Navigant Research Blog

The Fate of the Smart Home Hub

— June 14, 2018

While the concept of the smart home is expected to explode and completely revolutionize the way people interact with their homes, this space currently faces issues preventing mainstream adoption, the most significant of which is a lack of interoperability. The smart home space is fragmented with a variety of standards and networking protocols, and not all devices work together. Some market participants have developed relatively closed-off networks to ensure the devices operating within their ecosystem work well together and are more secure (and to incentivize consumers to join their club over other manufacturers), which is what Apple has done with HomeKit. Others believe in creating open systems where all types of devices from third-parties can work together, which is ZigBee’s aim with its protocol and Dotdot application layer. However, this is easier said than done.

Enter the Hub

Gateways, or smart home hubs, have emerged in recent years to address this issue. Hubs enable direct communication between devices (and often the cloud) by being embedded with multiple radios, which mitigates issues associated with a lack of interoperability. Some hubs are also capable of processing information locally, and don’t require a connection to the cloud, which addresses issues associated with data privacy and security. While devices like Amazon Echo and Google Home foster communication between devices via cloud-to-cloud integrations, hubs allow devices to rely less on the cloud and to communicate with each other directly.

However, one of the major issues with hubs is that many serve virtually no purpose other than fostering interoperability. They are simply boxes embedded with radios—no screens, no voice activation, no additional use case served. For example, the Wink hub, Samsung SmartThings hub, and the Philips Hue bridge provide no additional value outside of connecting compatible devices to each other and the cloud. Manufacturers recognize this as an issue, and have begun to embed the capabilities of gateways into the existing infrastructure of the home. For example, the Amazon Echo Plus has been equipped with a ZigBee radio, which means ZigBee devices can communicate directly with the Echo Plus and the cloud; Comcast has begun embedding multiple radios in its newest Xfinity Wi-Fi routers to act as home automation hubs.

Do Data Privacy Concerns Represent the Hubs’ Saving Grace?

This trend begs the question of the fate of smart home hubs. Will these devices persist as a means of fostering interoperability in the home? In markets more concerned with data privacy, like Europe, hubs may endure as regulations give incentive for keeping consumer information more local. Hubs can also serve a useful purpose in verticals like new construction, where builders need to choose solutions that are open. However, most industry experts say no, these devices will vanish as there is consolidation among tech vendors and networking protocols, and their functionality is embedded in a home’s infrastructure. Navigant Research expects this scenario to dominate market activity, which is demonstrated in the upcoming Residential IoT Market Overview report.

 

Data Privacy Conversation Continues as Facebook Introduces Smart Speaker

— June 5, 2018

I recently wrote a blog about Facebook’s data-related scandals. In short, my message was that despite Facebook primarily operating as an online service provider, similar tech companies like Google and Amazon are investing heavily in deploying more devices in our homes. They want our data, and this is something consumers should be ever more aware of as this collection of data can have significant, real-world consequences. Earlier this May, those points were validated by reports that emerged about Facebook’s move into the connected speaker market.

Rumors of Facebook’s Connected Speaker

Facebook has been known to be working on a smart speaker since the summer of 2017. Rumors circulated that the speaker would be equipped with a touchscreen (similar to that of the Amazon Echo Show) for increased engagement with Facebook photos and its Messenger platform. Chinese iPhone manufacturer, Pegatron, was said to be building the product for a 1Q 2018 release. However, Facebook’s “week of shame” regarding the company’s involvement with Cambridge Analytica led to speculation that now may not be the best time for Facebook to launch a hardware product in the US. Instead, the company is expected to quietly launch its speaker internationally.

Europe’s Reluctance to Accept Facebook’s Tech

Unfortunately for Facebook, Europe, which was the next step in global expansion for other connected speaker companies like Amazon and Google, is also unlikely to accept the company with open arms. Given Europe’s significant regulations to give consumers more control over their own data with the European General Data Protection Regulation (or GDPR), as well as Mark Zuckerberg’s admission to the European Parliament that the misuse of Facebook users’ private information has become a serious problem at the company, Facebook may not be ready to approach this market either. So it remains to be seen how the company plans to enter the connected speaker market.

Facebook as a Hardware Manufacturer and Its Significance

The underlying message in all of this is that Facebook is no longer limiting itself to operating primarily as an online service. The company is following suit to other tech companies and deploying a physical device that has the ability to “listen in” and collect data on consumers in their homes. This market progression not only highlights the need for companies involved in the connected speaker market (and the smart home in general) to earn the trust of consumers by clearly implementing and communicating data privacy measures, but also that consumers need to be ever more conscious of the technologies they bring into their homes, and what information they are willing to give away in exchange for these goods. Unless there is clear communication, education, and awareness on the matter, the development of the smart home and the promise it shows in the future may be hindered significantly.

 

New Technology Announcements Portend a Smarter IoT

— May 10, 2018

The Internet of Things (IoT) ecosystem is about to get smarter. Leading technology vendors have recently announced new products and integrations intended to push greater intelligence to the edge, derive deeper insights through analytics, and heighten security. Utilities should take note.

