IoT news of the week for March 9, 2018

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Haier’s business transformation takes Six Sigma to the new era:  For anyone trying to figure out what digital transformation will actually mean for their business, bookmark this article by Zhang Ruimin, chairman of Chinese appliance firm Haier. In it, he writes about a new business model Haier developed called rendanheyi. As he explains, “Ren refers to the employees, dan means user value, and heyi indicates unity and an awareness of the whole system.” He shares how Haier exported this philosophy to the acquired GE Appliance group and explains why it matters for what he calls the IoT economy. It also ties into Bill Ruh’s thinking about designing your product for the end user experience. Ruh is the chief digital officer at GE. (strategy + business)

Another vote for IoT helping the planet: We’re going to see a 1.5 times increase in energy consumption over the next 20 years. Ensuring that we produce that energy safely and don’t waste it will mean greater connectivity in the energy grid and the components that comprise the grid, according to Andy Bennett, senior vice president of IoT EcoStruxure at Schneider Electric. The article gives an overview of a related talk he gave, which combines the much-derided connected hairbrush from CES 2017 with connected breaker boxes. (Automation World)

Now your factory sensors can have NB-IoT: A company called u-blox has built and certified the first NB-IoT module to be used in harsh industrial environments. This could allow the cellular operators to take a slice of the industrial sensor market, where concerns over security and tough RF environments have many using proprietary wireless standards or even wires. (Electronic Engineering Journal)

A security challenge I hadn’t thought of: This article talks about why companies release insecure IoT products. Much of this ground has been covered before, but I appreciated its perspective on how vendors of insecure products are loathe to recall their products if they can’t patch a flaw with an over-the-air upgrade. The article notes that many startups facing a recall would go out of business, leaving users worse off. The example it gives is the first generation of the iKettle, which had a tremendous flaw. Successive generations fixed it, however, and the company has gone on to build some very cool, and secure, products. The moral here may be not to buy first-generation products from startups, but that’s a pretty crap lesson to take from this. (PenTest Partners blog)

OCF combines with industrial IoT group: The Open Connectivity Foundation, which is currently trying to create interoperability standards for the IoT, has partnered with the Alliance for Telecommunications Industry Solutions (ATIS). The groups will cooperate to develop an open-source integration to help devices and services work with both the OCF standards as well as the one M2M standard. I’m still waiting on more OCF users and use cases, but maybe this just takes time. (ATIS)

A thoughtful take on Alexa ads: Right now, Amazon sees tremendous benefits from the success of Alexa, but the people who make the device so compelling may not see any revenue from their efforts. Some developers do get paid for their skills, but so far, big brands are not monetizing their efforts. This article explores how that may change in the future and what an ad on a smart speaker platform might look like. (Nieman Lab)

The LoRa Alliance gets a new CEO:  Donna Moore will replace outgoing Chair and CEO Geoff Mulligan as CEO of the LoRa Alliance, the group driving the creation and use of the LoRaWAN standard. Prior to this, Moore was CEO of SpireSpark, a company that designs, builds, and manages worldwide certification, compliance, and conformance programs. She was also executive director of the Digital Living Network Alliance (DLNA). DLNA was a popular but glitchy standard, so my hope is that LoRaWAN doesn’t head down that path. (LoRa Alliance)

Look, it’s a new IoT blockchain effort! Alibaba has signed a partnership with Xiamen ZhongChuan IoT Industry Research Institute to promote the Waltonchain block chain for smart cities’ efforts. While much of the world focuses on blockchain technology as a speculative cryptocurrency, I’m stoked about its ability to create a unit of trust and a means for transactions between millions of machines. Other efforts in this space include IOTA, Computes, and plenty more I haven’t focused on yet. (FinanceMagnates)

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The maker of Schlage locks creates $50 million fund for IoT

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Allegion, the $ 2.4 billion company that makes Schlage branded locks, has created a $ 50 million fund to invest in the internet of things. This is Allegion’s first foray into corporate investing as a formal fund, although it has made investments prior to the fund’s creation.

Rob Martens, a futurist at Allegion and president of Allegion Ventures, will lead the three-member investment team. He says the goal of the fund is to find and assist startups trying to develop technology for access and for security and safety. This could be in the home or in office and industrial settings. He’s not exactly excited for startups trying to enter the consumer IoT space at the moment given the pressures they face to support their products over a long period of time and the pressures that can put on profitability.

