Taking the pulse of the IoT industry isn’t simple.
As a pioneer in the IoT since our founding in 2010, Ayla Networks has witnessed many changes over the years. The current times are no exception.
On the one hand, McKinsey reports an exponential increase over the past five years in the adoption of IoT technologies, and a September 2022 survey reported in NetworkWorld says that “IoT deployments are on the rise, with most companies in the process of deploying the technology.”
On the other hand, recent announcements from major companies have caught people’s attention. Google Cloud plans to discontinue its IoT services in August 2023, and Google is shifting support from Google Assistant to Pixel hardware. IBM announced it will retire its Watson IoT Platform on IBM Cloud. And Amazon, expected to lose $10 billion this year with its Alexa voice assistant, is reportedly preparing for major workforce reductions in that division.
So, what does all this mean for the state of the IoT industry today? I have some thoughts.
IoT is Still Complicated—and Difficult
One of the challenges in the IoT market has always been the diversity of technologies necessary for successful products. Delivering IoT solutions requires mastery of device hardware and firmware, cloud and networking communications, mobile app development and UI best practices, data security and privacy, integration and compatibility, data storage architectures, performance tuning, reliability testing, over-the-air (OTA) updates, and support for things like voice control and video. IoT products need to include comprehensive, end-to-end, integrated technology for all these aspects—and they need to do it at scale.
Google and Amazon, for instance, are fantastic software companies. But because they don’t have the same expertise on the hardware side, it’s no surprise that they stumbled trying to build IoT ecosystems around their voice-based assistants. IBM has the hardware capabilities, but—as we found when Ayla Networks partnered with them a few years ago—they didn’t take an end-to-end approach. As a result, they relied on lots of professional services to make things work for their customers, which isn’t a scalable approach.
Ayla Networks sees and participates in, the IoT industry from a different perspective than these behemoths. The company’s founders made a bunch of really smart decisions early on, building a purpose-built, end-to-end IoT platform from scratch, designed from the ground up to be secure and scalable; to work for any device; and to embrace new waves of technology innovation as they arrive.
The wisdom of those original decisions is reinforced by Ayla’s continued success in the industry. In fact, no one looks like us anymore.
Matter Represents a Seismic Shift
The introduction of the Matter smart home connectivity standard created a real inflection point in the IoT market. One thing that surprises me is how many makers of smart devices are taking a wait-and-see attitude toward Matter, which provides a consistent, reliable way for devices of different types and from different manufacturers to work together easily within a smart home.
The fact is that Matter is happening now, and it’s in IoT device manufacturers’ best interests to get on board sooner rather than later. By removing an interoperability concern for consumers, the Matter standard should drive greater sales of smart home devices.
Of course, the inevitable cycle time to develop and launch products will create some delays. But I believe Matter will be so important to driving the adoption of new smart home products that manufacturers failing to get on board now will miss the next round of smart home growth.
The Rise of the 2 V’s: Voice and Video
Despite some revenue disappointments for makers of voice-enabled home assistants, voice is now standard as an IoT interface to the smart home. The combination of Matter and voice assistants such as Alexa and Google Assistant will be essential for higher-end smart home products, as well as for standard products, such as smart plugs, that don’t seek differentiation.
On the video front, connected home video solutions—such as for doorbells, security, and clip retrieval—are gaining popularity. Providing video solutions in smart homes takes more than just installing a camera and hoping for the best. Making these solutions work means providing end-to-end cloud, device, and mobile integration and support. In other words, the same fundamental principles that Ayla has followed from the start in our IoT platform.
On a related note, I see Matter as having a prominent role in the continued adoption of both voice-enabled and video-based smart home products by making it easier for consumers to mix and match products from different manufacturers.
IoT Trends and Technologies to Watch in 2023
As we head into 2023, here are some of the trends and technology developments we’re watching for the IoT industry as a whole and the smart home market in particular:
Smart Home Innovation: Over the last few years we’ve seen many connected devices with little utility come and go. Having to differentiate above the Matter standard, combined with the realization of the true costs of running and launching a connected product, should drive brands and manufacturers to further innovate—and also to ask whether a particular device type should be connected.
Matter: As already discussed, this new smart home connectivity standard and certification process will simplify how consumers interact with connected devices. It will standardize some of the development of new devices by manufacturers and enable hassle-free product compatibility for consumers. Most importantly, the impact on consumers will drive an acceleration of smart home device adoption.
AI and ML: Artificial intelligence and machine learning will increasingly be called on to analyze the vast amounts of data generated by billions of connected devices. AI and ML can help businesses and organizations gain new insights into the real-world use of their IoT products and solutions, leading to more informed decisions—and increasingly better outcomes.
Sensors: New and more advanced sensors, critical components of many IoT devices, are being developed. These sensors are becoming smaller, more accurate, and more economical.
5G: 5G technology, which offers faster speeds and lower latency than previous generations of communications networks, is reaching more areas. 5G will enable new applications for the IoT, such as real-time remote control of devices and the ability to connect more devices to the internet.
Specifically for Ayla, we’re ramping up our off-the-shelf Ayla FastTrack Smart Home solution, which is designed to simplify IoT projects and speed the release of new connected products. With FastTrack, manufacturers and retailers can launch private-label smart home devices and services faster and more affordably. This innovative offering/business model is already helping leading retailers get to market quickly with pre-integrated white-label smart home products.
Final Thoughts on the State of the IoT
We live in interesting, volatile times, and the IoT industry faces the same challenges as so many others today. We will undoubtedly continue to see many changes in our industry, both good and bad.
Increasingly, Ayla Networks is one of the few threads of consistency and continuity in this nascent industry. We have stuck with the fundamentals upon which the company was founded, and that approach continues to reap dividends.
If your company manufactures IoT products, or if you’re interested in entering the smart home market, find out how the Ayla IoT platform can help speed and simplify your journey, leading to faster returns on investment and a more profitable portfolio.
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