A common theme this past decade has been that IT/Silicon Valley and A/V/smart home technologies are converging, especially because the network, traditionally an IT system, has become a required system in both worlds. But if that’s true, it’s not happening because the A/V industry is meeting IT halfway … it’s because Silicon Valley is quickly taking over.

For example, Google and Apple both now have dominant products in the smart home space (Nest, Dropcam, AirPlay) which have replaced existing traditional solutions because they have a fantastic understanding of the user experience. But I’ve yet to see an A/V/smart home company successfully make the leap into IT and either become a respected solution or displace anything in that market.

I don’t think this is incidental; it’s indicative of a broader problem in our industry. A/V/smart home brands simply don’t “get it.”

A recent On Point broadcast on NPR discussed the battle between the car industry and Silicon Valley. Tesla has already won—and in the near future Apple and Google will win—the hearts and minds of the car buyer.

The reason is that cars these days are more computers than they are steel and rubber. Silicon Valley companies demonstrating a mastery of the technology user experience can outsource the commoditized aspects of the product (such as rubber, steel, and overall manufacturing).

In Tesla’s case, it outsourced the manufacturing of its original Tesla Roadster while it focused on the technology and batteries. Now Tesla has started to bring manufacturing in-house and will eventually control the entire experience.

A similar thing happened with the taxi industry and Uber, with the latter becoming a well-known success story completely upending the incumbent in a matter of months. As a result, Uber has become the world’s fastest growing Internet company.

If this concept carries over to our industry, then virtually every A/V manufacturer is at risk, and by association, every A/V integrator is at risk, too. The A/V world is sitting on its laurels, just assuming that the status quo will prevail because “AV is too special” or “It can’t all be replaced by the network” or “IT guys don’t know much about A/V.”  Even if that’s true, it just means that IT will reinvent A/V according to its own vision, leaving current conventions behind until the truth will eventually be that “A/V guys don’t know much about A/V.”

Beyond Technology Is Service

The problem is greater than just “IT vs. A/V.” In the A/V industry, most integrators think that what they do is sell/integrate technology in the home. But if you talk to many Internet companies whose lifeblood is software development, one of their biggest investments is actually in customer service.

Tony Hsieh, founder of Zappos.com, made it known early on that his Internet company is a “service company that happens to sell shoes.”  Zappos’ About Us page further explains what’s most important about shopping online and shows that they don’t think it’s about shoes:

“We believe that the speed at which a customer receives an online purchase plays a very important role in how that customer thinks about shopping online again in the future, so at Zappos.com, we have put a lot of focus on making sure the items get delivered to our customers as quickly as possible. In order to do that, we warehouse everything that we sell, and unlike most other online retailers, we don’t make an item available for sale unless it is physically present in our warehouse.”

In the same way Zappos (as a concept) has surpassed the shoe salesman (think Al Bundy), technology management in the future will be profoundly different from what is offered today by manufacturers and integrators, many of whom still believe they can only compete by selling and/or installing hardware that’s more cutting edge than the next guy’s.

There’s already one Internet startup who may soon be nipping at the A/V industry’s heels. Ron Johnson, former retail chief of Apple, recently founded Enjoy, a startup that’s combining the instant gratification of Uber with the excellent service of Zappos (neither of which our industry is known for).

Sure, the CEDIA channel is well established in the high-net worth market and won’t face likely competition from this startup, but disruption often starts in market segments that the incumbents think don’t matter. As technology becomes more accessible by the masses and needs to be managed, we’re losing out on some huge potential for market growth by becoming technology managers in the home, not just smart home integrators.

Enjoy might very well become the “technology manager” that establishes itself in many homes and then launches smart home integration services, maybe even producing its own private label hardware. Change can happen quickly.

Enjoy or another company with a similar business model could very well replace the A/V and smart home industry as we know it today. The answer: Adapt before we become obsolete.

As a follow up to this, my next CE pro blog will explore real conversations with manufacturers and integrators who really, really “don’t get it.”

Part 2: Death Knell Ringing for Manufacturers, Integrators Who Still ‘Don’t Get It’

Part 3: No Respect: Why Custom Electronics is Rodney Dangerfield of Design/Build Sector

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