But what about the often discussed “Internet of Things?” For the last 2 (or more) years, there has been a good deal of hype at CES and around the industry in general. Yet it still cannot be said that the promise of the Internet of Things (“IoT”) - a tech-driven utopia of connected smart devices that automatically optimize our world - has truly come to fruition. (Just ask Walt Mossberg for his point of view). Great technological development has occurred to be sure, and impressive new products are coming to market all the time. But I don’t think we can say that a world of connected smart devices talking to other and using data to optimize our lives has become a true reality – yet. Why has this not yet happened? What will it take for it to happen? When will this occur?
A few thoughts come to mind when wrestling with these questions; I discuss them below:
IoT technology standards are still in some conflict – prolonging the fragmentation of the market.
The common connection and communication protocols still have yet to be included on one common platform, and the biggest players in technology and consumer electronics are still sticking to their consortia to promote their standards as the one the world should adopt. This is part a marketing issue and part a technology issue: no one technology has yet emerged as a clear superior, yet (in my opinion) none of the sponsors have done a good job of making their case to their consumers – adoption has been slow and splintered. Unlike the brilliant marketing of, say, Apple – and how it attracted and converted a better part of the connected world to its closed-loop ecosystem.
Concerns remain about data security amongst connected devices.
These days, computers and phones aren’t the only things that can be hacked. As discussed in this recent article from Bloomberg Business Week, all kinds of connected devices are vulnerable to cyber attacks. Many of these devices contain vital and sensitive personal information; some could be reprogrammed to cause inconvenience or even harm people. The internet of things is not just smart refrigerators and home automation, but more broadly consists of major industrial machines, power generation plants, medical devices, and vehicles. Until these security holes are plugged, it will be challenging for the market to adopt them in a widespread way. Manufacturers need to listen to customers and users to fully understand the vulnerabilities.
Applications have been more targeted at B2B instead of B2C.
The internet of things just hasn’t hit consumers yet, and the low awareness of the technology has kept consumer penetration below 10% thus far (although expected to increase dramatically in the next 5 years). In fact, it has been industrial corporations and technology-focused startups that have been the most active in exploring the applications of machine-to-machine connections. We have seen good use of the technology in the manufacturing and transportation sectors, with machines exchanging data to improve production yields or increase fuel efficiency. The product offerings targeted at consumers, while interesting and progressing, have yet to be a game changer that will bring the phrase “Internet of Things” into the national lexicon. However, companies such as Crestron, Nest, and new entrants like Canary are seeing increased penetration; this allows even the casual consumer electronics observer to experience the potential of IoT technology.
The Value Proposition still has yet to be articulated in a way that resonates with the broad market.
In a recent conversation I had with IoT expert & evangelist Greg Kahn, he made a great point – that the internet of things is currently seen as more of a macro-trend than a distinct product category. The connected world – and all of the high tech devices within it – is potentially so vast that the value can be hard to capture in a concise marketing message. Therefore, (I believe) marketers are struggling to convey the significance of this trend with the broad consumer market; there still needs to be a good deal of creating marketing and incentivizing done to drive the concept home. Only by delighting customers with great products and showing tangible, measurable benefits to consumers lives, will IoT enter the public consciousness in a way that mobile apps or the sharing economy have. Content marketing and effective storytelling will play a big role here. It will take time as leading brands focus on the specific value propositions of their technology platforms and product families.
By no means is the potential size and scope of the Internet of Things in question. It will still be a huge topic of discussion at CES (dozens of conference panels and keynotes will touch on the topic) and throughout the year(s) to come. The venture capital community agrees, with almost $8 billion invested in IoT startups since 2010, and that amount expected to roughly double in the next 5 years. The question is not if the IoT will become a thing, but when will that tipping point occur? Maybe it has already and we have yet to realize it – what do you think? Please leave a comment, and share this post with others if you find it interesting.