Wozniak to Investors: IoT bubble could burst

General Discussion
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There are multiple issues under discussion.

Argus is saying that interest in Home Automation has dramatically declined since 2013. I think that’s pretty clearly not true–as long as you count Hues as “home automation.”

The other sources are saying the interest in Home Automation isn’t very high, probably less than 15% of US consumers have any interest right now. I think that’s also likely true, as long as you don’t count nonnetworked garage door openers as “home automation.”

The real question is whether Amazon and Apple and Google can move home automation of lights, door locks, and thermostats closer to that garage door category or not. And how long it will take.

I think if adoption of that simple level of HA reached the same adoption level as, say, single pod coffee makers or big flat screen televisions, all three companies would be quite happy. An upper middle class luxury item, but one that’s sold at mass market and widely understood and recognised. And quite profitable.

We’ll see.

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Rather apropos examples!

  • single pod coffee makers are low margin hardware, but expensive software (Keurig "Green Mountain Coffee Co. makes a killing on the patented pods. Huge markup from regular filter coffee).

  • Big TVs are sold at high margin.

So which of these is SmartThings’s business model? What about other IoT and Smart Home companies?

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Fortune magazine joins the chorus predicting Smart Home shakeout.

“What we’re finding with retailers is they are learning that these products are complicated … now they are focused more on the high quality players and brands that are trustable,” Harris said. “Since so many people have over promised and under delivered, they are being careful with who they are signing partnerships with.”

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Okay, awfully late coming here and updating, but here’s my feeling: HA, like so many other whiz-bang new fangled techie things was cool and neato and wow for a while… everyone and their brother was jumping on it. It was going like crazy…

…until people actually tried to use it and found out it wasn’t a very mature product quite yet. Too many things just didn’t work like everyone thought. It wasn’t plug-n-play. So everyone starts jumping ship and the media reports that HA and IoT is dead and crashed and burned and worthless…

…except it’s not. There are still a core of people and companies actively working with IoT and enjoying the benefits of HA. And the product is improving and maturing and eventually others will see this and get back on the bandwagon.

It kinda reminds me of bluetooth. I remember when it first came out and there was so much promise and interest… and then it sorta died… but not really. And now it’s extremely common and being used more and more and more.

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I think it all comes down to various details… like very specific use cases vs. others.

Bluetooth earpieces, for example, are considered very gauche and passe. But mini-speakers are very popular instead. And BLE for watches and all sorts of stuff that wasn’t even in the picture a few years ago.

Same thing with Smart Home (which I think is a very specific case of IoT … IoT covers so many different areas, even if you don’t count commercial / industrial. Wearables vs appliances vs traditional home controls, security, etc., etc.).

Google/Nest, Apple, and SmartThings are taking different approaches to Smart Home (I consider them to be the three forks on this road … with a few parallel roads going around … Alarm.com is dealer based, and the point devices like Piper, and other players like iControl and Microsoft).

We get a rather myopic view just looking out from SmartThings.

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Hey… I still wear a BT earpiece every day at work! :smile:

But this is exactly my point. Some people looked at BT for very specific things and when it didn’t work and/or take off like some wanted (or expected), it was declared dead.

I guess part if it is the “instant gratification” world we live in now. People (from users to media to whatever) expect something new to:

a.) Be perfect right away
b.) Be exceedingly popular right away

If either or both of those things don’t happen, well, the end result is that the given new thing is dead.

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Though this does happen in the opposite way too, of course.

For example, Snapchat is very popular and somehow valued at over $3 billion… But I’m sure many of us believe it will never live up to that expectation. Wozniak is calling the wrong industry a “bubble”.

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IoT is much bigger than Home Automation.

There will be fragmentation, consolidating and then expansion and the cycle will repeat.

HA has been around for 30+ years. IoT is emerging and intersecting with HA.

Congress just had an IoT panel last week where the head of CEA (host of CES) talked about security. Probably some of the best comedy on CSPAN I’ve seen in a long time.

IoT has a long way to go, but just look at the $$$ being invested in it across almost all vertical markets and it isn’t going away anytime soon.

But everything has a cycle.

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More than that, everything has multiple cycles. There’s the cycle of invention, the cycle of investment, the cycle of adoption, the cycle of innovation, the cycle of regulation.

Wozniak was talking to a group of investors about hot trends in venture capital. Getting ahead of the cycle of investment. He actually wasn’t saying anything at all about the cycle of adoption, or even innovation. Just where the money was likely to run to next. :wink:

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Like JD said, it is cycles of boom-bust. It now looks like the wild west right… with everyone that comes up with an IoT device trying to make their device into the IoT standard… For example, Iris uses z-wave, and they try to hide it behind their brand… Levitron with z-wave, Wemo and Wink with Zigbee… Nest trying to grab the whole spectrum at home… Honeywell with Evohome… GE supplying for the home market and making huge moves in the IoT industrial market… And Samsung grabbing Smartthings with world domination plans… Amazon with their Echo, trying to listen into your living-room so they can figure out when you run out of diapers or milk… “Some guy from MIT” that got robbed putting a few devices together and trying to charge you monthly as much as the security companies already do… All chipping away from the security companies that try to scare you into handing the $50 monthly for life… I think IoT has gone a long way, with you being able to replace $20,000 x10 systems with a few devices that only add up to a few $100’s and don’t require you to tear down any walls…

Hopefully, when the dust settles, these companies won’t destroy the communication standards, or at least agree to a couple of standards that can grow with the market… But, right now, they are fighting to be the number one so they can grab the $50/month/household for themselves. There are 117 million households with 60% owning their own home right now… That’s $42 Billion/ year without counting fringe benefits like the ones Amazon is salivating about… That’s a good chunk of money likely to fuel a good battle for a few years.

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