Publication date: 25 Sep 2023
IDC: Connected Devices. How does “Matter” bring excellence to manufacturers in China？
Beijing, September 25th ,2023- IDC data shows that the overall number of smart devices in China will reach 790 million in 2023, driven by an increase in types of devices entering the market. Smart device categories such as PCs, tablets and smartphones are no longer the only options available to consumers. However, the smart devices market is showing a trend of fragmentation with device interconnection becoming increasingly important.
In recent years, the smart home open protocol standard Matter (currently at version 1.1) was released by the Connectivity Standards Alliance, which is a worldwide body formed of many hundreds of companies to deliver standards associated with the Internet of Things (IoT). For example,, Matter is used to allow communication between devices for the Amazon Alexa, Apple Home, Google Home, and Samsung SmartThings smart home systems. The Development Research Center of the State Council (DRC) has also released the report "Accelerating the Formulation of China's Smart Home Interconnection Standards and Effectively Responding to the Implementation of the Matter Standard". Also, the China Household Electrical Appliances Association (CHEAA) and the China Communications Standards Association (CCSA) have jointly released a "China Smart Home Interconnection White Paper (2023)". At present, when and how “China's Matter" will be released is still the focus of market speculation.
Dr Antonio Wang, Vice President of IDC China, said that after nearly two years of efforts, the overseas standard Matter has begun being applied to devices for China. The accelerated compliance to Matter by Chinese manufacturers for the overseas product market will surely further increase the competitiveness of Chinese smart devices beyond their intrinsic lower cost advantages. "Matter" is like a sharp blade to help Chinese smart home equipment manufacturers expand into the global market.
For customers in the domestic market, the incorporation of a Chinese version of "Matter" is the inevitable direction to take for China’s manufacturers. In the future, smart devices will become more convenient and interconnected, regardless of which brands customers purchase and consequently will provide a significantly improved customer experience. However, in practice, overall progress remains slow and complex. China's smart home platform ecosystem may continue along a limited interconnection development path, and it will take time to achieve a unified industry connectivity standard, mainly for the following reasons:
Diverse systems are being used that can’t easily be covered by the few leading manufacturers
China's smart device users are more technologically diverse than those seen overseas. In the overseas markets, Amazon, Google (Android) and Apple can basically cover most users of smart devices. In the Chinese market, during the mobile Internet development, domestic Android manufacturers generally built their own ecosystems; Then, the manufacturers of the consumer IoT, home appliance and industrial devices also built their own ecosystems. This led to the formation of a small number of lead manufacturers with very different ecosystems that can’t easily cover most users using a connectivity standard.
Chinese manufacturers haven’t used a common software development model and still rely more on hardware sales to bring customers into their ecosystem
In overseas markets, Amazon, Google and Apple all have strong software service ecosystems. Even before the launch of Matter, most third-party hardware brand users were already users of software on the Amazon, Apple and Google ecosystems. Therefore, it is easier for them to reach a consensus on the connectivity standard whilst retaining the underlying user data. Most technology manufacturers for the Chinese market rely on hardware to acquire users and build their ecosystems. Therefore, they pay more attention to the customer’s pool of compatible hardware and have an increased concern over the potential loss of customers from using open device connection protocols. Therefore, the formation of unified connectivity standards faces more challenges and concerns in the domestic market.
The adoption of Matter by the Chinese manufacturers could generate better economies of scale in the smart devices market. Those small and medium-sized device manufacturers who lack the advantages of their own substantial ecosystem and software will take full competitive advantage of their low price and expand market share. This will increase the penetration of smart devices in China's domestic market and promote the development of associated technology.
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