Internet of Things taking off amidst privacy concerns

by Larry Magid:

Apple Watch is one of the newer IoT products

Apple Watch is one of the newer IoT products

From a product standpoint, the so-called Internet of Things or IoT is in its infancy but, if some prognosticators are correct, it’s poised for enormous growth over the next couple of decades.

Intel put the size of the IoT market at 2 billion devices in 2006, 15 billion in 2015 and an estimated 200 billion by 2020 — less than five years from today. IDC predicts that Internet of Things spending will reach $1.7 trillion by 2020.

The term is used to describe the growing number of devices that use wireless technology to connect to the Internet and — in many cases — other devices. It includes wearable devices like the new Apple Watch, smart door locks that you open with your phone, lights that turn on and off automatically from controls set by your phone or computer and “smart appliances” that you can control from afar. I have a Wi-Fi enabled coffee maker from Belkin, which is really a high-end Mr. Coffee device that’s connected to my home network and controllable through my phone. It also has an old-fashioned on-off switch, which is a good thing because — once the novelty wore off — it’s actually easier to control it manually than bother with using the phone.

Some devices make sense

While a smart coffee maker may not be such a brilliant idea, there are plenty of IoT devices that make a lot of sense. Belkin, with smart home products controlled through its WeMo app, also makes remote controllable light bulbs, switches, door and window sensors, appliance modules and partners with Holmes on smart heaters, humidifiers and air purifiers. At CES this year, the company announced its WeMo water monitor, expected late this year, that’s perfect for drought-stricken California.

I no longer water my lawn, but — for those who do — there are now IoT devices like Cyber Rain which uses the “cloud” to go online and check for real rain clouds so that it doesn’t water while it’s raining or likely to rain.

SmartThings security start-up kit

SmartThings security start-up kit

One of the leading IoT companies, SmartThings, got its start on Kickstarter in August 2012 with a campaign that raised more than $1.2 million from nearly 6,000 backers.

Two years later it was sold to Samsung for around $200 million, according to TechCrunch.

At the Truste IoT Privacy Summit in Menlo Park last week, SmartThings co-founder and CTO Jeff Hagins said that the company was founded after the Colorado vacation house of his co-founder, CEO Alex Hawkinson, suffered enormous water damage in 2011 because the power went out and the pipes froze burst and when the power came back, they flooded the house. That led to the idea of giving a house a “voice” so that it could call for help if something went wrong. The SmartThings platform now supports all sorts of sensors including water, moister and smoke detectors along with door locks, light switches, motion cameras and anything else third party developers dream up. At the heart of system is a smartphone app and a $99 SmartThings Hub that can connect your phone remotely to hundreds of devices from multiple companies using a variety of connectivity.

1994 all over again

Another speaker at the IoT Privacy Summit likened today’s IoT products with consumers’ online experience prior to 1994 when the Mosaic Netscape browser was released. There were early adopters using the Internet and online services, but it wasn’t until Netscape that it started to go mainstream. In 1993 there were 14 million Internet users worldwide, according to Internet Live Stats. Now there are more than 3 billion people online.

1994 was also the year that I wrote “Child Safety on the Information Highway,” one of the first booklets warning consumers about privacy, safety and security dangers for children, which reminds me of the privacy, safety and security concerns that were raised at the IoT Privacy Summit. Back then I had to speculate a bit about online dangers. There was no real data on how people were using online services so I had to imagine what could go wrong. More than 20 years later, we now know that some of the risks I worried about back then were a bit overblown while I may have underestimated other risks that only became clear years later after tens of millions more people started going online regularly. Today people worry about all sorts of IoT dangers ranging from our health data getting into the wrong hands to drones crashing down from the sky, but we don’t really know yet how things will play out when these devices become mainstream.

Privacy concerns

We do know that the Internet of Things raises privacy concerns and, based on the conversation at the Summit, it’s also clear that we need to re-think the privacy regime. Things like “notice and consent” where people check a box saying that they’ve been notified about how their data will be used, doesn’t even work all that well on the web or mobile devices, but with IoT, people will be using devices that don’t even have screens and keyboards and our privacy will be affected by sensors in our environment that we may not even have control over.

The industry folks and privacy professionals gathered in Menlo Park didn’t always agree on strategies to protect privacy in the age of IoT but there was one thing they did agree on. The industry must come up with best practices to protect consumer privacy and ways to educate consumers to protect their own privacy before governments do it for them with regulations that could stifle innovation.