As IoT expands, one area where this technology will have the most profound impact will be in the home
Intelligent appliances you simply speak to, access to information that is embedded in your home, and sensor technologies that enable you to take control of every aspect of the spaces you live in, are the promise of IoT in the smart home.
According to research from Clutch, a leading B2B ratings and reviews firm, currently, 53% of people in the US own a smart home device. One-third (33%) plan to invest in a smart home device in the next three years.
Cost (26%) is the primary concern people have with smart home devices over security vulnerability (21%). Also, owners of smart devices think some smart home devices have cost benefits: More than half of people (53%) surveyed claim that smart home thermostats decrease utility costs. This is double the number who think a smart home thermostat increases utility costs (24%). Lowering utility costs (30%) is the primary benefit of owning a smart plug.
In their report, Accenture reveals: “The opportunities presented by the IoT, which consumers will access primarily through their smart homes, are vast. A new report from the World economic forum and Accenture says the IoT will add $14 trillion of economic value to the global economy by 2030. It estimates that increasing bandwidth and data usage could generate an additional $65 billion in operating profits for CSPs (Communications Service Providers).
“That’s a healthy increase, but only a small percentage of what’s at stake. The largest opportunities lie in providing the suite of consumer and enterprise applications and services that enable IoT to become a reality, potentially bringing in an additional $100 billion in operating profits across the industry by 2025.”
IoT in the home has the potential to transform industries. For businesses developing IoT products for the smart home, understanding the current consumer view of these devices is critical.
“We have observed the early phase of smart home with a lot of companies quickly entering, but often also quickly exiting the market,” Martin Pansy, CEO, Nuki Home Solutions told Silicon. “Now, big companies are starting to occupy their share of the market by developing leading smart home eco-systems. Without being connected to and interacting with other smart home solutions, most smart home products are not that smart at all. Therefore, customers are starting to demand this interoperability more and more. We may not yet be there, but in the long run, no company who is not open to integrating with others will be able to persist on the market.”
Your smart home
IoT in the home has been evolving for several years. Often, IoT is adopted simply because the device purchased has some form of voice control. For developers, the IoT market is expected to reach $11 trillion annually according to McKinsey.
Early players in the domestic IoT market include Nest and Hive for heating, lighting and security camera control. The Amazon Echo has seen massive success as the smart speaker is now the market leader in voice control. For many consumers, the Echo is their first experience of practical IoT. As the OEM market has adopted Amazon’s and Google’s voice control technologies into their products, voice as a control interface has become more familiar.
Says Jitesh Ubrani research manager for IDC Mobile Device Trackers: “2018 was all about getting products into consumers’ homes and both Amazon and Google excelled at this through low-cost smart speakers and multiple bundles across device categories. However, 2019 will be more about tying the various devices together to form a more cohesive experience and more importantly, layering in additional services.”
IoT in the home is also closely tied to the development of AI. All of the intelligent assistants currently on the market using AI to deliver life-like responses to user requests. The continued development and expansion of IoT is dependent on the parallel evolution of AI, as this is applied to domestic services.
Coupled with AI is 5G. The ultra-fast mobile network is needed to support the high-speed network IoT devices require to deliver their more useful services. When data can travel over the mobile network hundreds of times faster than 4G, IoT as a vast sensor network making autonomous vehicles, for instance, possible. In the home, 5G and a best-in-class mesh wifi system removes the data transmission bottleneck to create a smart environment every appliance in your home can connect to.
Safe and secure?
Is the acronym IoT more accurately the Internet of Threats? After all, with smart devices gaining access to our homes, what is the level of security these devices contain? The use of IoT as a foundation for new generations of security systems and the expansion of technologies including smart locks, could our homes be hacked?
According to the latest connected home report from Avast, two out of five (40.3%) digital households worldwide have five or more devices connected to the internet. Out of all smart homes worldwide, 40.8% have at least one vulnerable connected device which puts the entire smart home at risk, with 31.8% of these vulnerable devices at risk due to unpatched software vulnerabilities; 69.2% are vulnerable due to weak security credentials.
It is telling that the major tech firms are considering how they manage the security of their smart devices, and more importantly, the information they collect about users. Apple recently said: “We know that customers have been concerned by recent reports of people listening to audio Siri recordings as part of our Siri quality evaluation process — which we call grading. We heard their concerns, immediately suspended human grading of Siri requests and began a thorough review of our practices and policies. We’ve decided to make some changes to Siri as a result.”
Protecting the masses of IoT devices that will come onto the market and litter our homes is critical. Research from SonicWall indicates a 33% jump in IoT malware. “Historically, the goal for most malware authors was quantity of infections and now we’re seeing attackers focus on fewer higher-value targets where they can spread laterally,” says SonicWall President and CEO Bill Conner. “This shift in tactics has also seen a corresponding rise in the ransom demands, as attackers attempt to make more money from fewer, but higher-value targets.”
