The Bears No.s 1 & 2: Six ways the Internet of Things may remain flat this year.
Now that we’ve offered our predictions about the Internet-of-Things risers for 2016, it seems a good place to also share perspective on the areas where we don’t expect to see a huge amount of growth forward on the year. We hope in so doing that readers get a more rounded feel for where to focus their near-term resources. The time will undoubtedly come for many of these areas to flourish, we just do not think significant advances are in the offing for the next 12 months.
- Smart cities, ever on the cusp of breaking out, will keep to a tepid state for at least another year.
This particular market remains a vexing one to watch, largely because there are just so many places ripe for addressing by IoT solutions: chief among them energy, congestion, sustainability, cleanliness and lifestyle enhancements for urban dwelling. The challenge is to overcome a complex matrix of priority-setting, politics and, candidly, network infrastructure. By and large, smart city applications call for intermittent, simple communication by inexpensive devices dispersed around a relatively compact area (I.e., in street lamps, trash cans, traffic signals, or the pavement itself from the city center to outlying villages). The requirements for any given Smart City application, therefore, are voluminous, cost-sensitive and carry a strong need to be able to “deploy it and forget it.” Satellite and cellular-based devices are great at what they do, but do not necessarily support the multifaceted requirements of urban planning.
As discussed in our “hot” trends report, the Smart City is precisely an application area that might benefit most from standardization around low power wide area (LPWA) network options. Once there’s a fully interoperable set of networks in place that can deliver coverage at an order of magnitude lower cost point than current options, and enable long-term device deployment vis-à-vis low power requirements, that’s when we’d really expect Smart City deployments to flourish as they’ve been visualized.
We believe it will be 12-15 months until LWPA options cement themselves to the point where solutions can be built upon them, and 2-3 years after that where we’ll see material impact.
- Despite the raves for Amazon Echo over the holiday season, Smart Homes won’t reach new heights this year.
As we see it, Echo falls more in the realm of a personal assistant than a breakthrough smart home control hub. More directly, we see it as a novelty item whose demand will wear off over time, as opposed to becoming a “can’t live without” staple in the average home. Much like a child’s Christmas gifts that get played with for the week following (if you’re lucky), Echo is destined to collect dust on a shelf somewhere.
That assessment brings us to the real trouble we’ve seen with the Smart Home market, mainly that it resonates most with a relatively niche market, composed of people that like to tinker. As a whole, we believe consumers will largely remain apathetic to the “smart home” and connected lifestyle, largely due to the high cost of these items and lack of tangible return on investment.
To wit, so many of the so-called “Smart Home” products could just as easily be classified as “dumb.” As the San Francisco Chronicle so eloquently puts it, these applications are designed, it seems, for the terminally lazy. Do we really need to be able to ask an electronic assistant how much gas is left in our car’s tank? Or own a wireless robot “finger” that remotely pushes buttons from a Smartphone app?
Apart from some truly meaningful home security and safety matters that connectedness can and will continue to enhance, the IoT as a home automation tool is largely a hacker’s playground, with too much fiddling and tinkering still involved to let it go mainstream this year.
More bearish predictions to come...