Market Insight

CES 2017 IoT takeaways – widespread integration of Alexa; the connected car as office or living room; dotdot focusses on application-layer standardization and the potential for private LTE

January 20, 2017

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As in 2016, IoT was a key topic at the recent Consumer Electronics Show (CES 2017) in Las Vegas. Here, IHS Markit IoT specialists analyze four leading themes from the show:

  • The widespread integration of  the Alexa voice service across in third-party products, such as Huawei’s smartphones, Volkswagen and Ford cars and Bosch and Whirlpool home appliances;
  • A vision of the future  connected car becoming the home office or living room;
  • dotdot from the ZigBee Alliance and Thread Group enabling standardization at the application layer for multiple technologies;
  • Unlicensed and shared spectrum driving the private LTE opportunity.

Amazon’s early market momentum in virtual assistance became blindingly obvious at CES 2017 with Alexa integration in diverse products

Eighteen months after opening their Amazon Voice Service (AVS) to third-party developers, Amazon’s virtual assistant, Alexa, burst onto the scene at CES with numerous product integrations from companies such as LG, Ford, Huawei, Lenovo, and others. A number of factors have contributed to the success of Alexa. Amazon’s time-to-market advantage, their openness to developers, and the ease of integrating Alexa have all played major roles in further widening its lead versus competitors in virtual assistance.

Amazon’s success in virtual assistance has attracted big competition. Google Home has earned early praise for its superior technical capabilities and Apple is rumored to be developing a wireless speaker product for its Siri virtual assistant. So it’s becoming increasingly clear that Amazon has pioneered a new wireless consumer platform for the home, one that promises to be a critical user interface for consumers in dozens of everyday activities.

These factors - the central role in the home, the ability to understand and respond to natural language, and the ability to control wireless devices - make the virtual assistant a perfect gateway for the mainstream consumer to the smart home. Amazon’s Echo device has demonstrated an easy, affordable, and incremental path to implementing many features of a smart home. Users often start by adding one or two inexpensive smart plugs to control lighting. With that success under their belt, consumers often move on to voice control of other devices - thermostats, garage door openers, irrigation systems, etc. Voice control, while not ideal for communicating large amounts of information, is perfect for the type of simple command and control operations that are common in home automation. It is quick, simple, natural, pleasingly anthropomorphic, and does not require a mobile device. For these reasons, the rising popularity of virtual assistant devices may be the critical inflection point the smart home market has been waiting for – the entry point for mainstream consumers.

Connected Cars – the autonomous driving technology will enable vehicles to transform into mobile office or living room. Until self-driving car arrives, innovation will revolve around enhancing driving experience and provide computing interfaces for drivers

The high-end connected vehicles on the road today already use advanced wireless technologies. Externally, connected vehicles use cellular technology to connect to the internet and also to cloud computers. Internally, Wi-Fi is well on its way to becoming the wireless standard inside connected vehicles. Just like in a typical home, an increasing number of connected vehicles can now act as Wi-Fi hotspots providing broadband internet connectivity to multiple mobile devices such as smartphones, tablets and laptops. 

At CES 2017, Qualcomm announced that its connected car reference platform will use the Snapdragon X16 LTE modem that will allow connected vehicles to reach data download speed of 1Gbps. In addition, major semiconductor companies such as Nvidia, Intel and Qualcomm now offer autonomous driving vehicle platforms (Drive PX 2, Go, Drive Data) which give car manufacturers access to increased processing power. Access to increased processing power and broadband wireless bandwidth provides a solid foundation for upcoming connected vehicles to utilize advanced cloud computing applications. Using these advanced technologies, leading vehicle manufacturers will start to include advanced cloud computing applications - such as augmented reality, voice-enabled computing and autonomous driving – into their upcoming vehicles starting as early as next year.

The concept cars shown at CES 2017 had common theme where the future connected cars will be an extension to an office space or a living room where the drivers can get their work done or enjoy video entertainment. In order for connected cars to fulfill the vision to become an extension of a living room or an office, autonomous driving technology would have to be commercially available. Only when self-driving cars used in our everyday lives, drivers will be able to take their eyes off the road and do other tasks. The number of announcements made at CES 2017 indicates the first commercial deployment of autonomous vehicles is expected take place around 2020 in limited use cases while wider commercial adoption of autonomous driving technology is expected to take place sometime in 2022-2024.