“What the data shows is that cybercriminals are becoming more nuanced, more targeted and savvier in their attacks. Businesses need to align to create stricter security rules within their organisations to reduce the threats that our researchers are identifying,” says Conner. “We recommend that companies deploy a unified and layered security approach that provides real-time protection across wired, wireless, mobile and cloud networks.”
Speaking to Silicon, Ken Munro, Partner, Pen Test Partners said: “We’ve seen an increasing move to IoT ‘platforms’ where the device vendor integrates an off-the-shelf cloud platform to speed up time to market. There are hundreds of these on the market, offering a full service from mobile app development, API, cloud infrastructure, even down to connectivity hardware on the device itself. Yet, many of the platforms we’ve looked at have significant security flaws. These can result in a compromise not just of one vendors’ IoT devices, but of all the many vendors that have devices connected to the platform.”
For CTOs and CIOs in the smart home space, IoT is developing at a pace which will see a raft of new products coming onto the market. As the 5G network rolls out and, consumers begin to understand the control they can have via the smart devices in their homes, they will see the benefit and want to equip themselves with IoT enabled appliances.
Commenting on how developers are currently approaching the IoT marketplace, Peter Huddleston, UK Country Manager, devolo explained: “CTOs and CIOs should be paying attention to several important aspects of smart home, as the market looks to build the next generation of products. Interoperability and uniform radio standards are key to the future of the smart home. We’ve already seen that this sector lends itself to ‘pick and mix’ buyers, who will often buy several devices from different manufacturers and expect them to work together. Therefore, an industry standard of open systems and interoperability are key for piquing consumers’ interest, especially when it comes to new additions to the market.”
The race is also on to become the developer of choice to lead the IoT market as it moves into its next stage of expansion. “The home will evolve from being connected to being smart,” concluded Ohad Amir, Chief Technology Officer, Essence Group. “Apple, Google and most recently, Amazon, have made attempts to gain leadership of the home by creating hubs and apps that would allow consumers to connect and manage all of their devices from one central place.”
Amir concluded: “Most recently, Amazon announced a new RF protocol, Sidewalk, that it presumably hopes will take the place of Zigbee and Z-Wave in the race for local wire-free connectivity. To me, if anything, this shows that the industry remains as fragmented and immature as before, with little effort to give the consumer the option of buy ‘best of breed’ devices and still have a truly interoperable network.”
In the UK the most conspicuous use of IoT in the home is the smart meter. An estimated eleven million of these meters have so far been installed. Add to this is growing use of voice assistants with entertainment devices most notably televisions, and it’s easy to see how IoT is slowly changing how we all use our homes.
Early adopters are, of course, driving the initial phase of smart connected home development. Whether value can be communicated to consumers when their washing machine, for instance, has its own app; or their fridge informs them they are out of milk, remains to be seen.
The smart city will use IoT to deliver seamlessly connected spaces to offer a range of convenient services that have so far, not been possible because of limits on bandwidth. The smart home will, of course, exist within the smart cities that are being created as you read this. IoT on a wider scale is about more than just giving consumers the ability to monitor their energy consumption with a smart meter.
Silicon in Focus
Will Vooght, Head of Innovation and Strategy, Tonik Energy
Will leads Tonik’s innovation efforts looking at the application of peer-to-peer energy trading in the market and how to make the most of solar panels in a post-subsidy world. He is responsible for harnessing the potential for technologies like electric vehicle chargers and home energy storage to decarbonize the energy system and drive down bills at the same time. Reporting directly into the Tonik Energy Board, Will’s focus is on how to differentiate Tonik from current market competitors and explore future markets to grow into.
What are the current trends in smart home technology?
Earlier in the sector, we saw a bit of disruption with technology solving a particular need – smart thermostats, intelligent security, connected cameras and lighting are just some examples. End-of-year analysis indicates that around 12% of UK households have either smart heating or lighting. This seems low, but consumer demand is there. Almost 50% of UK homeowners have indicated a likelihood of owning one of these bits of kit over the next five years.
In the smart home, voice assistants (such as Amazon’s Echo and Google Home) are very popular and, growing at a considerable rate; 2018 figures indicated that around a quarter of UK homes owned, or had access to, a digital or voice assistant – up from 11% in 2017.
When we think ‘smart home’, we normally stop at the front door. However, with the emergence and exponential growth of electric vehicles (EVs), we need to think out onto the driveway, too. EVs are roaming devices which are, by their nature, intended to be connected – whether to maps, to a charger to recharge the battery, or to the internet, for diagnostics and operating system updates.
Delivering comfort and security is a simple, lower-cost way to smarten and optimise the home. But there is far more to EV: They represent the opportunity not only to optimise the home, but also to take control of how energy is bought and sold by the home, whilst also helping to decarbonise the local energy system through intelligent energy usage.