However, he says many cool technologies aimed at the consumer market might be suited for industrial or enterprise environments. In those cases Allegion could be the right partner to help a startup break into those new markets. “The lion’s share of our business is not on the residential side, it’s on the commercial side,” Martens says. “With our assistance and our experience in the space we might help [a startup] accelerate their product into those commercial markets.”

Historically, corporate venture firms invest at later stages once a product and strategy is fairly clear for a startup. Allegion plans to invest earlier.  Martens is interested in seed, A and perhaps B stages of funding. Martens says he expects to stay involved in investments for five to seven years, noting that Allegion may also choose to expand the fund at such time if it’s needed.  Like many corporate venture funds, Allegion is treating this as way to advance technology it’s interested in seeing, as opposed to focusing solely on returns.

So far the internet of things has proved fertile for corporate-backed venture funds, with Amazon investing in nine companies through its Alexa Fund and insurer American Family Ventures putting money in five startups as of the middle of 2017. Corporate venture firms are also active on the industrial side. Back in 2016, CB Insights noted that five of the top 12 IoT investors were corporate venture funds, including Intel Capital, Qualcomm Ventures and Cisco Ventures.

Many of those corporate investors become buyers of new industrial or smart home technology.  So it’s possible that as Allegion invests in startups helping secure our world or improve the economics of the internet of things, it will find an idea that’s too good to pass up.

For more, check out Martens’  interview on this week’s Internet of Things Podcast.

 

Stacey on IoT | Internet of Things news and analysis

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GreenWaves Technologies joins the race for machine learning at the edge

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The GAP8 processor block diagram for those of y’all who like block diagrams!

A few weeks back, I wrote about the need for machine learning at the edge and what big chip firms are doing to address the challenge. Even as Intel, ARM, and others invest in new architectures, startups are also attempting to innovate with new platforms.

GreenWaves Technologies, based in France, is one such company. It has built a machine learning chip that offers multiple cores and low-power machine learning at the edge. The chip is called the GAP8 application processor. GreenWaves CEO Loic Lietar says the GAP8 processor can offer always-on face detection with a few milliwatts of power, indoor people counting with years of battery life, and sub-$ 15 machine vision or voice control for consumer applications.

But what’s really fascinating about GreenWaves is that it has built this chip with so little in funding. The company has raised 3.1 million euros ($ 3.8 million) so far, much less than a traditional semiconductor startup. And yet it’s gotten all the way to producing chips based on its design, with a development board coming in April. The reason GreenWaves could do so much with so little is because it’s building on a new open-source hardware architecture called RISC-V.

RISC-V was created eight years ago as a project at UC Berkeley aimed at building low-power chips that use minimal instruction sets. An instruction set governs how software talks to the actual computing elements on the chip, and anyone can use it to build their own designs. By comparison, Intel keeps its x86 instruction set to itself (and AMD), while the instruction sets of ARM and MIPS are licensed out for millions of dollars. (For more on this dynamic, here’s a good article.)

GreenWaves’ Lietar says the cost of building a new chip using ARM’s instruction set would start with a $ 15 million license and escalate from there. But with RISC-V his engineers could simply download the code and get going. Of course, to design a chip at this level still requires sophisticated engineers experienced in building processors. However, GreenWave’s founders hail from ST Microelectronics and have lots of chip design experience.

I’m excited by GreenWaves’ chips, but I’m even more excited that in an era when we are going to need different types of processors designed for low-power, edge computing jobs, there’s potentially a way to innovate in silicon at a lower cost. Because in my opinion, silicon is where your innovation starts. The capability has to be there in hardware before you can do new things with software.

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Raven preview: A security focused connected dash cam for your vehicle

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Looking to add a connected dashboard camera to your car? What if that device could also provide a glimpse inside your car on demand from your smartphone? And if that’s not enough, how about the addition of vehicle security, GPS and dashboard telemetry? If the answer to all of these questions is yes, Raven might be right up your alley.

Raven combines a security camera with an diagnostics and vehicle information in a single device the size of an Xbox Kinect. I’ve been using one with beta software  in my 2017 Chevrolet Volt for testing. The cost is $ 299, although you can save $ 30 if you pre-order before shipments begin in May. There are also three levels of required service plans to cover the integrated LTE service, ranging from $ 8 to $ 32 a month.

I mounted Raven on the windshield of my Volt, but you can also mount it right on your dashboard. The device is powered through your vehicle’s OBD-II port, which also provides it real time information such as your current speed and fuel level. The folks at Raven say that your car must be a 2008 model year or newer because even though older vehicles may have an OBD port, they use an older protocol that doesn’t support all of Raven’s features. Once plugged in and mounted, you use the Raven app to connect the device to your phone.

