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3 reasons why the Internet of Things (still) doesn’t make sense

Yoon Boo-Keun, president and co-chief executive officer of Samsung, speaks at a news conference during CES in Las Vegas. Samsung has emerged as one of the biggest backers for the “Internet of Things.” (Patrick T. Fallon/Bloomberg)

If there was one big buzzword out of this year’s CES, it was the “Internet of Things.” Just about every major tech company seemingly wants to sell products or services as part of the Internet of Things. According to Cisco chief executive John Chambers, the Internet of Things could be a $19 trillion opportunity, with more than 50 billion objects hooked up to the Internet by 2020. The momentum behind the Internet of Things seems to be pretty much unstoppable, right?

Not so fast. The Internet of Things still has a long way to go before it becomes a reality. Here’s why:

1. Price

This is a real deal-killer – the current generation of consumer products for the Internet of Things is still way too expensive. Who needs a $99 “smart” light bulb or a $99 “smart” toothbrush? Yes, Moore’s Law will eventually bring down the cost of these Internet-connected things over time. Sensors and chips will come down in price and devices will become ever more powerful and functional. But how much processing power does an Internet-connected coffeemaker really need?

There are a limited number of items that people are going to pay a premium price for — things like the Nest Learning Thermostat, where the ability to control your home actually might bring cost savings later down the road. Other items — like an Internet-connected belt — seem to promise much less in the way of cost savings or even quality of life improvements. As a result, many consumers see the Internet of Things as a marketing gimmick meant to sell them more things that they don’t need.

2. The “basket of remotes” issue

And even if the costs of these Internet-connected things come down, it will be a nightmare interoperability issue to get all the different things talking to each other. Fifty billion devices connected to the Internet by 2020 could lead to a “basket of remotes” problem on steroids — yes, your Internet-connected devices work, but you have a whole bunch of remotes that you don’t use and that you can’t program to take advantage of their full functionality.

And that’s assuming the best-case scenario — the big tech companies play nice and agree on universal standards for discovery and communication between devices. But just think how much effort it sometimes takes to make iOS and Android play nice with each other. People are going to take time to make sure their smartphones and tablets and TVs can talk to each other, but it’s not as certain they’ll take time out of their day if their Internet-connected toaster is having communication issues one day.

Maybe interoperability won’t be a big issue, as Samsung suggested at CES, but it does seem like the biggest hardware vendors are going to find a way for you to buy their stuff and get you locked into their ecosystem of products. It may be easy to connect their things to the Internet, but not other people’s things. They will be compatible but not interoperable. In this scenario, major tech companies will actively promote their own flavor of the “Internet of Things,” potentially leading to the type of epic standards battle for which the tech industry is famous.

3. Privacy

Third, the accumulation of all that Internet-connected stuff – stuff that’s presumably going to be outdated by the time of the next CES show in Vegas — is going to present nightmare privacy and security issues for users. Concerned about people hacking into your e-mail? Just wait until they hack into your bathroom mirror and release your naked selfies to the Internet. In an interview last year with Harvard Business Review, security expert Bruce Schneier suggested that the Internet of Things would be harder to secure than the Web, mostly because “these are devices that are made cheaply with very low margins, and the companies that make them don’t have the expertise to secure them.” Good luck, guys.

That being said, there’s absolutely nothing wrong with embedding more sensors and chips inside objects to make them smarter. Internet-connected refrigerators that order more food for you online when you’re running low on certain products actually sound like they might be practical. And it’s easy to see how something like the “Industrial Internet” makes sense for something such as a factory floor, where the same company, the same software and same network connect a bunch of inanimate objects sharing the same mission.

In many ways, the “Internet of Things” is the perfect futurist technology — it’s an idea that just seems to match up perfectly with the way that we think about the future — every device connected to the Internet. (Or, as Cisco calls it, The Internet of Everything!) It’s no wonder that tech companies are lining up to describe how and why the Internet of Things is finally going to happen. That’s why the Internet of Things has been such a perennial topic ever since the term was unofficially introduced in 1999.

But think of the hype behind the “Internet of Things” from a “planned obsolescence” perspective — consumers aren’t necessarily upgrading to a new TV or new tablet quite as frequently as tech companies originally thought, so they have to find a way to sell ever more hardware. Thus, the Internet of Things is a natural way for companies to sell more refrigerators or toasters on top of more smartphones. (Or, more cynically, it’s a way to keep alive tech companies that are having a tough go of it.) But will consumers ever buy into it? Even the “smart home” concept — probably the first place the consumer “Internet of Things” will take hold — is having a hard time winning over adherents.

There are three big issues that need to be resolved before we can realistically talk about the Internet of Things. The Internet of Things won’t work unless prices come down, the interoperability issues gets resolved and people figure out all the security and privacy issues. But, even then, it seems like a huge burden to place on consumers unless the cost savings, productivity or quality of life argument gets bumped up a bit. Until then, we’ll have to settle for “Things of the Internet” – devices that are all connected to the Internet, but not necessarily with each other.