‘Smart’ Thermostats Not the Same as ‘Connected’ Thermostats

When Nest Labs introduced the Nest Learning Thermostat in 2011, the company awakened a dormant thermostat industry, according to Omar Talpur, analyst for Security and Building Technologies at IHS.

With the success of Nest, some manufacturers have started labeling their products as “smart” even though they are not technically “smart.”

The term “smart” is not regulated by any particular government, group or agency, says Talpur. In fact, it is similar to the marketing term “natural” as used on the labels of grocery store items. Like “smart,” “natural” has no standard definition, but it gets confused with foods labeled “organic,” which does require that a set of governmental criteria be met.

In the IHS report “The American and EMEA Markets for Thermostats,” smart thermostats are those that are connected to the Internet and make automatic adjustment decisions regarding heating and cooling, based on some type of input. Examples include:

• The Ecobee 3, which uses presence sensors located on a property that sense when people are present, so the climate can be changed accordingly;
• Honeywell’s Lyric thermostat, which uses geo-fencing technology to determine when a homeowner is getting close to home; and
• Nest, which uses presence sensing in the thermosta, to determine when people are present.

Other than these three examples, there are many other thermostats currently labeled as “smart,” but their only defining characteristic is the fact that they are connected to the Internet. IHS uses the term “connected” in these cases, as these products do not make decisions based on external inputs.

While IHS has made this distinction, several leading manufacturers have not, says Talpur. Out of all thermostats shipped in North America in 2014, roughly 15 percent were connected, while 12 percent were smart. The remainder were traditional thermostats with no Internet access.