Setup was super simple although the first live image from the rear-facing camera was upside down. I didn’t troubleshoot it and it never happened again with any future image captures. I suspect the Raven was still in its setup mode and the integrated accelerometer wasn’t quite up to speed at the time.

So how well did Raven work during my drive tests? Pretty good, at least for the features that are currently supported.

Since the device doesn’t ship until May, some of the functionality is still in the works. Specifically, I couldn’t test one of the features I was really looking forward to: Notification alerts while the car is parked. These security-focused events trigger if there is are loud sounds, smashed glass, if the car is bumped or moved, or if a door is opened. This vehicle security aspect can really help Raven stand out from a standard dash cam, so I can’t wait to see the alerts added in a future software release.

I was able to see real time vehicle telemetry such as current speed, direction, and engine RPM (although I don’t use the engine much on the Volt). All of these data points (including turn-by-turn navigation directions, again coming in a future release) can be shown on the Raven’s screen, which is handy at eye-level. You can choose which two data points to see on the easy-to-read display.

The Raven app also creates a calendar-driven history for all trips, complete with downloadable clips so you can review or even share your driving experience or in-car shenanigans. I could see the latter being fun with the family on a long trip as we do our poor imitation of “Carpool Karaoke”, for example.

One little gotcha in my testing: Although Raven has LTE built in, I had to connect my phone directly to the device via Wi-Fi to get my stored videos. I felt like I wasted a bit of time just sitting in my parked car to get those but I can see that being addressed in the future.

After I did get those videos downloaded to my iPhone X, they looked fantastic. Here’s one of a 26 mile round trip I did for lunch. (Yes, I drive 13 miles for a good bowl of soup in the cold, northeastern US winter weather).

I like the trip history Raven creates: It lets you choose from the full timelapse to short clips during parts of the trip. The shorter videos include audio, which I found to be less than stellar. However, the Raven folks know this is an issue and they’re working on it.

While viewing trips from the front-facing camera is fun, seeing inside the vehicle is an important standout feature. Maybe more so once the parked alerts are enabled: I can imagine someone bumping the car and having Raven notify me so I can quickly do a live look around. I do wonder how effective this will be though: You’re looking through the cabin of the car which may not be ideal for seeing exactly who or what bumped your bumper.

Note that the main difference in the pricing plans has to do with how many live, 720p remote check ins you plan each month. You get 60 for $ 8, 120 for $ 16 and 240 for $ 32 a month. For all plans, you’ll also get the GPS location of your car, gas level, driving history, vehicle diagnostic reports and trip sharing with others. The latter two features are also in the “coming soon” category, so I couldn’t test them.

Overall, I like the Raven, but I don’t know that I’d buy one, even after its full feature set is present. The main reason is that my relatively new car already has most of the same features. I can use GM’s app, for example, to get vehicle diagnostics or the car’s location and I can remotely check or lock the doors. And many newer vehicles are including an LTE radio for optional Wi-Fi hotspot features. However, I can’t see inside my car on demand, nor do I get alerts if something happens to it.

So the appeal here is for older, less connected cars and for people that want the security features and alerts that a dual-facing dash cam can provide. If you’re one of those people, Raven may be worth the price as it fleshes out its feature set over time.

Stacey on IoT | Internet of Things news and analysis

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Why the smart home still has a Wi-Fi problem

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Smart, mesh Wi-Fi systems, such as the Eero, don’t always play nice with IoT devices.

How many times have you connected a device to your home Wi-Fi network and after a few hours — or days — realized it wasn’t working correctly? Maybe it drops offline or sucks battery like a frat boy doing a keg stand. Perhaps it doesn’t get online at all, and during a support call you discover the problem is the fancy mesh Wi-Fi system you’ve bought.

Despite all the attention paid to improving Wi-Fi for the internet of things, some devices still struggle. This is a known problem. Google, for example, notes that its Wi-Fi system doesn’t work with certain video doorbells. In other examples, owners of Eero devices have complained about the WeMo gear hopping on or off the network. In several cases, both Kevin and I have experienced trouble with a device on our own mesh networks.

After my own recent challenges getting a connected mirror onto my network for review purposes, I decided to dig into the problem in order to understand what on earth is happening.

Basically, consumers and device companies are currently in the middle of a big shift in how Wi-Fi works. In the last couple of years, the makers of Wi-Fi chips, seeing the need for more robust networks, started pushing more intelligence to the access points.

