How to Internet-Connect your low cost consumer retail embedded design

Harshy Wanigasekara

September 13, 2010

Harshy WanigasekaraSeptember 13, 2010

Technology forecasters have been predicting that the Internet of Things—the technologies around connecting everyday things to the Internet—will be the foundation of the next major networking wave. The volumes being discussed are huge -- 10x to 100X that of mobile phone shipments per year.

The important question to consider is what application will drive that huge adoption?  Desktop (laser printer) publishing drove the early Ethernet market.  Wi-Fi volume took off when Intel put an 802.11 chip into its laptop reference design.  Mobile phone volumes increased exponentially when the handsets became affordable. 

Clever smartphones and tablet applications, which connect to low cost products, will likely drive the Internet of Things from the hobbyist market to the mainstream market.  Smartphones already enable consumers to connect to anyone and search for anything--anywhere, anytime. 

It is only a matter of time before smartphone and tablet owners realize they have a true universal remote control in their pocket.  Then, they will want to monitor and control their “things” from anywhere, at anytime. Life style change is in the wind: Informa Telecoms & Media reported that in 2008, vendors shipped more smartphones than netbooks. These trends are setting the stage for the Internet of Things to take off.

Application Drivers

So far, Internet-connect products have only held hobbyist’s interest because product prices have been high and installations have been complex.  When the Internet cost-adder breaks below $30 and installation can be simplified to a plug and play experience, the market will have greater opportunity to expand rapidly. 

Today, there are three target applications that show promise: reducing a custom installer’s customer support cost; saving the consumer money; and giving the consumer more comfort and peace of mind. 

For example, companies that sell expensive products for home theaters or landscape irrigation usually sell their products through a network of custom installers. A truck roll for home theater installer can cost over $100, while landscaping services typically spends $10,000 a month in fuel charges. 

With Internet connectivity, a product brand owner could add remote monitoring and control features to a product, giving their channel another product to sell.  The channel is happy to increase revenue, and their customers get better faster service. 

The result is happier customers and a loyal sales channel.  One example is Monster Cable’s HTUPS 3700 home theater power supply, which has Internet connectivity features that enable their custom installers to provide remote diagnostic and problem remediation services to their end consumers.  Monster won a CES Innovations 2010 Design and Engineering Award for the HTUPS 3700.

Products that save the consumer money show promise.  Some examples are occupancy-smart thermostats and weather-smart irrigation controllers that can save 10% to 30% on consumer energy and water bills. There is an opportunity to sell home smoke, CO, flood, and freeze detectors that could send a text message or email to rental property or vacation property owners.  These services could collect incremental revenue in the form of pay-per-alarm instance or smartphone applications for the alerting sensors.

Product Requirements

Consumer products will ultimately drive Internet of Things market volume.  It follows then that a successful Internet connected consumer product will have to satisfy three product requirements: low cost, easy installation, and reliability.  Low product cost enables high volume.  A hobbyist or rental property manager might spend $200 or more for an Internet connected thermostat, but the mainstream consumer will be stretched to pay an additional $30 over the typical $60 for a home thermostat. 

Second, for the product to stay in the home, it has to be simple to use and install, because if it is not, it will be returned to the retailer.  Elke den Ouden, of Philips Electronics , has found that 50% of all returned electronic products worked fine, but the consumer did not know how to use them. ABI research reported in 2009 that 30% of consumers struggled to install Wi-Fi products, and these products suffered from an 11% return rate.  Mainstream retailers will tolerate 5% return rates, but not 11%.  Installation complexity explains why Zigbee and Z-wave products usually installed by custom installers. 

A major reason for the Amazon’s Kindle commercial success over the Sony’s e-book reader was its seamless integration with the Amazon book store using 3G.  There was no USB cable and PC in the middle to complicate things, although 3G is expensive, a downside for a achieving low cost adder.  Lastly, the Internet connected features have to be reliable. If the product continually fails to work, consumer word of mouth will kill the product’s adoption. 

Product interoperability is not a factor slowing adoption.  The abundance of remote controllers and battery re-chargers in homes proves the point.  Retailers know that consumers come into their stores “on a mission” to solve a single point problem: to replace a broken thermostat or a garage door opener. 

They don’t come into the store with a home automation problem, ready to make a big investment, so  it is the Internet-connect cost adder and ease of installation that plays the biggest role in customer adoption. 

The good news is that product interoperability can happen incrementally, over time, even after product has been in the field.  That is because application interoperability can easily be achieved by connecting web services through published APIs that are “mashed up” in the Internet cloud. 

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