The Internet of Things Is Here…but Do Consumers Care?
Welcome to the Internet of Things – or IoT as it’s known. The potential impact of IoT cannot be underestimated. The amount of data being generated annually by the growing IoT network is predicted to skyrocket to 44 zettabytes by 2020. For reference, one zettabyte is equal to a billion terabytes. Forty-four zettabytes is a huge number when you consider that by 2013 humanity had only created a total of 2.7 zettabytes (from zero). One of the most fundamental steps in the evolution of the Internet is that objects, devices, and sensors are now and will continue to be connected to the Internet in the future. But, what about average consumers – how ready are they to adopt IoT devices or services?
Only 16 Percent of U.S. Adults Know What IoT Is
There’s a lot of talk about IoT in the tech community, but the truth is that the vast majority of consumers don’t understand what IoT is. Case in point? Per the chart below, only 16 percent of U.S. adults know what IoT is about and can provide a reasonable explanation for it. Nearly 50 percent of U.S. adults have never even heard of IoT, and about 30 percent of U.S. adults have heard about IoT, but can’t explain what it is. Does this matter? Not necessarily. Everyday consumers don’t need to understand how the technology works or how things connect together to be interested in IoT-related services for their specific needs.
What IoT Services Are Most Interesting to Consumers?
Smart Home-related services (as a group) have the highest interest among consumers, followed by a variety of services best categorized as Connected Devices (Smart City, Connected Car and Wearables). Connected Health, as a category, is at the bottom in terms of the potential for short-term adoption. The popularity of Smart Home-related services is high, but that’s partially because many of the use cases are incrementally and radically new.
The chart below gives an overview of the top services powered by IoT, and consumers’ interest in them. The x-axis represents the potential number of people interested in using a service in the short-term, and the y-axis represents their level of interest.
Likelihood of Adopting New IoT Devices
Running a company that’s IoT device-related? You’d do well to consider the chart below, which depicts consumers’ short-term interest in purchasing new devices. Interestingly, more than 30 percent of U.S. adults are very interested in purchasing wireless streaming media devices (like Chromecast). As a comparison, that’s about twice the number of people who are very interested in purchasing smart watches. The top device categories after wireless streaming devices are all related to home audio entertainment and home security. All these relate to the Smart Home, which is currently the top application area for consumer-facing IoT services. Also notable is the low interest towards digital goggles or glasses, which won’t reach mass market level adoption anytime soon. The Google Glass project didn’t just stop because of all the “Glasshole” controversy; it stopped because close to 50 percent of consumers are highly unlikely or unlikely to buy them.
Likelihood of Adopting New IoT Devices
Future of IoT
Despite demand and interest, most IoT services are not consumer-ready or even available for use. Roughly 60 percent of current IoT systems are proprietary and are meant for industrial or business use – not for consumers. This doesn’t encourage mass-market adoption of IoT services. Security, privacy and credibility issues all need to be addressed as well, otherwise the development of the IoT consumer market might freeze. We need standards, open platforms, APIs, and better capabilities for small and big companies to create better services more quickly for consumers. If not, the IoT industry will remain too focused on industrial application areas. Companies like Google (which acquired NEST), the major carriers, chipset companies, and network equipment vendors need to work together in ensuring that the innovation around consumer-facing IoT services and applications accelerates. When that happens, we’ll see a vibrant IoT ecosystem similar to today’s smartphone app ecosystem.