Connectivity expands the functionality of consumer products and can change the dynamics of a market. Apple, for instance, leveraged connectivity to change the music industry with the introduction of the iPod and iTunes, radically expanding the functionality and usefulness of cell phones through connected applications.

Today, single-product solutions are rapidly entering the market, expanding the value proposition of everyday products.For example, consumers purchasing a garage door may choose one that is connected to the Web and provides them with an interface to check the status of the door and remotely open or close it using their smartphone. If their experience is positive, their interest in connected devices will expand, and they will want to add connectivity to other devices in the home.

Those invested in single-system solutions argue that people don't go shopping to purchase a home control and monitoring system. Instead, as they shop for a new appliance or electronic device, they come to understand how their smartphone can be used to remotely monitor and control that new purchase. Interoperability is a secondary concern that emerges when consumers accumulate multiple single-system solutions. Individual functionality trumps interoperability at the point of purchase.

However, consumers do understand and respond to the value proposition of connectivity across systems. Parks Associates reports that almost one-third of U.S. broadband households find remote control of lighting, thermostats and appliances via computers or mobile phones to be highly appealing. Similar percentages find the same appeal to value-added services such as energy monitoring and energy management.

At the same time, retailers and service providers are entering the markets for connected home services, including security and energy management. Bundling energy management with IP services will drive adoption of multi-service home networks to more than 20 percent of U.S. broadband households by 2015. The market is moving toward a home environment with multiple devices, all connected to the Internet, and consumers will expect these devices to be interoperable, regardless of their original intent at the initial purchase.

From the article, "The Connected Home: Radical Change Ahead" by Tricia Parks and Tom Kerber.

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