Until self-driving cars are widely adopted, innovations in connected cars are expected to revolve around providing alternative computing interface and driver assistance. Voice-enabled computing technology (Amazon’s Alexa, Apple’s Siri and Google Assistant to name a few) combined with smartphone projection technology (Apple Car Play, Google Android Auto) is starting to enable drivers to safely use their smartphones while driving. Augmented technology combined with GPS technology will better guide drivers to reach the destination and reduce the risk of potential accidents. In addition, connected cars will soon act as a gateway to smart homes where drivers will able to operate connected devices in their homes while on the road.

Enablers to support standardization focus on application level: intranet of things – to internet of things

The ZigBee Alliance and the Thread Group jointly announced the “dotdot” initiative to enable the use of ZigBee’s application layer specification over multiple network technologies. The initiative is designed to reduce fragmentation in the IoT sector, particularly for smart home applications. Until recently, standardization efforts focused mainly on physical- and network-layer interoperability. However, without application-layer interoperability, devices will still remain fragmented among various standards and vendor-specific solutions. Fragmentation leads to complexity for both suppliers and consumers, and therefore restrains market growth.

Furthermore, dotdot, as well as analogous efforts, such as the Open Connectivity Foundation’s “IoTivity Project”, are an important step on the path from “Intranets of Things” to a true “Internet of Things”. Currently, most IoT deployments are vertically-integrated and isolated; specific devices and sensors in the field are connected to a specific application and data is contained within this deployment. In such an environment, the priority is on reducing complexity of deployment, rather than on enabling interoperability with third-party devices and applications.

In a true “Internet of Things”, however, a key goal is to enable third-party applications to access the data from the primary deployment, provided sufficient security, privacy, and business model mechanisms are in place. Much as opening the smartphone’s capabilities to third-party app developers spurred tremendous innovation and growth in the mobile industry, so will opening up IoT device data to third-party developers increase innovation and growth for the Internet of Things as well.

Private LTE for IoT is an emerging opportunity, but there are significant challenges

One of the major talking points at CES 2017 among mobile infrastructure vendors was the potential for unlicensed or shared spectrum to boost the capacity and reach of LTE networks. There are a range of technologies, such as the standardised LTE-U and the yet-to-be standardised LAA, LWA and MuLTEfire, being considered for deployment.

These are earmarked for the unlicensed 5GHz band, which is currently used for WiFi. A range of methods, notably listen-before-talk (LBT), have been developed to allow the co-existence of LTE and WiFi in the same bands. But such efforts have yet to alleviate the concerns of WiFi stakeholders that the deployment of LTE in the 5GHz band could lead to interference with WiFi devices.

This ongoing controversy, as much as the time required to mature the new technologies and to finalize standards, could delay the wide-scale implementation of various flavors of unlicensed LTE. Nevertheless, this has not dampened the excitement around unlicensed LTE and particularly MuLTEFire. This flavor of unlicensed LTE is touted as being particularly disruptive because unlike LAA and LWA it doesn’t require an anchor in licensed spectrum.

This means that companies that lack licensed spectrum, such as enterprises or telecoms and cable operators without existing mobile operations, could potentially deploy networks independently of existing mobile network operators (MNOs). It’s noteworthy that the MuLTEfire Alliance has attracted not only major infrastructure vendors such as Cisco, Ericsson, Huawei and Nokia but also the leading cable players Comcast and Liberty Global.

For mobile infrastructure vendors, MuLTEfire represents an opportunity to sell directly into enterprises, bypassing the traditional role of the MNO. MuLTEfire proponents argue that selecting a dedicated private LTE network over a public one run by an MNO gives the enterprise greater ability to determine specific service levels in terms of latency, throughput and mobility requirements as well as the ability to scale up coverage and capacity when needed. Such control and flexibility potentially makes MuLTEfire suitable for industrial IoT in demanding, localized environments such as transport hubs, offshore sites and factories.

Once standardised, MuLTEfire will be among the range of technologies enterprises will consider for specific IoT uses cases. But it will face a number of challenges. Leading MNOs with the benefit of existing relationships with enterprises will also be targeting industrial IoT opportunities through the implementation of network slicing over existing LTE and future 5G networks and the deployment of their own unlicensed LTE networks in localized areas. Some enterprises will be reluctant to rely on mobile technologies over alternative ones to connect devices and to manage localized mobile networks after initial deployment. Because of these factors and the immaturity of the technology, MuLTEfire represents an emerging opportunity for mobile infrastructure vendors, but one small in scale compared to their core, intensely competitive business of selling equipment to operators. 

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