Consumers like the idea of connected devices, but many are reluctant to embrace the reality due to security concerns.
We're seeing major internet companies and appliance manufacturers diving into the connected Internet of Things (IoT) smart home market. From Google's Rs.21,464.99 crore ($3.2 billion) acquisition of thermostat manufacturer Nest Labs in 2014, to Apple's launch of their HomeKit initiative, and makers like Bosch Siemens have their own connected appliance platform in the market.
Except for thermostats, most consumers do not want IoT appliances such as connected fridges, dishwashers, or slow cookers. The recent news of Nest ending support for the Revolv Home Hu, also highlighted the risks of trusting proprietary platforms for home connected devices.
Privacy and Security
A survey of 28,000 consumers in 28 countries released in January by Accenture LLP found that 47% of respondents pointed to security and privacy as potential obstacles to adopting such technology.
Figure 1: Impact of security concerns on IoT usage
"Security has moved from being a nagging problem to a top barrier as consumers are now choosing to abandon IoT devices and services over security concerns. More than two-thirds of the consumers surveyed are aware of the recent security breaches such as hacker attacks resulting in stolen data or malfunction." the report said.
Simplicity is important
I can't deny that the possibility of remotely setting my thermostat is appealing. When coming home from a week's long business trip I'd want to arrive in a warm (or cool) house without waiting for the heating or A/C to kick in and make the place more comfortable. Smart lighting is another feature that I could appreciate, and a device that can shut down my furnace if the smoke detector went off can be a lifesaver.
However, it's another thing to have my fridge telling me to order more milk or my dishwasher stop until I reset the system using a smartphone app. In fact, like most consumers, I like simple devices for simple tasks. A toaster is a toaster, and I adjust it using a lever on the side, not my smartphone.
Support for old devices
Another problem is support. A few years ago many consumers jumped into the new smart home market buying home hubs such as the one marketed by Revolt. Revolv was acquired by Nest Labs in 2014, and now the company decided to end support of the old Home Hub, with no alternative given to customers. In fact the Revolv website clearly states that "As of May 15, 2016, your Revolv hub and app will no longer work." Customers are asked to email the company for a refund.
Smart functions vs. smart appliances
There is a difference, however, between "smart" appliances, which are connected to WiFi and can be controlled by a browser or smartphone app, and other appliances with "smart" functions built into them. The later can have useful functions such as dedicated sensors that can send an alert when, for example, they need some preventive maintenance or replace a critical component.
This year's CES, the consumer electronics show in Las Vegas in January, saw the launch of a new line of connected tools, such as a Black & Decker smart battery, which can be located via smartphone, and sends low-battery notifications to the app. But those tools are not controlled by the smartphone, they just have some "smart" functions built into them.
The affects on the supply chain
The lack of confidence in connected appliances is posing significant challenges to manufacturers. Many appliance vendors do not have the technical expertise to deal with the security and software necessary to solve the issues customers are concerned about. Companies such as Intel, Qualcomm and NXP are offering secure IoT SOCs to power connected home devices, and can assist to develop applications. But consumers do not want to work with different apps for each device. As Accenture states in their report "Sharing data and creating integrated services across multiple companies—such as building a connected home through an integrated home security camera, thermostat, door locking and more—provides consumers with a richer experience and an opportunity for each company to offer a more robust set of services."
The industry needs to react to customer concerns and gain trust. People want simple, easy to use solutions. Security, integration and simplicity are the keys.