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The Internet of Things

When Toasters Go Online

By | Published Sept. 2, 2014

Are you looking forward to the day when your sleeping baby’s diaper tells you it’s wet before the wetness wakes your baby? Or are you dreading the day when a hacker or the government can learn everything about you that your car, appliances and even your internal organs can divulge? Either way, that day is coming, as a wave of cheap sensors connected to the Internet begin to invade almost everything around us. Linked by wireless technology, they will make up what’s been dubbed the Internet of Things. Altogether, the network of connected objects is expected to eventually dwarf the Internet of people: Some researchers predict that by 2020 as many as 50 billion devices will be connected. For consumers, that could mean coffeemakers that delay grinding when you hit your alarm’s snooze button. For businesses, it could mean gigantic savings when pipes report their own leaks, warehouses place their own orders and cows that need milking communicate through something more direct than mooing.

The Situation

By one estimate, fewer than half of wireless devices connected to the Internet are so-called hubs like PCs or smartphones or tablets. Most of the rest are ordinary items embedded with sensors that can track heat, speed, wetness or a wide range of other characteristics. By the same estimate, 75 percent of the growth in connected devices between now and 2020 will involve sensors in devices or personal accessories containing sensors, such as the Fitbit fitness tracker. Some of tech’s biggest names are investing heavily in startups they think will give them a foothold in the connected home: Google in January paid $3.2 billion for Nest Labs, which makes so-called smart thermostats and smoke detectors. Samsung in August bought SmartThings, which makes a mobile application to remotely control devices in houses. Apple in June announced the development of its HomeKit system to provide a platform for connected devices. One of the biggest challenges all Internet of Things ventures face is getting things to talk to each other – a consumer may need to fire up one mobile app to turn up the temperature in the home, and another to turn on home security system. An even bigger question is security — an issue vividly described in a video that a hacker titled “Weaponizing Your Coffee Pot.”

The Background

In 1982, computer science students at Carnegie-Mellon University put sensors in a Coca-Cola vending machine and connected it to an early version of the Internet so they could tell if it was empty without having to walk all the way there. The term “Internet of Things” was coined in 1999 by Kevin Ashton, the co-founder of an MIT center that helped develop the radio chips that businesses now use to track goods and materials. But for the most part, web-connected gadgets remained out of consumers’ reach until the rise of smartphones, which use a score of sensors to track everything from motion to eye movement, led to a steep drop in prices. Sensors typically connect to an at-home hub via a Wi-Fi network or connect to other devices via Bluetooth technologies.

The Argument

More data, more problems. The data collected, monitored and transferred by wireless devices can include names, addresses, credit card numbers or even health information. Doors and electrical systems can provide clues into whether a house is empty. And while technology companies confidently power ahead, U.S. officials are moving more slowly, trying to fashion rules that could keep the Internet of Things from becoming a vast feeding ground for hackers who could turn devices against their owners as well as steal information. Former U.S. Vice President Dick Cheney said last year that he disabled the wireless feature on his defibrillator in 2007 because he feared terrorists could use it to kill him. The U.S. Federal Trade Commission last year brought charges against the maker of web-enabled security cameras for leaving the devices vulnerable to hackers. Hardware companies are also struggling to figure out which devices mainstream consumers will be willing to pay to connect to the web.  Nest says its $249 thermostat will pay for itself by lowering heating and cooling bills. But wireless diapers may have to be a lot cheaper before consumers regard them as anything more than a novelty.

The Reference Shelf

  • Bloomberg TV discusses how the Internet of Things may shape the future in an interview with Thomas Lounibos, chief executive officer of technology company Soasta Inc.
  • Experts weigh in on the pros and cons of smart devices in a Pew Research Report.
  • A Bloomberg News story explains how smart technology is facing roadblocks as the U.S. government remains cautious about security.
  • Cisco, the networking solutions giant, touts the technology in a report that projects there will be 25 billion connected devices globally within a year.
  • A TEDx Talk argues the technology has benefits beyond a boost to the economy, affecting everything from health care to food to transportation.
  • How does a smart device work? Google Nest can show you.

(First published Sept. 2, 2014)

To contact the writer of this QuickTake:
Olga Kharif in Portland, Ore. at okharif@bloomberg.net

 

To contact the editor responsible for this QuickTake:
John O'Neil at joneil18@bloomberg.net