This happened in enterprise Wi-Fi a while back, and now it’s happening in the consumer world. Where once the devices themselves had the intelligence for and job of managing their own connections to a single dumb access point, now there are too many potential end points in a home network for those connections to be seamlessly made. Rather than letting them fight it out, however, instead the routers will decide.

But even as the home world transitions to smarter routers, older connected devices are still out there trying to play by the rules of the past. Gopi Sirineni, vice president, product management, at Qualcomm, calls these devices rogue clients. Currently there are three ways those so-called rogue clients can experience connectivity troubles.

If the rogue client is smart enough to try to manage its connection for itself, it spends much of its time in conflict with the router’s instructions, much like a teenager might fight with their parent. In other cases, a rogue client isn’t smart; in fact, it’s so dumb that today’s smarter routers can’t really communicate with it. In that circumstance a dumb client device might try to repeatedly connect in a band that’s already congested. Because the router can’t communicate with the device to tell it to hop over to another band, it has to simply dump it off the congested band. The dumb client will try to get on its preferred band until it figures out it needs to switch to a new one. These successive tries and failures lead to intermittent connectivity.

And finally, there’s an associated challenge: when rogue clients require too much attention from the router.

In that case, what likely happens is the rogue client is experiencing a loss of signal strength that the smart router will try to address by telling the rogue client to hop to another access point in the mesh. But since the rogue client can’t really communicate with the router, it keeps trying. That subsequent cycle of trying to communicate with something that effectively can’t listen takes up too much time, so eventually the router just ignores that client’s requests.

From the user perspective, this rogue client/device (often one that roams around the home) just stays offline. Sirineni notes that in this final case, if the device is stationary (like a thermostat or doorbell), eventually the network will assign it to the closest access point and the problem should be solved. But during setup this can be annoying because the device can’t get and stay online.

So that’s what’s going on in the home. And a solution to many of these issues will come in a Wi-Fi Alliance specification called AP SIG. Kevin Robinson, the Wi-Fi Alliance’s VP of marketing, says the org hasn’t publicized these efforts, but that they should be finalized later this year. Until then, he tells people they should buy Wi Fi CERTIFIED devices.

I’m not sure that will always solve the problem. One of the challenges associated with connected devices, especially newer ones that early adopters might try, are that the first production runs of a device might use older, cheap modules that may have been certified several years ago, but aren’t up to current standards.

In the case of older modules, they may not even get software updates to improve their functioning, because they don’t have the memory on board the chip to handle newer skills like communicating with smarter access points. These modules typically use older versions of the 802.11 radio standard and work on the 2.4 GHz band. Wi-Fi radios can use two different spectrum bands: 2.4 GHz, which allows data to travel greater distances and through walls, but is heavily congested, and 5GHz, which is less congested and thus used for big bandwidth needs, but can’t travel as far.

Thus, 2.4 GHz radios have gotten a bad rap. Companies try to tell consumers that their 2.4 GHz devices won’t work on a multiband network such as those used by modern routers. They claim the solution is to create a separate, 2.4 GHZ-only network for those devices. But if that’s the case, all 2.4 GHz devices should be affected, and they are not. Nick Weaver, the CEO of Eero, which admittedly has a dog in this hunt with routers that hide the two bands from devices, says that 2.4 GHz devices can’t see the 5 GHz band, so they are effectively on their own network.

From his point of view, modern 2.4 GHz-only radios shouldn’t have a problem meeting the demands of today’s smarter routers. His advice to consumers is to buy brand-name products from the top vendors because those tend to offer the most support and use the right Wi-Fi modules. In cases where there are problems and the device has a large audience, Eero works with the device maker to solve any issues the device may be having on an Eero network.

But all of this knowledge offers little consolation after you’ve splurged on a $ 200 thermostat and just want to get it to work. Unfortunately, we’re still in a time of change, and customers may encounter the occasional device that won’t get on or stay on their network. For device makers, this period of adjustment means they have to spend more time testing their products on different types of networks and with different configurations.

This is the approach taken by connected camera and security system maker Canary. “The way we think and approach [mesh Wi-Fi routers] at Canary is very similar to our approach to Android devices. While iPhones are generally one-size-fits-all when it comes to app development, Android phones each have unique standards and features which can pose a challenge for implementing a consistent consumer experience,” says Canary CEO Adam Sager. “New and constantly updated Wi-Fi networks are similar in this way — and if you recognize this early by constant testing and retesting, like we do at Canary, these challenges can be addressed quickly to avoid device interoperability issues and deliver consistent experiences for consumers.”

