Consumer IoT is lagging behind industrial IoT in terms of interest, investments, and successful applications. CB Insights has found that in 2011, the industrial IoT accounted for 17% of all IoT funding dollars. In 2015, the share of industrial IoT investment rose to 40% of all IoT investment.
In a recent report citing the results of large surveys of consumers in the U.S. and other countries, Forrester observed that the IoT today “seems to open up more business opportunities in the industrial and B2B space than for consumer brands” (see also Forrester’s blog post). Similarly, in a recent report and webinar based on a large consumer survey in the U.S., IDC has concluded that “beyond security and point-solutions to specific problems, consumer IoT is still looking for a clear value proposition.”
Here are some interesting findings:
14% of U.S. online adults are currently using a wearable, and only 7% use any smart home device. Usage of connected devices in smart homes or cars is even lower in Europe. Smoke and home security monitoring are the two smart home services U.S. consumers are the most interested in, followed closely by water monitoring. (Forrester)
More than 8 million households in the U.S. already use some kind of home automation and control. The home IoT applications consumers are interested in are networked sensors monitoring for fire, smoke, water, or CO at home; seeing and recording who comes to the front door using a video camera; and networked sensors monitoring doors and windows. Consumers are least interested in networked kitchen appliances. (IDC)
Reasons for purchasing home control application: 30% cited solving a known problem, either recent or long-standing; 40% cited word-of- mouth, news about such devices; almost 20% said it seemed like “a neat solution to a problem I didn’t know I had” (!!!) and over 15% said that the device “was on sale.” (IDC)
Preferred installer for home automation and control systems in order of preference: Residential security company, myself, other professional installers, cable or telephone companies. (IDC)
Half of U.S. online adults are concerned that the monthly service cost of smart home technologies would be too high, and 38% fear the initial cost of setup would be too high. (Forrester)
36% of U.S. online adults fear using smart home services could compromise the privacy of their personal information. (Forrester)
Among those interested in home control IoT application but haven’t purchased one: High concern around cost (which is common for new applications) and unusually (for new applications) high concerns around reliability and user experience. (IDC)
31% are interested in access to the internet while using the car (i.e., on-board internet) and access to an interactive voice response system (i.e., a digital driving assistant). Telematics-enabled usage based insurance (UBI) is emerging and will disrupt the car insurance industry. (Forrester)
In 2016, 33% of U.S. online adults will use some form of IoT across home, wearables, and car. However, usage in the next two years will primarily be led by wearables and smartwatches. (Forrester)
IDC concludes that “the majority of consumers remain skeptical of the value proposition behind the home Internet of Things and are holding back for a higher overall value proposition.” In the IDC press release, Jonathan Gaw said:
“The long-run impact of the Internet of Things will be broader and deeper than we imagine right now, but the industry is still in the early stages of developing the vision and conveying it to consumers.”
IDC continues: “Winners will solve a problem the consumer didn’t know they had. Security and privacy – punished for a lack of it, probably not rewarded for having it. Voice interfaces have potential, but still need development for mainstream users.”
Forrester’s Thomas Husson and his colleagues cite a pioneering home-focused voice interface, Amazon Echo, as an example of successful consumer IoT device. “Combining the Dash Buttons’ big-data-meets-internet-of-things experiment with Amazon Echo and Alexa Voice Assistant will enable Amazon to aggregate multiple brands’ offering and anticipate consumers’ needs,” says Forrester.
The report continues: “Because consumers invest little in new experiences, they hurt little when abandoned. The consequence is that the vast majority of new IoT products will fail unless marketers develop a customer relationship that is frequent, emotionally engaging, and conveniently delivered.”
Both Forrester and IDC seems to understand what works and what doesn’t work with current IoT offerings and continue to advance their knowledge by surveying consumers and talking to enterprise decision-makers.
The U.S. government may want to pay closer attention to their (and other industry observers’) work. The National Telecommunications and Information Administration (NTIA) recently issued a request for comments which included this gem:
Although a number of architectures describing different aspects or various applications of the IoT are being developed, there is no broad consensus on exactly how the concept should be defined or scoped. Consensus has emerged, however, that the number of connected devices is expected to grow exponentially, and the economic impact of those devices will increase dramatically.
To which James Connolly responded: “How can the public comment when even Commerce can’t really define the term?”
Originally published on Forbes.com