Making Dumb Devices Smart: Is This Any Way to Make a Living?

The frantic race to convert quotidien appliances into ostensibly smart, even brilliant, avatars of a newer, better technological age may not, as yet, have accomplished its primary task.

But it has thrown into high relief the larger question of whether this is really going to improve lives while saving money.

In fact, it has also posed the even more uncomfortable challenge as to whether anyone can make a living, let alone a killing, by slapping some electronics on machines with which humankind has comfortably cohabitated for decades, if not centuries and then charging a substantial premium for the privilege.

Taken as a practical exercise in upgrading the lifestyles of the median and obscure, this is not looking like a home run. As an attempt to experiment with the possibilities that innovation provides, it could be useful as long as one understands the odds of any single device crashing through the clutter are about as long as those in hitting the lottery.

The challenge tech faces is that tons of money keeps pouring in, hoping to monetize whatever ideas make beyond delusional to potentially presentable. Apps have proven to be of limited economic interest. Maybe the internet of things will prove to be the goldmine people are hoping it will be. But experience suggests that the gap between hope and glory remains as wide as ever. JL

Richard Waters reports in the Financial Times:

For most everyday objects, simply adding 'smart' as a marketing tag will not get very far. There is also the deeper question of how to make money.
Another Consumer Electronics Show, another batch of unlikely-sounding ideas for connecting things to the internet.The industry’s annual gathering in Las Vegas has become a showcase for such things. From this year’s line-up: snowboard bindings that track a rider’s weight distribution; activity monitors to make sure your dog is getting enough exercise; and kitchen scales that connect to a smartphone app.Such examples are the latest evidence of the difficulty the consumer tech world is having in feeling its way towards the breakout applications for its next big hope: the internet of things. The problem is not just finding a worthwhile use for all the items that could, in theory, be given a new lease of life. There is also the deeper question of how to make money.Three main options present themselves. The most obvious is to charge a premium for “smart” versions of “dumb” things such as snowboards, dog collars and scales. The default is to add sensors to familiar objects, then connect to an app so the owner can monitor and, in some cases, control it.
For many things encountered in everyday life, this will be of limited use. Most people are likely to be perfectly happy with the familiar analogue interfaces. There is not much upside to opening a smartphone app in order to turn the lights on or open the front door, and the attractions of doing such things remotely over the internet seem limited. For most everyday objects, simply adding “smart” as a marketing tag will not get very far.
A second, more promising approach to making money will come from using the new connectivity of everyday devices to turn one-off hardware sales into ongoing services. Gadgets that monitor a home for security or track the wellbeing of an elderly relative who lives alone are obvious examples.
Other uses could involve inanimate objects that monitor themselves and report back when they are wearing out, need refilling or are at risk of breaking. The costs of servicing, replenishing or replacing could be rolled into regular subscription payments, doing away with some “upfront” costs for customers.
The third — and most intriguing — business opportunity is also the one that is furthest off. It will come from using data collected through a pervasive network of gadgets to make the world work better. The first examples already exist, such as domestic heating systems that come on when they sense you are about to arrive home.
In theory, with more data and a better understanding, the technology could start to anticipate and satisfy a growing range of users’ needs and wants. The technology itself would fade from view. Instead of constantly looking at screens and opening apps, the most that a user would need to do is issue the occasional voice command.In this world, the technology would become invisible and automatic. Goods and services could be provided as needed, once the technology understands a user’s preferences.
Going out to a meeting? No need to open the Uber app — a driverless car arrives at the door when you are ready to leave. Pricing would be negotiated in the background, machine-to-machine.
For the data-gatherers, the test will be to find the most worthwhile applications, without stepping into the creepy or the invasive. Companies that succeed in this new data economy will have to become adept at using personal data to inform the services they provide while also repackaging it for sale to third parties in the most appropriate ways.
For instance, users will benefit from understanding more about their health or how to manage the risks they run in their everyday lives — but the same information will also be exceedingly valuable to healthcare providers and insurance companies, not to mention sellers of nutritional products, safety equipment, exercise machines and many other goods and services.
It is not just that the infrastructure and the value chain for this pervasive data-gathering still need to be assembled. The use cases, security protocols and privacy regulations are all in gestation.
The weird and wacky gadgets on display at CES are a reminder that the fervid imaginations of the techies are still working overtime — but also of how far off the returns from the internet of things still lie.