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Podcast: Mobile World Congress news and a deep dive into IOTA

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The Google Clip camera retails for $ 249.

The big news from this week has been Amazon’s proposed acquisition of Ring for $ 1 billion or more. Kevin and I explain the deal and share our concerns before turning to the issue of smarter cameras, including the recently reviewed Google Clip. From there, we discuss news from Mobile World Congress and then dig into financings, Google winning over a former Alexa exec, the death of Staples Connect, and a new device from Fibaro. This week’s guest is Dominik Schiener, who is a co-founder of IOTA, a distributed ledger for machine transactions. It’s a fun interview.

 

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IoT news of the week for March 2, 2018

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CyberX raises $ 18M for industrial IoT security:  CyberX, an IIoT and industrial control system security company, has closed $ 18 million in Series B funding. So far it has raised $ 30 million from investors which include Norwest Venture Partners, Glilot Capital Partners, Flint Capital, ff Venture Capital, and OurCrowd. CyberX was founded by Israeli security experts and has seen its sales grow 3x in the last year as more companies pay attention to the risks involved with bringing their factories and industrial operations online. The company monitors network traffic to understand risks and says it can detect them in less than an hour. (CyberX)

Silicon Labs gets into Wi-Fi: For the first time in its history, chipmaker Silicon Labs is offering a Wi-Fi chip. The company says this chip is specifically designed for internet of things devices as opposed to PCs or smartphones. As such, it offers lower power consumption, the ability to work in congested environments with many other devices and radios, and a reduction in the transmission of data when such transmission is not necessary. To date, Silicon Labs has been focused on other IoT radios, so this news means that Wi-Fi has apparently finally made the cut for Silicon Labs’ customers.

How to think about AI: With the massive amounts of new and old data available thanks to the internet of things, companies are rapidly deploying machine learning to make inferences from that data. This article by my friend Alistair Croll explains how those AI models work and why it’s essential to understand the machine’s objective before we start allocating more tasks to artificial intelligence. This is an especially good read for someone trying to grasp the basics of the technology behind all of those ethics in AI conversations. (Medium)

Give 15,000 hacked thermostats four days and…hackers can generate $ 1,000 by using the spare computing power to mine cryptocurrencies. According to a presentation by security firm Avast, hackers can get into poorly secured connected devices and use their compute power for mining. What this ignores is that many connected devices have such little processing power that the benefits of compromising an individual’s home are low. Instead, look for hackers to go first for higher-value targets such as older routers, smart cameras, and perhaps TVs. (Fortune)

Medicine meets Microsoft’s Hololens for a space age doctor visit: This profile of Nomadeec, a French startup that is building an app for Microsoft’s Hololens, shows how the worlds of augmented and mixed reality could change the practice of medicine. Like some of the industrial IoT applications for Hololens that help guide factory workers through complex tasks, this app uses mixed reality to provide detailed patient information in a scannable format for doctors. While I think the consumer AR and MR apps, like placing a stormtrooper in your picture, are silly, these have real value. (Medgadget)

Gartner called and it wants its buzzwords back: This week a company called Zededa launched with $ 3 million in funding so it could create a “completely new technology stack that creates a service fabric essential to achieving the hyperscale that will be required in edge computing.” That sounds really interesting, but that’s as close as the release gets to telling me what the “distinguished roster of industry veterans”  from “legendary companies” plans to actually do. And while I agree that edge computing is a “new paradigm,” I’d want a bit more detail from a company launch. All I have today is a mishmash of buzzwords, including machine learning, AI, edge computing, “OT leveraging IT,” and more. If anyone signs up and wants to explain what the heck this is about, I’d love to hear from them. (Zededa)

Who’s job is security? There are dozens of reasons IoT security is hard, but this transcribed conversation between experts covers a lot of them. Going deeper than the platitude that companies have to design with security in mind, the discussion covers the role of insurance companies in pushing companies to further secure their products, how to ensure security throughout your supply chain, and why security is a never-ending job. (SemiEngineering)

The Internet of lunar things: Vodaphone and Nokia are going to build a 4G cellular network on the moon, and while I have my doubts about it, I love thinking about networks in space. the initial lunar network will provide connectivity to two rovers , but is imagined as a stepping stone to communications for missions further out in the solar system. (Space.com)

Amazon to buy Ring: This week’s big news in the smart home was Amazon spending more than a reported $ 1.2 billion to buy Ring, the purveyor of about 1.2 million video doorbells. I discuss what the deal signals and why Amazon bought it over on the site. (StaceyonIoT)

CorrectionLast week, we incorrectly gave the date the Lighthouse intelligent cameras would ship. It is available now, not in September. 

