In a gripping short story, Ray Bradbury had, in 1950, written about a smart home that continued to function even after the human race had been wiped out. Waking the family, preparing their meals, doing the dishes the house continued to perform all the domestic chores perfectly.
That was fiction. Today, it’s reality. In 2018, devices that communicate with each other and enable a home to function smartly are becoming a reality through the internet of things (IoT), which is being hailed as the next big technological leap. The adoption of IoT devices is gaining momentum worldwide. According to Deloitte, connected devices are expected to cross 20.8 billion in 2020, a fivefold growth from 3.7 billion in 2014.
While IoT is being increasingly adopted across industries, including in manufacturing, automobile, health care and agriculture, its most visible and talked-about application is in consumer products. These range from simple personal fitness devices to high-end smart home automation technologies. The demand for IoT-enabled consumer devices is growing owing to the increase in smartphone uptake, mobile internet penetration and tech-savvy consumers, particularly Generation Z that does not know a world without the internet. The supply of these devices has increased as companies see IoT as a way of differentiating their products. Through IoT, they aim to tap into consumer needs, move up the value chain and provide services and experiences at a premium.
The strategic partnership between Korean home appliances giant Samsung and telecom operator Vodafone to develop and launch a range of consumer IoT products and services in select European markets is a case in point. These devices perform a variety of functions. For example, a baby’s room could be fitted with a camera, a room temperature sensor, movement detectors and heat detectors. All these devices can be controlled through the V-Home app, which provides immediate alerts in the event of an intrusion and enables simple remote automation of home appliances and utilities, including voice activation through home voice assistants.
IoT devices are making distance irrelevant. Users can now remotely operate any device and application at home, irrespective of the miles or the time zone that separates them physically.
Consumer IoT applications
Consumer IoT is at the early stages of development. The need for such devices and their use cases are often debated, especially in a labour-surplus economy like India. The key drivers for a consumer to buy connected devices are convenience, relevance and necessity. “When a family is worried about security, it will incur the expenditure for the IoT-enabled device. But when it comes to convenience, the call to spend will be taken based on different criteria. A family where all members come back home tired is more likely to spend on a smart cleaning solution or a smart kitchen. It may not be necessary for others,” says Anil Talreja, partner, Deloitte, Haskin & Sells LLP. Aside from comprehensive home security systems, consumer devices that are gaining traction include smart TVs, streaming devices, car applications, wearables, home control devices, voice command systems, virtual reality headsets and gaming systems.
Deloitte has divided consumer IoT into three broad digital services and experiences:
- Notifications and alerts: Connected machines can simplify routine tasks by giving regular updates to consumers. Sensors and intelligent software allow products to know consumer preferences, anticipate needs and respond dynamically to behaviour. For example, an IoT-enabled refrigerator can read the expiry date of a product and send a notification on the phone when it needs to be replenished. A more sophisticated application will suggest a product based on historical usage when the consumer is in the supermarket.
- Brand and product information: Additional information about a product or brand like its carbon footprint, ethical standards, etc. can be provided through IoT, and help build transparency and gain consumer trust.
- Real-time insights: These help consumers purchase personalised services and experiences rather than products. One of the most impactful ways for a manufacturer to shape the consumer experience is by providing relevant advice that enlightens and educates them and enables them to interact with the brand and provide feedback.
IoT technology enables the collection of data from things to provide information in real time. “Connected devices generate new sets of data and make it available to companies, helping them to solve previously unsolvable problems,” says Anirban Chaudhary, senior director, consulting, BRIDGEi2i Analytics Solutions. “Earlier, retail stores acquired consumer data after the consumers had bought something. But with sensor and video data, the retail company already knows the consumer walking into a store and can personalise the experience,” he elaborates.
Recently, MapmyIndia launched a solution for grocery and retail stores, which enables consumers to get to their preferred products. For example, a consumer who bought, say, a particular brand of cheese on a previous visit to the store would be shown the way to it on a 3D map on the phone or any other device, along with alternative cheese brands. “All the shelves and walkways could be presented by dots, and through location analytics, the consumer could be guided to the preferred product,” says Tarini Sundar, head of marketing, MapmyIndia.
There were 1.5 billion consumer IoT devices in the world in 2014, which are expected to grow to 7.2 billion by 2020, a compound annual growth rate of 30 per cent as against 35 per cent for industrial IoT devices. The slower growth of consumer IoT can be largely attributed to security and privacy concerns and the high cost of connected devices. About a decade ago, when companies started making consumer IoT devices, they targeted households that could afford expensive solutions. “Today, we are looking at ways to make the price points of consumer IoT affordable for anyone and everyone,” says Ali Hosseini, chief executive officer, SenRa, a company that provides IoT and machine-to-machine (M2M) solutions in India.
IoT in India
Although India is a late adopter compared to developed countries, IoT revenues are estimated to reach $9 billion by 2020, up from $1.3 billion in 2016. Connected devices in India are expected to grow 32 times to 1.9 billion in 2020 from 60 million in 2016, much higher than the global growth rate of 5-6x. The government aims to leverage this explosion in IoT devices and position India as a leader in IoT and 5G.
“India’s aspiration to take a leading role in IoT and 5G will ride on its ability to build core networks for new-age technologies and an enabling industry ecosystem. We have more at stake in these technologies than any other country because we need to leapfrog to meet the aspirations of the young demography and democracy,” says Aruna Sundarajan, secretary, Department of Telecommunications (DoT). To this end, DoT has made announcements pertaining to M2M communication including issuing draft M2M service provider registration guidelines in 2016, and finalising a roadmap for a 13-digit M2M numbering scheme.
A few Indian companies including hardware vendors, network operators and system integrators have already begun work on consumer and industrial IoT applications in areas such as agriculture, healthcare, industrial automation and retail. Of these, 60-65 per cent are start-ups.
According to Deloitte, the innovations that will drive IoT technology forward will be those that deliver real value to the consumer. Companies, therefore, need to capitalise on IoT opportunities in a way that matters to consumers. s
Nina Mehta
