Connected Home Needs to Police Itself on Security Concerns, CES Told

"We all know the enormous risk on our brands if we mess up on this,” said Kevin Meagher, general manager, Smart Home at Lowe’s, on the question of security and consumer privacy. Meagher cited Wi-Fi cameras in the home, which Lowe’s controls through managed services. “We don’t allow consumers to set passwords for cameras,” he said. “We set them so that even they don’t know what their password is,” he said. He compared the security level to that of a bank. “The only way into their home and their Iris devices is through our platform inside our tier-one data center,” Meagher said. “Good luck hacking us.”

The vulnerabilities are largely because connected devices are in an “open state out of the box,” said Jay Yanko, managing principal at Verizon Enterprise Solutions. If consumers don’t change passwords to something secure, “you're going to be vulnerable,” he said. Consumers don’t understand that the devices out of the box are open to intrusion, he said. He encouraged an industry solution to lock devices prior to shipping so they have to be opened for consumers to get the service. That “makes things a little more complicated for the consumer,” Yanko said, but called it the “No. 1 thing you can do” to protect data.

Meagher said the industry has to work toward security standards “and constantly make sure we're on top of it.” Industry partners have “to solve that problem for consumers,” he said. He expressed the hope that government doesn’t become involved in a solution.

John Taylor, LG vice president-public affairs, cited the FTC’s “intense focus on privacy issues” and said, “It’s only going to increase.” As “collective parts of the ecosystem,” companies in the connected home chain need to “get ahead” of government involvement, he said, which the other two panelists endorsed.

Part of getting ahead will be to require more effort on the part of consumers, Meagher said. “We have to say to them when they put in a password 1-2-3, ‘no you don’t,'” or it won’t work, he said. That is starting to happen now, he said. Ten years ago, consumers were reticent about doing their banking online, he said, and now, “who in this room doesn’t use Internet banking?” Taylor said at the session he doesn’t personally use Internet banking because of a family member’s nightmare with identity theft, which underscored the potential risks involved with the connected world.

Other challenges affecting the fledgling connected home market include making the concept compelling, simple and affordable for consumers, panelists said. “Everything that’s out there around smart home technology right now is just too damn expensive,” said Meagher. His company’s strategy is to get consumers “on board at a price point.” Its marketing approach is to avoid a discussion of technology -- whether a product is ZigBee or Z-Wave -- and to discuss instead whether a consumer’s door lock will work with an iPhone, he said. That will create a framework for a “flood of appliances,” he said. It will be a “natural upgrade” to get a smart appliance such as an electronic door lock or a smart thermostat, as long as it’s “below $100,” he said.

The tipping point for the smart home as a retrofit choice for consumers will be an established ecosystem, Yanko said. “I can’t just plug everything in because the work still needs to be done to get the controller to talk to the device,” he said.

Even with the ecosystem in place, “you still have to convince consumers that this is something they really want to buy,” said Taylor of LG, which learned early on with the Internet refrigerator that if you build it, consumers won’t necessarily come. He cited a demo LG was showing in its booth for its Home Chat technology that would allow consumers to chat with a smart refrigerator from the grocery store to see if they should buy milk, for instance. “These are cute use cases,” Taylor said, saying there needs to be a marketing plan and business model to convince consumers that now is the time to step up to a connected device.

Lowe’s believes there’s “no one killer app” to lead consumers to the connected home. Meagher cited one customer who put a passive IR sensor in his mailbox to be alerted when the mail was delivered, and another who wanted to know when the dog walker arrived and left using the door opening and closing as the means. For every customer “there’s one thing that’s absolute, and everything else falls into place after that,” he said. “Once you get them in with one thing, they'll go sideways and add more and more and more,” he said.