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Lennar’s bet on the model smart home

The brains of the Lennar model home are mounted cleanly by Amazon’s smart home experts and housed in a plastic closet in the bedroom. Lennar uses plastic as opposed to metal cabinets so wireless signals can escape. Photo by S. Higginbotham.

The home was like hundreds of others located in planned communities across the state of Texas. Limestone and wood on the exterior and browns and beige throughout. But if you lived there, you could open your front door by simply touching its hardware. If you walked into the media room and called out, “Alexa, party time!” the lights would turn red and Stevie Ray Vaughan would start playing.

I was on a tour of a four-year-old Lennar model home just south of Austin to see what new homeowners might get as part of a spate of new packages homebuilders are offering buyers. I was there to see what builders thought mainstream American wanted in a “smart home.”

From my perspective, it wasn’t much. A Ring doorbell and Kevo lock technology (in a Baldwin fixture) graced the front entrance. Lutron lights, Sonos One speakers, Honeywell thermostats, and Echo Dots filled the home. The shades rolled up and down on command. It wasn’t an intuitive smart home, but its set-up was easily comparable to high-end pre-programmed home automation systems from Creston, Savant, and that ilk.

Lennar offers these as a base feature. And instead of your CEDIA installer, Lennar works with Amazon’s experts, who aim to be the equivalent of Best Buy’s Geek Squad. David Kaiserman, president of Lennar Ventures, says that the homebuilder went with Amazon as a partner because it was a brand associated with excitement.

This was a relatively recent switch. Lennar had announced it would work with Apple to build a HomeKit-compatible home as far back as 2016. But last September, it switched to building with the Amazon ecosystem as the brains behind its automation.

Lennar now offers these features as part of all its new homes, and it’s not interested in keeping the data generated by your connected devices to build any sort of add-on service. The devices are yours; aside from connecting the homeowner with Amazon’s experts, Lennar doesn’t want to get involved.

But it does have a really interesting opportunity. Kaiserman told me that two-thirds of Americans live within 50 miles of a Lennar model home, which gives Lennar a chance to introduce people to home automation in the environment in which it will be used. Much like B8ta, a retail store for connected devices, Lennar sees its model homes as a potential new place to sell the smart home.

Consumers might not buy a Lennar home, but after touring one, they might decide to pick up some Hue bulbs or a Sonos One. For those that do buy a Lennar home, its partnership with Amazon means that when a consumer decides to add more products to their home ecosystem, they can order them on Amazon and they’ll arrive preconfigured to their account.

All of which will help people see the value in connected devices and get those devices online — two hurdles that have so far held people back from buying smart home devices. It also takes care of the installation challenge associated with installing light switches or locks. Finally, in a conversation with the homeowners, the Amazon expert will figure out what kind of priorities the homeowners have and which automations to program.

I have been waiting for AI to solve this challenge of figuring out good IoT use cases, but it seems Amazon’s willing to throw people at the problem. And Lennar’s willing to introduce those Amazon experts to as many Americans as it can.

Stacey on IoT | Internet of Things news and analysis

Why Ring needed to sell and why Amazon bought it

Home security from Ring competes with new services from Wink, Nest, ADT and more.

Amazon plans to buy Ring, the maker of a connected doorbell and security system, in a deal that Reuters says is valued at $ 1 billion. The move is another expansion into home security hardware by Amazon, and a necessary exit for Ring after almost six years making consumer hardware and raising almost $ 210 million.

It also heralds the end of the IoT consumer hardware startup explosion that occurred between 2012 and culminated after Google purchased Nest for $ 3.2 billion 2014.  From that peak, we entered a gradual winnowing of consumer device startups with the sale of Revolv, Pebble, and August. Those that sold were lucky. Untold crowdfunded startups failed to deliver such as Goji and Sense. And in the last six months we’ve seen the demise and formal shut down of products from Emberlight, Juicero, Staples Connect and Otto.

Last year a source in the industry told me that pretty much every company in the consumer IoT space was for sale. The challenge in figuring out which ones to buy boiled down to their technical specs or their success so far in the consumer market. With the Ring buy coming so soon after Amazon purchased Blink, which also has a connected camera and doorbell, Amazon has doubled down on home security, buying a technical advantage in Blink and a market advantage in Ring.

