The Smart Home Year in Review: 2023's Biggest Wins and Fails
Another year in smart home tech, another year of promises kept and promises broken. 2023 was a genuinely interesting year for the industry — some major steps forward, some concerning stumbles, and a few surprises nobody saw coming. Let's get into it.
The Wins
Matter Actually Shipped (For Real This Time)
After years of delays, Matter went from "promising standard" to "thing you can actually buy at Best Buy" in 2023. Over 100 devices earned Matter certification this year across lighting, plugs, switches, sensors, and locks. Eve, Nanoleaf, Aqara, Meross, TP-Link, and even Belkin shipped Matter-compatible products. The pairing experience — scan a QR code, pick your platform — is genuinely simpler than the old way of doing things.
Is Matter perfect? No. Multi-admin support (using the same device across Apple Home, Google Home, and Alexa simultaneously) is still finicky. And the device category coverage is limited — no cameras, no robot vacuums, no major appliances yet. But the foundation is solid, and for the first time, I'm telling people to check for the Matter logo when buying smart home gear.
Thread Became the Preferred Protocol
Thread had a breakout year. As the low-power mesh protocol that underpins many Matter devices, Thread networks got denser and more reliable as more border routers shipped. Apple TV 4K, HomePod Mini, HomePod 2nd gen, Samsung SmartThings Station, Google Nest Hub Max, and several third-party devices all serve as Thread border routers now. More border routers means better mesh coverage, which means more reliable devices. Thread is quietly solving the "smart home devices are unreliable" problem that plagued Zigbee and Z-Wave for years.
Aqara FP2: The Breakout Product of the Year
If I had to pick one product that defined 2023 in smart home, it's the Aqara FP2 presence sensor. This $55 mmWave radar sensor doesn't just detect motion — it detects presence. Sitting perfectly still on the couch reading a book? The FP2 knows you're there. Traditional PIR motion sensors would turn off your lights after a few minutes of stillness. The FP2 solved a problem that's annoyed smart home enthusiasts for over a decade.
Even better, the FP2 can define zones within a single room and track multiple people independently. It works over WiFi with HomeKit natively and supports Matter. The automation possibilities are enormous, and the community response was overwhelming. Aqara couldn't keep these in stock for months.
Home Assistant Hit 1 Million Active Installations
The open-source smart home platform crossed the million-installation mark in 2023, cementing its position as the most popular self-hosted home automation system in the world. The team shipped monthly updates with increasingly polished features — the new dashboard system, voice assistant pipeline, local AI processing with Wyoming, and dramatically improved onboarding for new users.
Home Assistant's growth is important beyond just user numbers. It proves that there's a massive market of people who want to own their smart home data and run things locally. Every major smart home company is paying attention to what Home Assistant does, and that competitive pressure benefits everyone.
IKEA Went All-In on Matter with DIRIGERA
IKEA replaced their aging TRADFRI gateway with the DIRIGERA hub and committed fully to Matter. For a company that sells smart home gear to mainstream consumers at IKEA prices, this is a big deal. DIRIGERA supports Matter, Thread, and Zigbee, and IKEA's new smart home app is a genuine improvement. When IKEA commits to a standard, it signals mass-market readiness.
Google Home App Redesign
Google finally redesigned the Google Home app, and it was desperately needed. The new version rolled out throughout 2023 with a cleaner layout, faster device controls, better automation editing, and a new Favorites tab that puts your most-used devices front and center. It's not perfect — some advanced features are still harder to find than they should be — but the improvement over the old app is substantial. The addition of a web interface at home.google.com was also a welcome surprise.
Amazon Echo Hub
Amazon released the Echo Hub, an 8-inch wall-mountable smart home control panel for $180. It's designed to replace a light switch and serve as a central control point with Zigbee, Thread, Matter, and Bluetooth built in. While wall-mounted tablets running Home Assistant dashboards have existed in the DIY world for years, the Echo Hub brought the concept to the mainstream. The form factor is the future of smart home control.
