices.

iOS 8 is expected to be released in the fall.

Users can also control an entire group of devices from their iPhones or iPads, rather than focusing on just a single device. HomeKit also integrates with Siri. Therefore, by saying "Get ready for bed", the iPhone or iPad will lock the doors and dim the lights.

Apple hasn't given the details about how HomeKit is going to work, except that it will use "common protocol" to communicate with the devices. Currently, there are hundreds of smart device manufacturers out there, each using its own network protocol for talking with its device.

Several small groups and companies, such as ZigBee Alliance, Revolv and SmartThings, have been giving a one-stop solution to communicate with these different smart devices without any major success.

However, Apple can use its massive reach, with more than 800 million devices running on iOS around the globe, to develop a common protocol. Perhaps Apple is the only company that has the ability to bring all the leading device makers onboard. This way, Apple can propel the growth of home and office automation.

On its website, Apple explains, "Home Kit makes possible a marketplace where the app a user controls their home with doesn't have to be created by the vendor who made their home automation accessories, and where home automation accessories from multiple vendors can all be integrated into a single coherent whole without those vendors having to coordinate directly with each other."

The smartphone maker will start a certification program which can be used to check whether the smart device is supported by HomeKit. Apple is currently working with more than a dozen device manufacturers including Philips, Honeywell (NYSE:HON), Schlage , Haier (OTCPK:HRELY), Texas Instruments (NYSE:TXN) and August. Of these, Haier's air conditioners were the first to receive a certification from Apple.

These devices will have the "Made for iPhone/iPod/iPad" mark.

Moreover, users can control the devices using just HomeKit, rather than hunting for a dedicated app developed by the device manufacturer.

Other tech giants are also tapping into the growing demand of internet of things since, according to IDG, it could become a $8.9 trillion market by the end of the decade.

Google (GOOG GOOGL) has recently acquired the maker of smart smoke detectors Nest Labs for $3.2 billion and is reportedly mulling acquisition of video camera startup Dropcam. Samsung (OTC:SSNLF) has introduced a new range of smart television and refrigerators that can be controlled through a smart phone. Intel (NASDAQ:INTC) is showing robust growth in its internet of things segment. Last year, Microsoft (NASDAQ:MSFT) purchased the home-automation startup R2 Studios.

Interestingly, the names of Apple's primary software and hardware competitors, Google and Samsung, are also making smart devices, were not listed with those device makers who are partnering with Apple. It remains to be seen whether Google or Samsung are willing to have "Made for iPhone/iPod/iPad" printed on their smart thermostats or smart washing machines.

Bottom Line

Through iPhones and iPads, Apple aims to simplify the lives of its consumers. The company has just started the process as the company is currently targeting just the app and hardware developers. It may take some time before it makes any impact on our daily lives. But when it does, Apple's mobile devices might end up becoming an essential piece of hardware for homes.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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