Great post RM! I fully agree that consumer adoption is a critical issue for home IoT solutions. Indeed, unlike industrial IoT where upgrading directly translates into efficiency gains and decreased costs, home automation doesn’t solve any existing problems, it just enhances the user experience in ways that aren’t clear to consumers today.
Consumer need to be sold on the value of a smart home before companies like Google can monetize their investments. Companies like Nest should do more communicate their vision for these technologies and how they will transform the user’s lifestyle. As you mention in your post, a smooth consumer experience will also be critical. The first step is streamlined installation – no one wants to spend hours figuring out how to make the new smart lock work with Nest. Nest should figure that out for you. The second thing is device integration – devices should be easy to control from a centralized hub/app and later, ‘talk to each other’ to anticipate user needs. The final thing is security: device interconnection will open many possibilities for all internet stakeholders, including hackers. Google must make sure it has a robust security framework preventing malicious attacks on user devices. Everyone agrees that getting your Facebook account stolen sucks, but getting robbed because someone hacked your smart lock will feel much worse, especially if the attacker used your smart toaster to access the lock.
You seem very optimistic about the Phillips Hue, but smart devices haven’t been living up to the hype so far. According to The Economist, only 6% of US households have smart devices today. Price is a big concern – who wants to pay 200 bucks for three lightbulbs when I can buy 12 LEDs at target for less than that? Are people willing to pay such a big premium on light bulbs just so they can control them with an app? The Phillips Hue is a good start, but it only provides an incremental improvement over the current user experience at a much higher price. To drive adoption, you need step-change improvements over the status-quo. For me, the bigger value to consumers is interconnected smart devices working together to enhance the user experience. For that Phillips, will need to 1) bring its price down and 2) innovate beyond Hue into other smart devices and work with Nest or Apple to create a truly remarkable smart home experience.
Smart cities are something to be excited about, but I wonder: to what extent can they be implemented? It’s difficult enough to invest in greenfield smart city projects, but retrofitting existing cities to equip them with IoT capabilities sounds painful and costly.
You can always argue that smart cities pay for themselves over the long run through efficiency gains but government entities are risk-averse and, for the most part, short-term focused. They may not have the appetite for such a risky play.
For now, governments will likely limit their investments to ‘quick wins’ like smart lights which offer direct savings on energy consumption. Benefits from digitizing waste management and water systems are less obvious and harder to quantify so those enhancements will probably come later. We’re probably a long way from highly interconnected digital cities anticipating and optimizing for people’s mobility needs.
Interesting read. Smart censors and big-data analytics capabilities provide a compelling new way for companies to boost equipment efficiency. This is especially true for alternative energy sources – which run way below capacity. Zooming-in on wind turbines, they only generate around 24% of their total capacity. Of course, the main reason for this is variability in wind patterns, but any efficiency improvement translates into major gains in terms of relative output (a 1 percentage point increase is a 4.2% gain if your base is 24%)
However, IIoT efficiency improvements are still capped at the capacity of the underlying equipment. For manufacturers already running at almost full capacity, it seems like IIoT’s main value-add will be in optimizing maintenance in order to eliminate costly equipment failures.
Great topic! The blockchain enables self-enforcing disintermediated contracts and a public general ledger with records of every transaction. This increases reliability and transparency. But what problem does it solve? Taking the example of financial contracts – is trust an issue? As a trader, it’s in my best interest to be honest when executing my contracts if I want to keep trading. Indeed, the penalty for dishonesty is to be cut off from the system.
I’m also concerned about contract flexibility in such a system. I have many friends who work in trading and they tell me that last-minute changes to derivative contracts are a recurring event on the trading floor. How can I implement such changes in a world where contracts are set in stone through the blockchain?
More broadly – what are we achieving? Replacing lawyers with coders? It feels like we’re just shuffling the cards around. You did a great job of outlining the risks: The blockchain may be a solid and elegant technology, however, crap in crap out still applies – coders can make mistakes. Finally, cybersecurity threats are an entire new risk we must deal with (just ask the guys at Ethereum: http://www.cbc.ca/news/technology/ethereum-hack-blockchain-fork-bitcoin-1.3719009 )
Cool post Tiana! Climate change may very well be the end of the skiing industry as we know it. As snow levels decrease and expensive snow-making equipment becomes an industry standard, a lot of small players will be forced out of the market. Already, the number of ski areas in America has decreased from 546 to 470 since 1992 (https://insideclimatenews.org/news/23122015/climate-change-global-warming-imperils-winter-ski-industry-frets-el-nino).
As a skier, I’ve noticed a great deal of variability in snow levels from season to season during the past decade. I can’t imagine that managing that variability comes cheap to resort operators.
Sadly, WB’s efforts to adopt environmentally friendly practices and reduce emissions is just a drop in the bucket. Climate change can only be addressed through a concerted effort.
WB’s diversification into non-winter related entertainment activities says a great deal about the company’s view on the future. They’re right to hedge: ski cannot survive in a world without natural snow – snowmakers are expensive and turn customers off. It’s paradoxical, but the prospect of a world without natural snow gives me the chills.
Sweet post Tuyee! Looking at Nestlé’s Cocoa Plan I can’t help but wonder: are they doing enough? A temperature increase of 2.1 °C and reduced rainfall seem like serious threats to crop yields. Will the implementation of higher yielding crops and special trainings offset the damage inflicted by warmer and drier weather? Is there a risk that weary farmers depending on cocoa yields to survive will hedge their environmental risk by switching to more heat-resistant crops – like oil palm? If so, prices will surely shoot up. Should we all start building strategic cocoa reserves?
One thing to keep in mind is that the economic benefits of Arctic sea routes are, to a large extent, driven by cost savings on fuel. The Northwest passage could shave off USD 80,000 per journey in fuel in a world where oil is at USD 90 – 100 per barrel (as it was in 2013, the year in which that figure was calculated), but in today’s USD 40 – 50 per barrel world this number is probably closer to USD 40,000. Moreover, transporting cargo through the arctic will require investments in specialized equipment and contracting ice-breaker vessels, further driving up costs. Perhaps NBC would be wise to wait until the Arctic waterways along the Northwest passage clear a little further before making this risky bet.
Interesting post! A few thoughts: it seems like attempting to influence regulation will be expensive and challenging for Solar City given its size relative to major utility players. For reference, Solar City’s 2014 revenues were USD 255 Mn vs. Salt River Project’s USD 3 Bn (Source: company annual reports).
I would love to hear more about how Solar City could partner with incumbents to avoid competition. I would assume that any such effort would be flagged as oligopolistic and neutralized by anti-trust regulators.
As renewable energy technologies mature, government subsidies for Solar City will likely be rolled back. Solar City will need to compete in a world with less and less renewable subsidies. All things considered, it seems that the company can only survive by innovating to keep its prices low and minimize its reliance on the grid during peak hours. This means cheaper PV cells as well as bigger batteries.
Interesting post! I would note that among Saudi Arabia’s major roadblocks to limiting emissions is the lack of capabilities. Developing and operating energy-efficient and renewable technologies requires specialized skills and know-how that are scarce in the hydrocarbon-focused Saudi economy. One way of acquiring these capabilities is through partnerships with leading international players in the sustainability space. An example is Mubadala (Abu Dhabi Sovereign Wealth Fund) and its Shams 1 project, a 100MW Concentrated Solar Power plant in Abu Dhabi built and operated as a partnership between Mubadala (60%), Total (20%), and Abengoa (20%). Through this partnership, Mubadala can leverage Total and Abengoa’s capabilities to diversify Abu Dhabi’s energy matrix.