Firmware is the software responsible for the basic functions of an electrical device. As a "normal" user of smart home devices, you don't need to worry about the firmware. It's embedded in the device and requires no user intervention. Only "smart home hobbyists" who want to program their own smart home system across manufacturers and without the cloud may need to replace the pre-installed firmware with another one. The free firmware Tasmota is often used for this purpose.
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