IoT in 2017 Arrayent’s Top 10 Predictions

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IoT in 2017

What will be the biggest trends in technology, product categories, solutions, services, business models and other issues impacting consumer IoT in 2017? As the leading global consumer IoT platform provider, we at Arrayent wanted to share the Top 10 trends we are eyeing for IoT in 2017.

1. IoT in 2017 …will continue the trend of voice control ruling the smart home, but it will also start an epic battle between digital assistants.

At CES 2017 it seemed that almost every booth was demonstrating Amazon’s Echo with Alexa digital assistant controlling one gadget or another. However, it’s still the early days of voice control with artificial intelligence assistance. Google Home has only begun to fight. And where is Siri, the voice that started this all off? This story is still developing but we are sure that for IoT in 2017 an epic battle between the major players will ensue.

2. IoT in 2017 …will foment a wake-up call for more privacy and security control as millions of homes now have an Internet connected, always-on ‘open mic’ with Amazon Echo, Google Home, Nest Cam, and other entrants yet to emerge.

We began IoT in 2017 with some unforeseen issues from having always-on microphones in the home: from police seeking to obtain audio records from an Amazon Echo that may have been witness to a murder case, to kids ordering big-ticket gifts without parental consent. As with many new tech solutions, there may be unintended consequences that are not obvious during development or as adoption takes off. In the case of always-on microphones in the home, the issues are around privacy and security are rightly drawing scrutiny and raising the need for consumer awareness and protection.

3. IoT in 2017 …will show that consumers are looking for interoperability with other connected products before they purchase a new ‘smart’ home product—and not under the umbrella of any industry standard.

The desire for interoperability of smart home products with the popular Works with Nest and Amazon Echo ecosystems have been driving this trend within the industry. We are strong supporters of interoperability through connected cloud ecosystems because we believe it make IoT devices truly ‘smart.’ By driving interoperability, connected products can act on their own, and in conjunction with other products and services to contribute to move valuable overall solutions. We are at the forefront of this trend, but it is happening by the millions with Amazon Echo/Alexa and consumer awareness is beginning to take hold. We predict product compatibility will strongly influence purchases as consumers consider which products work with those that are already in their homes. We predict this will materially affect which products are added to their homes this coming year.

4. IoT in 2017 …will demonstrate the IoT industry is upping their collective game with security becoming of paramount importance.

With the prospect of the next big consumer IoT hack looming ever since last October’s DDoS attack on videocams and DVRs, security and privacy has been placed at the top of the requirements lists at all consumer brand manufacturers. This is a best practice we have always instituted with our customers in their IoT programs. At CES we saw new developments and offerings in this area to protect smart home products including new home routers and on-chip protection. We believe that the IoT sector will demonstrate a significant increase in companies working with partners who already implement security and privacy practices on a high level.

5. IoT in 2017 …will show brand manufacturers placing CIOs into prominent product oversight roles because of the focus on IoT data.

Thanks to the IoT and the plethora of data the devices collect, brand manufacturers have the ability, desire and need to collect and manage massive amounts of data. That data is key to deriving business intelligence value that will ultimately enhance product experiences and create new services to benefit consumers and expand business opportunities. But today, less than a third of companies are actually analyzing the IoT data gathered to create actionable insights (according to Forrester Research). This scenario is being actively addressed throughout corporations as more and more Chief Information Officers become more involved in—and even responsible for—their company’s IoT product programs for the first time. We believe this trend will reach a tipping point in 2017 with most brand manufacturers organizing internally to bring IoT data management into the C-suite.

6. IoT in 2017 …will negatively impact brick & mortar retailers through direct OEM-to-consumer marketing and re-ordering. This will pressure stores to effectively demonstrate new connected product shopping experiences…or die.

The opportunity is ripe for brand manufacturers to play a major role in shaping the ‘customer journey’ when it comes to connected products and services. This will impact retailers in many ways. It could positively impact the consumer’s discovery and purchase experience through personalized in-store marketing and support at one end of the spectrum. It could also cut the retailer out of the loop—especially brick and mortar stores—because of in-app capabilities for automatic re-ordering and replenishment of consumables. Along this continuum, as the recent National Retail Federation’s Big Show just demonstrated in January, there is a lot of room for brands and retailers to work together to contribute to a better consumer experience. We expect to see significant movement in this area: in brands reaching out directly to consumers, in stores creating new compelling shopping experiences, and in both working together to move IoT forward.

7. IoT in 2017 …will show a huge increase in connected products being purchased through trusted subscription providers, as these vertical players vie to take the lead in smart home ecosystems.

As the CED Magazine reported recently, trusted vertical market operators are focusing on offering advanced options that further extend their brands into the smart home. In the case of Comcast, it is building security camera access and smart lighting via its Xfinity Home ecosystem. We predict this ecosystem trend developing traction in 2017 with other verticals like energy, retail and insurance entering the fray with brands that have already earned trust in the home and can add to the peace of mind consumers are seeking.

8. IoT in 2017 …will force connected products manufacturers to justify the cost of connectivity to their purchasers and themselves through new business models.

The cost of connecting and operating products that are “always on” via an Internet connection may be invisible but it is not free. Yet many connected products are sold without a method for their manufacturers to pay for keeping those products ‘live’ year after year. 2017 will be the year we see new business models—and price tags—emerge that seek to rectify this. Bundling IoT devices with services (i.e. the trend in no. 7 above) is one way to illustrate a greater value proposition as well as provide cost savings.

9. IoT in 2017 …will spur consumer brand manufacturers to take great strides towards digital transformation in their business operations.

As companies finally move beyond the mindset of connecting products just because they can, the focus will move to sustainable connected product businesses and all that entails. The customer journey and brand relationship will begin once a product is purchased and will remain through a prolonged lifecycle. This new operating model will present great opportunities along with new challenges for brands. For 2017 we expect that new technologies like voice control with emerging AI technology will aid the consumer user experience and will yield new consumer expectations in terms of product support.

10. IoT in 2017 …will see the battle over tech talent intensify as consumer product companies embrace IoT, and connected-product software expertise becomes a core requirement for every business.

According to the recent CTA economic study, the consumer tech sector supports more than 15 million jobs across the U.S. We predict the fight for that talent will intensify in 2017 as big consumer products companies vie with tech companies for IoT talent. To date the recruitment battle has been for software engineers and product managers. This will continue, but as connected products reshape the relationship between brand and consumer, we predict the need for consumer research and marketing talent will expand greatly. An additional impact we predict is how the new administration’s policies on immigration and off-shoring of jobs may shift the focus to graduates of U.S. design schools and product marketing programs.

In future blogs, we’ll take a closer look at each of these specific trends along with our viewpoint and available solutions. If you want to be kept apprised of our posts, please sign up for our newsletter on the bottom of our website.