Apple Is Building Homes With Connected Devices (AAPL, GOOG)

Apple Inc. (AAPL) is teaming up with home builders to promote HomeKit, its iPhone and iPad app for connected home devices.

According to a Bloomberg report, Apple has joined hands with “a handful of builders” to integrate a connected device ecosystem into the houses they are building. “The best place to start is at the beginning, when a house is just being created,” according to Greg Joswiak, Apple’s vice president for product marketing, who is quoted in the story.

As an example, such homes are fitted with automated blinds and baby monitors that trigger a coffee brew process in kitchens. The price tag of such homes bumps up with the integration of connected devices. Based on a reading of the Bloomberg story, that increase could range anywhere between $2000 to $30,000. “The gamble is that pricey wireless home devices will be an easier sell when bundled into the home itself,” the story’s author writes. (See also: Is Making Your Home Smart A Dumb Idea?)

The connected home market is expected to explode in the coming years. But the market is yet to mature and faces several problems, such as the absence of an Internet of Things standard to enable connection between devices and the relatively few numbers of connected devices. In its efforts to tap the market, the Cupertino company has taken an interesting approach in that it is not targeting existing homes with new devices. Instead it is integrating its technology into new construction. This helps the company to choose partners for its ecosystem, instead of vice versa.

However, the company is entering a crowded marketplace. Amazon.com Inc.’s (AMZN) Echo devices turned out to be a sleeper hit last year. Similarly, Alphabet Inc. subsidiary Google (GOOG) has also come out with its own version of a connected speaker called Google Home. (See also: Google Vs Amazon In Smart Home Wars). Then, there is Samsung Electronics Co. (SSNLF), which acquired SmartThings, which has an app that is similar to HomeKit. All these companies are locked in a race to integrate as many devices as possible into their ecosystem. Apple’s success in the connected home market, thus, will depend on the number of devices it integrates in addition to the number of homes that are fitted with HomeKit.