Alexa and Google Home have proved that home automation is useless?

by philg

Ken Olsen, the founder of Digital Equipment Corporation, a pioneer in minicomputers, disparaged microprocessors for controlling houses back in 1977:

In 1977, referring to computers used in home automation at the dawn of the home computer era, Olsen is quoted as saying “There is no reason for any individual to have a computer in his home.” Olsen admitted to making the remark, even though he says his words were taken out of context and he was referring to computers set up to control houses, not PCs. According to Snopes.com, “the out-of-context misinterpretation of Olsen’s comments is considered much more amusing and entertaining than what he really meant, so that is the version that has been promulgated for decades now”.

We’ve had 43 years of progress since then. The functions that he said were useless to accomplish by touching a switch are now useless to accomplish with our voices (are we truly so fat and lazy that we can’t get off the sofa to flick a light switch and need to ask Alexa to activate a light?).

I’m still kind of an enthusiast for a computer-controlled home, especially if we could have electrochromic windows and skylights everywhere around the house and/or motorized shades and brise soleil. But even in technologically advanced societies, such as Korea and Taiwan, the typical component of a house continues to be dumb, right?

Bonus… a picture of Ken Olsen’s former house, past peak foliage:

For folks who believe in the magic of American real estate as an investment: the Zillow link above says that the house was sold in 2007 for $1.9 million and is now worth $2 million, 13 years later. Up 5 percent, right? (actually 0 percent if it costs 5 percent in real estate commissions to sell) But let’s not forget that it is attracting $28,832 per year in property tax even before the ground has been broken on the nation’s most expensive (per student) school ever constructed.) The S&P 500, by contrast, was at 1,455 at the time of the sale. On October 26, 2020 it was 3,465 (up 138 percent). Instead of requiring the payment of property tax, the S&P 500 has been paying a dividend every year during this period.

What if we adjust for inflation? The house cost $2.4 million in today’s mini dollars. So it has actually lost more than 20 percent in value when you consider the broker fees that will need to be paid to unload it. (Adding insult to injury: U.S. capital gains tax does not adjust for inflation, so the unlucky owner might have to pay capital gains tax on the increase in nominal value despite the fact that there was a loss. in real (inflation-adjusted) terms.)

13 thoughts on “Alexa and Google Home have proved that home automation is useless?”

  1. For real estate you probably need to average Zillow (low) and Redfin (high) prices to get a decent idea. A friend’s home (on a busy street) in Lexington just sold for $100K over the listing price (is it all those New Yorkers moving here and overbidding?). Meanwhile, on your other topic: after years of neglect, I think home automation is slowly gaining ground with Amazon Alexa and Google Home. There are (were?) many 3rd party home automation companies around, mainly focused on high-end audio/visual stuff as well as home automation, but a few years ago Microsoft stabbed them in the back (normally something Apple would do!) which didn’t help. I’ve had a Google Home Mini sitting in a box since last Winter, but finally set it up a few weeks ago in the bedroom, mainly to control a smart plug with a light (yes, that’s useful!) and am kicking myself for not doing that earlier (this multi-purpose device is relatively inexpensive — I mostly use it for WiFi bridging to a wired remote Tivo mini: https://www.amazon.com/gp/product/B01MZIV9ZC/ ). I also have an (old echo dot version) Alexa in the kitchen, mainly for news updates, but it could do other things (besides spy on me — but I don’t really care, I just keep telling it that I won the election, haha!). I may even connect my newly set up Google Home to the Nest thermostat if I get ambitious, which beats fumbling around with my iPhone in the morning to adjust the temperature (mostly on a schedule, but trickier when I am now home most of the time instead of away for the day)!

  2. The biggest wins have been remotely aimed air vents & fans, remotely preheated ovens, remotely viewable refrigerator contents, but what’s being promoted is stuff no-one cares about, like doorbell cameras, thermostats, & light switches. It’s another industry which is flush with private equity & no desire to try very hard.

  3. To be fair, the cash flow analysis for the house should include the “dividend” of being able to live in it (or rent it out)… not that this would overcome the difference with S&P500.

  4. Automation is an economic response to high labour costs. Indians in India do not buy roombas because low caste people are cheaper to buy and maintain.

    • If anyone thinks COVID is a big problem, they have no idea about what is coming next. Of course, there are people who already know what’s going to happen, and it’s not the Marketing Department.

    • In the past few days I’ve been trying to decide whether America’s future is India or China. I think China. We have way too many commies in America at our elite universities for us to be anything but their natural extension. You can be poor and dead in China, protest the regime, and nobody ever knows, because you’re dead, or will be dead! And as Philip has said many times now, quoting his Dutch friend, up until now, nobody has figured out a good way to prevent the Deplorables from voting. But that problem has been solved.

  7. Back when I bought my first house I only had one coworker tell me the real truth about owning not really saving you any money over renting. I didn’t believe him over everyone else telling me what a great investment it was. Now many years later I (still a home owner) have tried to pay it forward whenever I have a friend buying their first house. Not that anyone has ever believed me either.

    Another angle to consider of whether your house is really an investment is this thought experiment: let’s say an appliance like a refrigerator dies on you. As a homeowner how much are you going to spend on a new one? As a renter how much is your landlord going to spend? There’s probably about a factor of 3 difference between the functional but no frills appliance and the stainless steel modern marvel with high tech / high failure rate features. I’ve found owning a home to present a constant stream of opportunities to over spend on basic upkeep.

  8. The real cost trap of automation is in cars. Much as philg loves automation, it is dreadfully expensive in cars. The simplification of the drive train in EV’s will be squandered by maintenance and damage repairs on super-cruise, wireless monitoring etc.

  9. Alex,
    I hope you are wrong about Biden. He looked pretty sharp in his first appearance, and he only needs a few months to plug some of the damage. We desperately need younger leadership and a different direction.
    Toucan,
    Time to Windex that crystal ball! Unless you are hedged, looks like you are buying your own lunch at Oshkosh.

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