Some of tech’s most influential companies may be engaged in internecine digital warfare, but they shared an eerily common vision at the Consumer Electronics Show.
With lockstep precision, each company explained how it was uniquely positioned to stitch together an estimated 20 billion connected devices worldwide in a market expected to reach $470 billion in 2020, according to Bain & Co. estimates.
They conjured images of cityscapes and homes where the physical and digital worlds blend in a panorama of artificial intelligence, mixed reality, connected devices, and driverless cars—often with the command of a voice or click of a smartphone app. And don’t forget the occasional robot for menial tasks.
“If you want to look into the future, look at people,” says Shane Wall, chief technology officer at HP Inc. (ticker: HPQ), noting that connected devices will surge to 25 billion by 2020 and 70 billion by 2030. “We’ve reached hyperglobalization, where the world is completely wired.”
A day after Tim Baxter, CEO of Samsung Electronics North America, led a demonstration of the connected home through its virtual assistant Bixby, Sony Electronics President and Chief Operating Officer Mike Fasulo concisely summed up the vision at the company’s sprawling booth at the Las Vegas Convention Center. “How do we make people’s lives more enjoyable and simple?” he asks.
Samsung’s “multidevice experience strategy” included news of enhanced Bixby functionality on Samsung TVs and refrigerators, the world’s first MicroLED TV, and a connected car project with subsidiary Harman International Industries that features an “intelligent digital cockpit.”
At Sony’s (SNE) booth, Fasulo underscored the experience of a family enjoying a Sony film on one of Sony’s 4K HDR TVs while using a Google Home voice-activated speaker to dim the living room lights and set a mood.
“We’re at the very beginning of another transition in tech, just as we had with the internet,” says Greg Sullivan, director of communications for Windows and devices at Microsoft. “The separation of the physical and digital worlds is going away.”
Beneath the veneer of convenience, however, there are considerable obstacles that could sidetrack or delay tech’s utopian vision, acknowledged some of the same tech execs who aspire to a connected world.
In their pursuit of benefits that mirror the futuristic worlds of 1982’s Blade Runner, set in 2019, which follows a private detective in pursuit of malevolent androids, and 2002’s Minority Report, set in 2054, where police use psychic technology, tech’s biggest players face problems similar to the ones depicted in those movies. Both futuristic settings offer conveniences such as flying cars, robots, and interactive billboards. But they’re also bedeviled by authoritarian systems capable of predicting our every move.
In the emerging world of the Internet of Things, there are concerns over compromised privacy and security, the risk of losing human touch and empathy, and the cost and sheer complexity for consumers in making it all work.
“The challenge for the industry, in general, is to simplify the experience,” says Lenovo Chief Operating Officer Gianfranco Lanci.
CONSUMER ADOPTION of the connected home is slower than that of entertainment systems and autonomous cars because of cost, worries over exposure to hacks, and the complexity in piecing together so many gadgets from different vendors, according to a survey of 2,000 people in the U.S. by Deloitte Touche Tohmatsu.
The fear is analogous to security concerns over online payments a few years ago, says Craig Wiggington, U.S. and global telecommunication leader at Deloitte. Only 55% of consumers are willing to pay more for home monitoring, he adds, despite a “ripe” market for connected devices, faster-than-expected commercial growth of 5G networks, and the popularity of wearable devices.
As data from consumers and corporations are collected and stored in the name of convenience, they have become more inviting targets for hackers.
Cyberattacks on IoT devices soared 280% in the first half of 2017, a large chunk coming from Mirai—malware that infects IoT devices and turns them into bots, according to F5 Labs, which studies data breaches.
Millions of IoT devices go online every day, according to market researcher Gartner. By 2020, it estimates, more than half of major new business systems and processes will include an IoT component. Yet many of these devices may not be compatible with an open-security protocol for IoT devices proposed last year by ARM Holdings and Symantec (SYMC). The new security protocol would be based on technologies already in use in the financial sector and other sensitive industries.
There have been several warning signs: FLocker (“Frantic Locker”), ransomware that infiltrated smart TVs running on the Android operating system, started to appear in May 2015. And connected printers, which sit in the middle of an organization’s data stream, have little or no security, notes HP Inc.’s Wall. “It is an unnoticed vulnerability,” he says, adding that HP printers are secure.
“How do you connect on a large scale, and how do we secure it? How do we manage all our devices at home?” asks Cisco Systems’ Yvette Kanouff, general manager and senior vice president of Cisco Service Provider.
It’s a delicate balancing act, especially at a time when some U.S. lawmakers and privacy advocates are calling for regulation of the tech industry and its handling of data. “We just need to be respectful of privacy rules, country by country,” Lenovo’s Lanci says, noting that European countries are stricter than the U.S. and have already levied fines against Alphabet’s (GOOGL) Google and Microsoft.
Ultimately, the companies best positioned to profit from a connected world aren’t just smart-device makers like Samsung and Sony, but those that provide infrastructure, such as security specialists Cisco (CSCO) and Fortinet (FTNT), and storage leaders like Micron Technology (MU). Zeus Kerravala, founder and principal analyst at ZK Research, says that IoT security presents a “massive opportunity” for Cisco to double, or even triple, its $2.5 billion in annual security revenue within a few years.
“Memory and storage is at the sweet spot in what’s happening in IoT,” says Micron CEO Sanjay Mehrotra. The venerable company offers both flash memory and drives to manage and protect the vast amount of data floating among so many devices, earning it an important spot in the IoT ecosystem.
“If you don’t protect your devices, all that convenience adds up to nothing,” he says.