In December, when Amazon purchased Blink, I pointed out that Blink’s heritage as a low power video processor startup was the real value for Amazon. As I wrote then:

Amazon now has the cameras and future doorbell. It also now has its own image processing chip technology. As companies like Google and Apple build dedicated silicon for their mass-market devices, that could become an advantage. Even if it doesn’t Amazon now has another advantage in the smart home — a security offering.

Security is the gateway drug for the smart home. While many companies started out with fancy automated light bulbs or platforms like SmartThings, the consistent value and real short-term opportunity in the connected home is around security. Roughly a fifth of American homes subscribe to a commercial security product, according to industry figures. But IP cameras and sensors tied to smartphones are changing the economics of monitored security.

In that model, companies such as ADT or Alarm.com charge a monthly fee for keeping an eye on hardware they’ve installed. The hardware costs are paid out over time as part of the contract. But for an amount that can range between $ 100 for Korner to $ 500 from Nest, a consumer can get a basic security setup they can monitor on their own.  ADT, Vivint and Alarm.com see the threat. They’ve invested in bringing hot connected devices into their own platforms and changing up their pricing models. ADT now offers a DIY security product created with SmartThings you can purchase in Best Buy.

The security giants aren’t alone in seeing an opportunity. Comcast now has 1.1 million Xfinity Home customers that get security and home automation features with their broadband. Nest has teamed up with an outside company to provide monitoring for its Nest security system if a users wants it. Increasingly if you want to play in the smart home, you start with or add security.

So it’s no surprise that Amazon, recognizing the potential of the smart home with Alexa, has decided to make sure it has all of its bases covered. Alexa can be the brains on the inside with Ring as the eyes on the outside. Plus, even my friends who know nothing about tech know about Ring. While the tech nerds of the world embrace Alexa, mainstream America has embraced Ring.

Ring will also undoubtedly help Amazon improve its Key program that gives Amazon delivery folks access to the user’s home. Amazon is expected to let Ring operate as its own business much like it does with Audible and Zappos, according to a source briefed on the deal. This makes sense as Amazon could otherwise alienate some of it’s existing Alexa partners who compete with Ring.

That’s why Amazon bought Ring, but why would Ring, a company that was raising money at almost a billion dollar valuation earlier this year sell?

It has to. It faces lawsuits from ADT that have prevented it from selling its newly-created home security system and a patent suit from a rival video doorbell company. But primarily,  the economics of building and supporting connected devices is punishing. Last April, the maker of several connected consumer devices sat down with me to do the math. For every $ 200 device he sold, he faced roughly $ 3 in annual costs associated with that product. If he sells 10 million of them, he’s suddenly looking at $ 30 million annually in cloud, software, and security update costs. Those costs exist as long as the device does, eroding any profits made on the product.

Subscription feeds can offset these costs, but not every buyer will take up a subscription. Without knowing what percent of Ring’s customers are paying subscribers, it’s hard to know how profitable the company was and could remain for the long run. If it planned to go public, investors would certainly ask these questions. These are the same questions people should be asking as Netgear tries to sell of a 20 percent stake in its Arlo camera business through an initial public offering.

So far, Fitbit and GoPro have not provided a stellar example for consumer hardware companies. So between the reckoning happening on the startup side and the potential of an IPO, it’s no wonder Amazon’s offer looked like the best option. Frankly, Ring is getting off easy.

 

Stacey on IoT | Internet of Things news and analysis

IoT news of the week for Feb. 23, 2018


Another piece in place for Google’s IoT toolbox: Just last week, when writing about Google’s purchase of Xively, I noted that Google didn’t have any IoT customer success stories. That changed this week as Google’s IoT Core product became generally available. Schlumberger, Smart Parking, Blaze, and Group ADO all shared their positive experiences using IoT Core to create and manage their IoT efforts. IoT Core is the part of Google Cloud used to connect and manage IoT devices, with the data fed back into Google’s analytics and machine learning tools. The combination of IoT Core and customer case studies provides Google with a more cohesive tool set, so keep an eye out to see what other companies choose Google over its competitors in the IoT space. (Google)

The new data center isn’t at the center; it’s at the edge: With more data processing and collection happening on devices, traditional data centers aren’t the best place to store, sort, and analyze information. Computing at the edge is the next big thing. And it will require a transition in product design, data analytics, and machine learning, to name just a few aspects. If you’re looking to better understand why this is happening and what the future implications of moving compute cycles out to edge devices are for IoTthis article is a great read. (NextPlatform)

