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AT&T Aims to Set Your House on Autopilot

Since I’m still undergoing the stressful journey that is house hunting, I suppose I have home-based technology on the brain.

At this time last month, I discussed the Nest thermostat’s ability to cut energy costs by learning your heating and cooling schedules and putting the process on autopilot. And users could save even more cash each month by manually controlling the thermostat with any internet-connected device.

Now, AT&T (NYSE: T) is working on a solution that not only allows you to control your thermostat remotely, but potentially your entire house.

Here’s a brief rundown of what we can expect, and the one thing AT&T needs to focus on if it wants the product to succeed.

Digitizing Your Home Security… and Fireplace

The system is called Digital Life, and in short, it’s a “home security and automation service that lets you access, monitor and control any device in your home remotely,” according to AT&T’s demo video.

The video shows that, like Nest, it can be used for remote temperature adjustment. Digital Life also has security sensors for your doors and windows that can connect to lighting fixtures in your home to turn lights on automatically after a break in.

With Digital Life you have the option to design custom modes that alter your home’s atmosphere depending on your activity. The example in the video involved automatically turning on the lights and fireplace, and turning off the radio when you select reading mode.

It even allows you to open and close window blinds, unlock your door with a simple input on a tablet or smartphone, and switch off your water main after the system detects a leak.

So the technology is obviously useful. But it should also sound vaguely familiar.

A year ago I mentioned how Google’s (Nasdaq: GOOG) been working on a similar home automation project called Android@Home. And Verizon (NYSE: VZ) has its own $9.99 per month home monitoring technology.

AT&T already has a good chance of outpacing Verizon on this front, however, considering it’s “showing more ambition with its stated goal of selling nationwide, rather than sticking to its landline service territory, as Verizon does,” according to the Associated Press.

Not much more is known about how deep AT&T plans to integrate the technology at this time. But no matter how useful the technology ends up, the key to a successful launch will rely on one thing: simplicity.

Go Basic or Go Home

Recall, one of the key benefits of the Nest thermostat is that its creators didn’t try to make it something it wasn’t. As Nest’s VP of Sales and Marketing, Erik Charlton, wrote on the company’s website, “Complexity is easy… It’s simplicity that’s hard. To make a great product, you have to define its core – a single challenge – and painfully, painstakingly eliminate creative features to stay true to the product and its purpose.”

And he’s just talking about a thermostat. With a system that controls anything from an alarm system and security cameras to your dishwasher and ceiling fans, it’s not exactly difficult to overcomplicate matters.

So AT&T needs to be cautious as it puts the finishing touches on the user interface. To top it off, it also wouldn’t hurt if the company kept the cost of its services on par with the competition.

If AT&T’s technology does prove successful, it will open up a huge revenue stream outside the mobile space. But some doubt that it could actually have a huge impact on the company’s shares…

As The Associated Press points out, “Steven Winoker, an analyst at Sanford Bernstein, said about 23% of U.S. homes have security systems, so there’s plenty of room to grow. Even fewer have automation systems for controlling appliances, lights, heating and cooling. It’s a very profitable business… [However] it’s not big enough to significantly affect the earnings of a company of AT&T’s size even if it’s successful, given that it’s a relatively small market.”

Either way, one more competitor on the home automation technology scene can only be good for consumers, as this will certainly light a fire under Google to get its Android@Home project under way. Can’t wait.

Good investing,

Justin Fritz

Justin Fritz

, Executive Editor

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