Connected Living in the IoT Smart Home

27.02.2018
8 min.
title

In Gartner’s last release of the Hype Cycle for Emerging Technologies, the concept of connected homes has finally reached the top of the cycle along with machine learning and virtual assistants.

Gartner Hype Cycle for Emerging Technologies 2017
Data Source: https://www.gartner.com/smarterwithgartner/top-trends-in-the-gartner-hype-cycle-for-emerging-technologies-2017/

It has steadily climbed the curve from its first introduction in 2014.

Gartner Hype Cycle for Emerging Technologies 2014
Data Source: https://www.gartner.com/newsroom/id/2819918

So it’s high time to talk about this technology. We’ll explore the example of smart homes to find out if and why IoT is going to fall into the Trough of Disillusionment and if it’s reasonable to invest in IoT development.

What Is a Smart Home?

Many people use the terms connected home and smart home interchangeably, but they are not the same thing. To add to the confusion, there are also home automation and domotics. Let’s clarify the differences and similarities between them:

  • Home automation or domotics: This technology encompasses appliances such as washing machines and dishwashers, that is, gadgets using electricity to make housework easier. Today, these appliances have become intelligent, with sensors to gauge the amount of water required and thermostats to get the water to the correct temperature.

Some of these gadgets can be called “smart,” because their level of automation allows them to function independently, without the intervention of a human, such as an air conditioner or a controller that senses when someone enters the room and adjusts the temperature to suit that individual.

Smart devices should be able to learn, which means they have an AI component or are controlled by a device with an AI component, such as Amazon Echo, Apple devices with Siri, or Google Home.

  • Connected home: Such a home has local connectivity, via a local area network, protocols such as Zigbee or Bluetooth, and connection to the internet. This connectivity allows the automated devices to exchange information within the home, or with a remote device or user over the internet. For instance, a “smart meter” can use Wi-Fi to report electricity usage to the power utility.
  • Smart home: This is neither a connected home, nor an automated home, although it needs both connectivity and automation. A smart home has automated, connected, and smart devices that work together. The devices manage themselves and can control other devices.

This is why pictures of smiling people holding phones or tablets, which are ubiquitous in smart home advertising, are misleading. If you have to use a phone or a tablet to issue a command to a device, the device is not “smart.” You are using your phone in the same way you use your TV remote: it’s convenient, but not clever.

Bearing in mind the confusion between the three terms, one of the industries that really has to get to grips with the definition of a “smart home” is real estate. So in the US, CNET and Coldwell-Banker Real Estate got together to define the smart home from the perspective of the sales agent who has been asked to find a “smart home” for a prospective buyer. They have defined the elements that must be in place to earn the definition, such as a reliable internet connection, an automated security system and a smart HVAC (heating, ventilation and air-conditioning) system.

 

When Can a Device Be Called Smart?

The devices in an IoT smart home do not all have to be smart, but they should be connected either to an IoT platform or to other devices that are smart, such as voice-activated digital assistants. These can manage devices at the other end of the smart scale, such as a thermostat.

Michael Porter and James Heppelmann define four characteristics of IoT devices in the evolution to a “smart” device, namely:

  • Monitoring. Various sensors detect location, operation and condition of a device as well as the surrounding environment.
  • Control. Embedded software controls and personalizes a device.
  • Optimization. Analytical system diagnoses and optimizes a device’s operation.
  • Autonomy. AI algorithms allow for autonomous operation of a device, its self-coordination with other systems, self-diagnosis and self-enhancement. These are true “smart” devices.
Capabilities of Smart Connected Products
Data Source: https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition

So we would expect a smart HVAC system in the IoT smart home to sense someone entering the room and adjust the temperature to their taste without human intervention.

What Does the Internet of Things Bring to the Home?

The smart home offers a lot more than comfortable ambient temperatures. New devices that are supposed to make your home smarter emerge in the market every day. McKinsey identifies the following categories according to the device’s use:

Security and Safety. Sensors that ensure perimeter and internal security, as well as monitor flood and fire risk.

Utilities Management. Controllers that monitor and optimize consumption of energy, gas and water.

Wellness monitoring. Wearables that communicate vitals and monitor chronic conditions, such as diabetes or Alzheimer’s.

Smart appliances. Connected fridges, stoves, Roombas, coffee machines.

Entertainment. Music and video players attuned to the individual’s tastes.