Qualcomm Offering a New Chip-Based Platform

Qualcomm’s new Vision Intelligence Platform is part of this trend. The Qualcomm platform features the chipmaker’s first family of system-on-chips (SoCs) built specifically for the IoT using an advanced 10 nm FinFET (Fin Field Effect Transistor) process that produces substantially faster performance and efficiencies than previous chips. The platform’s chip models, QCS605 and QCS603, are designed to provide greater computing power for on-device cameras and machine learning. The company envisions these chips being used for a variety of applications, including robots, the smart home, and smart cameras. For utilities, these could become valuable in cameras mounted amid critical infrastructure such as substations, or in drones that monitor the grid.

Microsoft Promoting Its Own System

Similarly, Microsoft has introduced Azure Sphere, a new custom SoC operating system for the IoT. Azure Sphere has its own flavor of a Linux kernel, and includes a new security subsystem called Pluton. The idea is to provide greater IoT device security starting from the microcontroller level and moving up from there to the cloud. For example, Pluton is designed to prevent malicious code from tampering with firmware on a device, which could be quite useful for a utility or energy provider that oversees over-the-air upgradeable smart meters or sensors connected to the grid. The first certified hardware based on Azure Sphere is expected to be available later in 2018.

Other Offerings in This Market

SoftBank Group’s Arm semiconductor subsidiary announced enhanced capabilities for its Mbed IoT platform during Hannover Messe, one of the world’s largest industrial technology events, held annually in Germany. The Mbed platform, designed to help companies connect, secure, manage, and provision IoT devices, will now integrate Mbed’s Cloud solution with IBM’s Watson IoT and artificial intelligence platform. Arm also announced a collaboration with Cybertrust and GlobalSign in a bid to give industrial customers the flexibility to use their own security certificates in IoT deployments, something utilities are likely to appreciate given their penchant for managing and controlling their devices and systems in their own way.

Just a Glimpse of Market Momentum

None of these vendor moves will happen overnight, of course. They are cutting edge and will take months or even years to gain widespread adoption; some might even fizzle or fail. Nonetheless, they indicate vendors’ strong emphasis on the IoT, whether the focus is at the edge, in the cloud, or on security (for a deeper look at IoT security, see Navigant Research’s Managing IoT Cybersecurity Threats in the Energy Cloud Ecosystem). Momentum is building, and utilities need to stay apprised of how advances in IoT technologies could enhance their grid operations.

 

Facebook’s Scandal Shows Importance of Data Privacy in Smart Homes

— May 3, 2018

The world’s most valuable resource is no longer oil. It’s data. In the digital era, data not only powers various online services, but also increasingly powers the real world as devices become more and more connected. Virtually any activity a person can engage in now leaves a digital footprint, and artificial intelligence technologies like machine learning have brought to light the value in these footprints. The giants in charge of this data economy—Alphabet (Google), Amazon, Apple, Facebook, and Microsoft—have massive power and influence. Considering recent events, this is something to be ever warier about as consumers.

Facebook’s Scandal

Facebook has been under immense scrutiny over the Cambridge Analytica scandal. In short, it involves the unauthorized sale of private data to companies that used the data to manipulate the US presidential election and arguably other major global events.

Until now, the added convenience a technology like Facebook brings to our lives—such as relevant news, event planning, and the ability to connect with friends and family—has seemed like a price worth paying in exchange for our data. What this story shows about the tech titans who control our digital era is that our data is not only used to target us with more relevant stuff to buy. It’s also shaping the world we live in and making real-life impacts.

What Does This Mean for the Smart Home?

We are increasingly letting these big tech giants into our lives, not only through use of their traditional online services, but through physical devices in our homes. The increasingly popular and widely adopted devices peddled by these companies, be it smartphones, voice-activated speakers, connected cameras, or smart thermostats among copious other residential IoT devices, are creating touchpoints in the home by which these companies can collect even more data.

As consumers, we may think our data is fairly useless. The Facebook scandal shows that all the data we give away for free has immense real-world value. It’s more important than ever for consumers to be aware of the devices that they bring into their homes, how their data is being used, and the effects that can have, especially as the smart home market continues to grow.

Should Consumers Abandon Connected Tech?

This isn’t to say that consumers should stop using online services or avoid adopting smart home technologies—that is unrealistic. It means that as we continue to adopt connected devices, construct smart ecosystems in our homes, and divulge the details of our personal lives to these companies, data privacy needs to be top priority. This is increasingly becoming the case. General Data Protection Regulation (GDPR) is set to take effect at the end of May, and it will massively influence any company serving EU citizens and residents by requiring measures be taken that better protect and ensure the privacy of user data. Though this is a positive development, there is much to be done in the realm of data privacy.

For consumers, it’s important to consider the worth in convenience via technology. While the prospects of a smart home can bring a range of benefits to our lives and the bigger picture of smart grid operations, the value in what we provide digitally-driven companies should not be taken for granted. For device manufacturers and smart home tech vendors, it’s more crucial than ever to be transparent and reassuring about the investments they are making in protecting our data in order to avoid losing consumer trust and hindering technology adoption.

 

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