The Fails
Amazon's Alexa Layoffs
This is the most concerning story of the year. Amazon laid off hundreds of employees from its Alexa and devices division in late 2022 and continued cuts into 2023. Reports surfaced that Alexa has never been profitable and was losing billions annually. Amazon essentially admitted they hadn't figured out how to monetize the platform beyond selling hardware at cost and hoping people would shop more on Amazon.
For the millions of people who've built their smart home around Alexa, this is genuinely worrying. Amazon isn't going to kill Alexa tomorrow, but reduced investment means fewer new features, slower bug fixes, and less incentive to keep the ecosystem competitive. The long-promised Alexa LLM upgrade (a conversational AI overhaul) was teased throughout 2023 but didn't ship by year end. Not a great sign.
Subscription Creep Accelerated
Ring raised prices on their Ring Protect plans. Arlo raised prices. Wyze introduced a $2/month fee for features that used to be free. Blink started pushing subscriptions harder. Even Google Nest started gating useful features behind Nest Aware subscriptions.
The trend is clear and frustrating: buy a camera or doorbell for $50-200, then pay $3-10/month forever to actually use it properly. Local storage options exist but rarely match the convenience of cloud recordings with smart notifications. This is the single biggest consumer complaint in the smart home space, and the industry is making it worse, not better.
Wink Finally Died (Basically)
Wink, the smart home hub that was actually pretty good back in 2015-2018, has been on life support for years. In 2023, it became effectively dead — the app barely works, customer support is nonexistent, and the $5/month subscription they introduced in 2020 (which caused a mass exodus) couldn't sustain the company. If you still have a Wink hub, it's time to migrate to literally anything else. RIP to a platform that had real potential.
Insteon's Resurrection Fizzled
After Insteon's spectacular collapse in 2022 (servers shut down overnight with no warning, CEO vanished), a new company acquired the brand and promised a revival. In 2023, that revival was... underwhelming. Some basic cloud services came back online, but new product development has been minimal and trust in the brand is essentially zero. The lesson remains: cloud-dependent platforms can die at any time, and Insteon is the cautionary tale.
Matter Camera Support Still Missing
Matter 1.0 launched in late 2022 with a promise that cameras would come in a future update. Throughout 2023, camera support remained on the roadmap but never shipped. For many consumers, a security camera is their first or primary smart home device, and the inability to use Matter for cameras limits the standard's appeal. The technical challenges (streaming video is very different from toggling a light) are real, but the delay is frustrating.
Trends That Defined the Year
Local Processing Went Mainstream
Between Home Assistant's growth, the Edge driver migration in SmartThings, Matter's local-first design, and even Apple pushing more HomeKit processing to the HomePod, the industry moved meaningfully toward local processing in 2023. Consumers are increasingly aware that cloud-dependent devices have a shelf life, and "works without internet" is becoming a legitimate selling point.
mmWave Sensors Changed the Game
Beyond the Aqara FP2, companies like Everything Presence, Tuya, and numerous ESP32-based DIY solutions brought millimeter-wave radar presence sensing to the smart home. This technology will eventually make PIR motion sensors obsolete for indoor use. The ability to detect stationary presence — not just motion — unlocks automations that simply weren't possible before.
Privacy-Focused Alternatives Grew
Products like the Ecobee thermostat (with HomeKit local processing), Reolink cameras (local storage, no subscription), and Home Assistant's local voice processing showed that you don't have to sacrifice functionality to maintain privacy. The market for "smart but private" is small but growing fast.
Looking Ahead
2023 was a year of maturation for the smart home industry. The hype phase is over — we're in the "actually making things work reliably" phase, which is less exciting but far more important. Matter and Thread are laying real foundations. Local processing is becoming the norm rather than the exception. And consumers are getting savvier about avoiding subscription traps and cloud dependencies.
The biggest question mark heading into 2024 is Amazon. If the world's most popular voice assistant platform reduces investment, it affects everyone. But the rest of the industry looks healthier than it has in years. That's something worth celebrating.