Why you need to design scalable IoT pilot programs: Adding connectivity to a device isn’t all that difficult, but that alone doesn’t define a good IoT experience. Such a concept is often overlooked when creating IoT pilot programs. Instead, there has to be return on investment for the data captured in the pilot device, which can be tricky; ROI isn’t a “one and done” effort. Successful pilot efforts will evolve and scale the business value over time as companies figure out the many ways they can use data from devices. If your pilot project can’t do that, it’s likely to become a short-term solution at best and at worst, a one-off effort. (LinkedIn)

Training robots with virtual reality is a thing: I can’t wait until our digital assistants gain mobility and take care of things around the house. Current robots are pretty dumb when it comes to household tasks because they often don’t recognize what the items in our home are, never mind how to interact with them. How do you train their AI without breaking everything? I suppose you could set them loose in an IKEA and over time, they’d eventually figure it out. The Allen Institute for Artificial Intelligence has a better idea, though: Use virtual reality to simulate homes and household items so robots can learn without causing real destruction. Fascinating! (IEEE Spectrum)

The SEC pushes for sorely needed cybersecurity risk disclosures: No system is perfect, so even if the best precautions are taken, cyber hacks can happen to any company. If they’re taking reasonable security precautions, I generally have sympathy for when they get hacked. I draw the line, however, when hacked companies withhold public information about the hack. That’s why I’m happy to see the Securities and Exchange Commission put forth new guidelines on cybersecurity risk disclosures and breaches. (Reuters)

Dish will spend $ 1B on an IoT network: While most telecom companies are focusing on both 5G and NB-IoT networks, Dish is looking solely at the latter. The company plans to spend a billion dollars through 2020 to build out a network for IoT device use. Even though Dish has plenty of spectrum, it can’t yet deliver 5G service because the 3GPP standards group has only defined specifications for adding 5G to existing networks. Since Dish doesn’t have a 4G network of its own, it has to wait for the 3GPP to approve such a standalone effort. That may be good news for the IoT industry, though. By having an option other than the traditional carriers for IoT data services, price plans and service could be better through Dish over the next few years. (Fierce Wireless)

Siri to go hands-free in the next AirPods: Before I bought them last year, I didn’t think I would enjoy Apple’s AirPods as much I do. But one thing that irks me is that you have to tap them for Siri. Maybe she’s sleeping in there and this action wakes her up? That’s set to change, as the next version of AirPods are expected to wake Siri by saying “Hey, Siri” in hands-free mode. I don’t know if it that alone will be worth replacing the $ 169 pair I already invested in, but I use the hands-free Siri on my Apple Watch numerous times a day, which is telling. The main question I have is: Will Apple cut costs in the new AirPods and remove the touch functionality altogether? I hope not, because I don’t want to have to speak to Siri every single time I want to skip a music track or play a different artist. (Bloomberg)

You can finally order a Lighthouse AI webcam: We’ve been hearing about Lighthouse for nearly a year, but in case you missed it, here’s a quick summary. Lighthouse looks like most other connected home security cameras and works like them, too. There’s some secret sauce inside, though: more artificial intelligence than competing products. You can ask the Lighthouse app, for example, “Did anyone walk the dog today?” and computer vision algorithms can determine the answer from captured footage and 3D sensors. Yes, it’s a smart (or smarter) webcam that understands natural language queries. You can now order a Lighthouse for $ 299. Just remember that the AI service will cost you $ 10 a month. (The Verge)

Nest Cam IQ is now a Google Assistant: Speaking of webcams, you can actually speak to one and get information from it. Nest made good on its promise to integrate Google Assistant into its Next Cam IQ devices this week. That’s one less Google Home product you need to buy if you purchased this camera from Nest. This is also a good example of an IoT device maker designing with an end-user business plan in mind, something that many IoT companies don’t consider from the beginning of the product life cycle. (StaceyOnIot)

OrCam raises $ 30.4M to bring smart glasses to the visually impaired: I love what OrCam is trying to produce. The company has built a smart camera that attaches to any glasses frames for use by the visually impaired. The wireless camera can scan objects, bar codes, and faces, and then read aloud what it “sees.” For folks with terribly bad, or even no eyesight, OrCam could be an accessibility superhero in our digitally visual world. I must not be the only who thinks so. The company raised $ 30.4 million at a $ 1 billion valuation this week. (Reuters)

 

Update 2-26-2018: This article was changed to reflect that the Lighthouse camera is now available to ship.

Stacey on IoT | Internet of Things news and analysis