Yesterday's announcement of Project Connected Home over IP promises to pave the way to a standards-driven market for smart home products with easier setup experiences, more compatibility, and flexibility with different ecosystems. While this is good news for consumers, it's bound to shake up the industry. Silicon Labs, the owner of Z-Wave, is already responding with today's announcement that it plans to open the Z-Wave standard to third party manufacturers and development in 2020.

Z-Wave is currently a proprietary standard owned by Silicon Labs. The company is the sole manufacturer of radios and operates the Z-Wave Alliance, which is responsible for certifying compatibility before products can be sold.

The proprietary nature of the standard and single-party manufacturing strategy has been a point of contention around Z-Wave for a long time. It is often more expensive to integrate than competitors like Zigbee and isn't popular with security providers since they can't switch vendors if Silicon Labs were no longer an option or shifted to unfavorable pricing.

Today's announcement addresses these concerns with two changes that will be coming in the second half of 2020. First, Silicon Labs will spin off the Z-Wave Alliance into a separate organization to act more like a traditional standards body which will oversee growth while continuing its role in product certification. Along with this, Z-Wave itself will be opened up to allow competitors to develop and manufacture their own radios.

When Z-Wave opens up, it will include the radio specification, application layer, network layer, and the host-device communication protocol.

In a response to The Verge, Silicon Labs explained that the move is intended to encourage adoption of Z-Wave and increase the demand for radios from the company. Since the business is focused on manufacturing components, it won't matter if there are more competitors as long as there are still more orders coming in.

While it's unclear exactly how things will work out with the Project Connected Home over IP initiative, Silicon Labs is one of the Zigbee board members that will play a part in crafting a system for interoperability. The new Z-Wave strategy may be aimed at boosting its marketshare in a bid to maintain relevance in the long run, or it may have even been an obligation to join in the discussions.

At a minimum, this will likely bring down prices on hardware built with Z-Wave, although it may also open the door to larger competitors like Samsung to take on Silicon Labs directly.