Factors Influencing the Cost of Developing an AI-Based Smart Home App

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Artificial intelligence is becoming a major focus of our lives. It is affecting some of the most intimate elements of our lives, such as our homes. As we stated before, AI has played a role in driving the direction of the smart home market.

A growing number of people live in smart homes these days, which rely on complicated AI technology. As of 2021, connected home devices are used by approximately 12.5% of households in the United States. In just four years, however, the number of intelligent homes could top 21%, which makes home automation one of the most lucrative IoT segments.

In addition to high-performance hardware, intelligent thermostats, water meters, and light bulbs rely on software, including low-level solutions enabling device-to-device (D2D) communication and secure connectivity, cloud-based back end, and mobile applications facilitating connected home configuration and management. AI technology makes these features highly sophisticated.

The purpose of this article is to evaluate the role of AI-driven mobile apps in home automation and calculate the cost of developing these applications.

Smart Home Components that Rely on AI and Connectivity Options

A smart home is a network of AI devices with built-in connectivity that use communication protocols to converse with each other and the central hub and are typically operated via a mobile application. A smart home solution may be integrated with a voice assistant (Siri, Alexa, Google Assistant) to reduce friction in setting up and running smart devices. Connected gadgets which utilize the same AI communication technology can be operated via one mobile application; otherwise, middleware and separate mobile apps are required.

There are two types of smart home solutions you can build — a wireless or a wired one.

Devices that comprise a wired home automation system employ protocols like X10 and Insteon to exchange messages over a standard or low-voltage power line, have unique IDs and embedded software running on them, and act as self-sufficient nodes independent of the central hub and each other. This AI technology helps create smart homes that allow people to live better lives.

The node-based architecture is what makes wired connected homes secure and reliable — but there are two sides to every coin. While you can easily scale a wireless home automation solution and add new devices to the network, wired systems lack flexibility and require complex wiring, which might significantly increase Smart Home installation costs.

Wireless connected home systems can be powered by several AI-driven communication protocols, such as Z-Wave, ZigBee, and Thread, which are specifically designed to ensure low power consumption and data rates.

Having said that, the smart home market is largely fragmented, and most devices fail to talk to each other by design, so you need middleware to join the pieces of the puzzle together. This developer needs a detailed understanding of AI technology and device integration.

Understanding Smart Home Software Ecosystem

What we call a smart home app is in fact a multi-tier AI solution that features:

  • Low-level software facilitating device connectivity, data acquisition, and firmware updates
  • Data analytics tier that incorporates cloud-based or on-premises servers supporting data storage and processing
  • Data presentation layer, which features mobile and web applications enabling seamless smart home device configuration and management

To provide a realistic smart home app development cost estimate, let’s assume you have hardware — i.e., sensors, home automation controls, thermostats, smart speaks, and other devices with baked-in connectivity — and embedded software pre-installed by the gadgets’ by OEMs. AI technology has made all of this a lot easier.

How much does it cost to create a connected home platform which would allow homeowners to operate these devices in sync?

Smart Home App Development Cost Breakdown

Back-end System for Data Acquisition, Storage, and Analytics

With the greater availability of cloud-based infrastructure solutions including AWS IoT and Azure IoT hub, and cloud computing consulting services that can provide valuable insights for implementing and using cloud services, smart home startups no longer have to code advanced data acquisition, archiving, and analytics modules from scratch. Amazon, for instance, provides an entire suite of services that allow developers to integrate connectivity into hardware, design scalable home automation solutions, and apply advanced machine learning algorithms while conducting sensor data analysis.

Nevertheless, the business logic of a smart home app still has to be written from the ground up.

Functionality-wise, the key components of a connected home back-end system include:

  • Data analytics module with reinforcement learning capabilities, which enables the home automation system to make autonomous decisions based on historical and real-time data — for instance, lower the thermostat at certain hours of the day or turn the lights on once motion sensors spot activity in the room.
  • Provisioning module — that is, a web-based suite which allows customers who buy connected home products to set up a user profile, add devices to their network by scanning a QR code or registering a gadget’s unique serial number, and enable automatic firmware updates.
  • Basic admin interface, which allows you as a smart home service provider to manage your customer base and device network, roll out security patches, etc.
  • APIs facilitating secure integration with connected home gadgets, central hub, mobile devices, and 3rd-party home automation products.

The development of a fully fledged back-end system for a custom smart home software solution featuring the modules listed above will cost you $200 thousand

Mobile Applications for Smart Home Device Management

Although pairing a Wi-Fi-enabled device to a mobile application does not necessarily make a connected home intelligent and may in fact cause inconvenience, the current level of AI development prevents IoT startups from designing Smart Home systems that expedite data-driven decisions with little to no effort on a user’s part.

A smart home mobile app features several components:

  • Lighting management module, which allows users to control connected bulbs, light strips, and accessories remotely
  • Climate control module, which supports effortless setup and management of HVAC equipment
  • User control module, which helps homeowners restrict access to smart home settings, add new users to the network, and create custom schedules
  • Media & entertainment suite, which orchestrates smart TVs, audio systems, and connected speakers

As you’re probably targeting both iOS and Android users, you’ll need approximately $100 thousand to create dedicated mobile apps for your smart home system. It is also recommended that you develop a web-based application mirroring the functionality of the smartphone apps, which adds another $50 thousand to the estimate.

How Much does It Cost to Create a Smart Home App?

In the end, we’ve arrived at an impressive figure — $350 thousand. Mind that the features we’ve enumerated above are the absolute minimum required to ensure your connected home system’s success in the competitive AI solutions market.

The integration with a voice assistant — for example, Amazon Alexa, a program with advanced NLP capabilities that gets Siri, Google Assistant and Cortana beat by a mile — would certainly introduce a new level of convenience for your customers and bring you one step closer to configuration-less home automation. Depending on the amount of devices within a connected home network and the number of commands the assistant is supposed to interpret, the implementation of this feature will cost you at least $20 thousand.

Understand the Reality of AI Smart Home Development

Breaking down Smart Home application development costs a bit further, it’s worth mentioning that HVAC management is the most expensive and time-demanding task on our estimate and will consume up to 50% of your budget (the back-end and mobile parts combined). Media and entertainment management functionality is a runner-up with $120-130 thousand, while smart lighting — $100 thousand — is at the bottom of the list.

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