Some of these categories can overlap: for example, Samsung has a refrigerator that can play music and control other devices with its own digital assistant, Bixby, as well as compile shopping lists.

Current Device Owners
Data Source: https://www.mckinsey.com/spcontent/connected_homes/pdf/mckinsey_connectedhome.pdf

Why Is the Move to Smart Homes Taking Longer Than Expected?

While all these intriguing devices are launched on a regular basis, and predictions are being made on consumers buying smart products (try Googling “2017 year of the smart home”), consumers’ enthusiasm does not seem to be matching all the hype.

There are several reasons that are delaying the transformation of our homes into “smart” ones. Here are a few of the most critical factors:

  • Limitations of the home’s current architecture
  • Affordability
  • Lack of the market maturity
  • Trust and data abuse

The Built Environment

One of the first drawbacks is the homes themselves, especially in countries where many homes predate electricity supply. But even a new home generally lacks the wiring needed for all these devices, as well as pervasive Wi-Fi. Consistent connectivity can be an issue as well.

There is a need for architects and builders that understand how to build a home of the future. In a report on the need to provide “cognitive” homes for an ageing population in Britain, the Institution for Mechanical Engineers estimates that 78,000 houses need to be built each year over the next decade to accommodate the older people. These houses would be smart and promote a healthy lifestyle, thus reducing the healthcare burden.

Can I Afford It?

The Samsung fridge mentioned above does not come cheap, and neither do most other devices with embedded intelligent software. While consumers are generally keen to buy one or more devices, affordability is a factor to consider. McKinsey found that shoppers in general were prepared to pay more than $20 per month for safety and security features, but were less enthusiastic about the other categories.

Customers Willing to Pay More Than $20/Month
Data Source: https://www.mckinsey.com/spcontent/connected_homes/pdf/mckinsey_connectedhome.pdf

PWC found that price was still the biggest factor in reluctance to buy a smart home device among those who had not tested the waters.

Why Consumers Dont Buy Smart Home Devices
Data Source: https://www.pwc.com/us/en/industry/entertainment-media/publications/consumer-intelligence-series/assets/pwc-consumer-intelligence-series-iot-connected-home.pdf

Data and the Trust Gap

Consumers know about the threat of their personal data being compromised via the Internet of Things, either via hacking or via misuse by the device vendor. The importance of keeping one’s personal data protected varies from country to country, but it is a factor that keeps some customers away.

In their report on “Digital Trust in the IoT Era,” Accenture revealed consumers’ feelings about the safety of their personal data on the internet. The trust level was at its lowest in Western Europe (40%) and highest in the Middle East (54%) but generally was around 50/50.

A very recent survey conducted by Cisco in late 2017 found that trust levels had not improved. This is a state of the market that vendors must seek to improve, by reducing their vulnerability to cyberattacks, providing greater transparency to consumers (37%) and providing them with more control (70%), according to the same report. Despite the overall lack of trust, though, 43% of consumers are still prepared to share more of their data if it will improve their experience and give them more control.

Still Some Way to Go

Once a technology has reached the pinnacle of Gartner’s Hype Curve, it starts to slide into the Trough of Disillusionment. Some of the factors that will contribute to the slide will be the same ones that cause the current reluctance to buy devices. A device that saves us by turning the taps or hot plate off would be a good thing, but what if it reports to our insurer every time we forget, and this affects our premium or a future claim?

These devices also have their own flaws. Like a naughty child, Alexa can have an occasional “bad hair day,” where yesterday’s request is ignored or misinterpreted today, as users in India have found out. Device vendors often neglect interconnectivity and interoperability, which can be very irritating when you have just bought an incompatible product, and this is something designers need to pay more attention to in the future. No one makes a mobile app for just iOS or Android, but the same principle is not followed in the IoT world.

Then there are the smart new devices that actually add very little value to your daily life, or even create extra work. Soon the device will be consigned to a shelf somewhere, adding to the disappointment in the smart home.

The Future Is Bright

It is up to vendors to listen to the marketplace so that they can move through Gartner’s Trough of Disillusionment as swiftly as possible, up the Slope of Enlightenment, where products will start meeting the customer’s expectations. Finally, successful vendors will reach the Plateau of Productivity, although there will be quite a few casualties along the way, such as less-than-useful devices that our children will find very amusing.

The smart home is still in its infancy; but the change will inevitably come. It’s only the time required for a technology to mature that is separating us from the moment when smart homes will become part of our daily life.