EV’s are not conventionally considered a smart home device, but they are one of the smartest ‘appliances’ most of us will have ever own – and very soon, they will no longer be a novelty. Certainly, we can expect to see them in more and more dealerships and driveways.
What key consumer demands should CTOs and CIOs be paying attention to as they build products and services for the smart home?
The trick for the genuine intelligence of these technologies is not in the install or the use-case immediately after installation, it is in growing with customer need. That requires an intimate understanding of how users are interacting with their devices, whilst being flexible to a growing and complex number of users or use cases and, evolving your solution along with the customer.
It also requires a fine balance between what is wanted and what is predicted. The ‘faster horses’ adage is apt here – and delivering a meaningful service in the home is similar. It is about addressing the need of today, but also trying to predict the service of tomorrow.
It is also critical to think about the whole system and all user types, not merely the ones driving a lot of current demand. IoT in the home is all well and good, but configuring often complex systems, optimising solutions across proprietary platforms and bug-fixing when the internet has a temporary glitch, isn’t for the faint-hearted – and it is also not something we should expect from the mass-market.
Will the expanding IoT landscape have a massive impact on domestic appliances at some industry watchers believe?
It is difficult to predict with certainty what will happen; it all depends on semantics. If we are talking about intelligent and connected devices, then, yes – we believe that intelligent, energy-heavy load will have a transformative impact on many sectors of the UK. Furthermore, we believe that the beating heart of it is always going to be energy, and that’s where we’ll see the biggest changes driven by in-home generation, storage and EVs. If we’re talking connected fridges or smart lighting, we’ll definitely see an impact, but it’ll be a gradual tide-shift opposed to a crashing wave.
Increasing the intelligence of energy is critical to the success of a number of sectors – and it is being pushed by government policy and pulled by customer demand. Not all households can have a gas boiler from 2025 onwards; there will need ‘low carbon’ solutions, instead. This means that in order to deliver heat, we will have to rely on renewable electricity – whether in-home or from a de-carbonised energy grid. All cars will need to be EV from 2040. Clearly, these need electricity to charge them up. Moreover, device demand is increasing.
All of this is a perfect opportunity to do some really clever stuff. But we believe that true intelligence will not be a matter of controlling everything from a long list of apps. The real intelligence and huge sector (and customer) impact will come from different systems working in harmony, and doing it all without needing to configure or tweak.
We see this change also evolving the relationship we have with appliances in our homes. There is nothing remarkable about setting the temperature of the living room. True intelligence and the next challenge to the sector is delivering comfort, warmth and security without the inconvenience of managing apps. To make this even more challenging, this will all need to be done at the same time as driving down household demand and, ultimately, carbon emissions.
Is domestic IoT simply opening the door to malicious code that enters via your smart fridge but then makes its way onto more sensitive devices such as your phone where bank and payment details are stored?
The short answer is, yes. And every time we add one more connection, the risk increases. Every device will have a unique identifier or IP, and where security is lapse or vulnerable, it can act as a perfect backdoor to access some potentially more sensitive information, or to use that device as a proxy for onward nastiness.
There are a few places where the responsibility for delivering protection should sit:
- ISPs cannot realistically monitor all traffic to a home, and we probably should not enter into the territory of allowing them to have unilateral blocking rights. Nevertheless, they are, ultimately, the gatekeepers for unwarranted activity throughout their entire network of paying customers.
- IoT vendors have a significant responsibility – no one writes perfect software and, evolving them is critical to onward success and customer protection. They need to be able to act and evolve quickly.
- Legislators also have a role. The European Union is quite progressive in this space. For example, the European Telecommunications Standards Institute is establishing cybersecurity standards to ensure that any vendors operating in this space uphold those standards and act in the best interest of the users of their kit. For now, a lot of this remains ‘best practice’, which is an ultimate attempt to allow for differentiation and not to stifle an emerging sector. We hope that this is a balance that pays off and does not leave users exposed.
- Users of IoT kit hold most of the keys in their hands, but education here is poor. Users should be educated or signposted away from installing the vulnerable kit on their network, and no device should really be made publicly available. Price is normally a reasonably good proxy here, just like in most sectors. Getting something that feels cheap based on the competition is normally a decent indicator that a corner has been cut somewhere. Good vendors will need to charge for a premium product and service.
Is the IoT industry mature enough to offer high levels of interoperability that consumers will demand, as they are likely to build their smart homes from several vendors?
Broadly speaking, the answer is ‘no.’ The key reason is that everyone is competing for space, operating on their own platforms and standards, and targeting their own use case. Interoperation is a point of differentiation or a value-add service. That is why – for IoT enthusiasts and adopters – hubs, assistants or third-party digital services that bridge this gap are virtually indispensable to home optimisation today. The challenge here is that it requires a decent level of knowledge, patience and a good deal of tinkering to make things work just-so. We will definitely see these ‘bridges’ evolve over the coming years.