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​What lurks beneath the Internet of Things hype? Nagging security fears

CES was all about making everything smarter and getting devices to talk to each other. But few people were talking about the potential for hacking.

The Samsung Family Hub refrigerator is a connected appliance that could be plugged in to the Internet of Things.
Ry Crist/CNET

This story is part of CES 2016. Our editors bring you complete CES 2016 coverage and scour the showroom floor for the hottest new tech gadgets around.

If you go by what everyone was saying at the massive CES tech showcase, we're speeding toward a future in which everything is connected and talking to every other thing, all to make your life a little better.

The annual gadget extravaganza was full of electronic marvels, from Samsung's super-fridge to Internet-savvy cars and even diaper-changing pads that measure poop. Those and a zillion other smart devices had the Las Vegas show floor and company suites abuzz last week with optimism about the so-called Internet of Things.

Here's what fewer folks were discussing: the nagging concerns about security that have cast a shadow over the shiny Internet of Things promise. It was just two months ago, for instance, that the hack of Chinese electronic-toy maker VTech exposed the personal information of 5 million customers. More broadly, there's the unsettling notion that smart homes can open the door to hackers.

If consumers are worried about incursions on their privacy or personal data, that would be bad news for gadget makers.

"It's a potential barrier to customers adopting the new technology," said John Curran, managing director of the communications, media and tech practice for consulting firm Accenture.

A study conducted in November by Accenture found that nearly half the respondents cited security concerns and privacy risks among the top three reasons they would stay away from Internet of Things devices and services, ranging from smartwatches to connected home thermostats. The survey, released last week, involved 28,000 respondents from 28 countries.

The key for companies offering these services is to figure out how to convince customers of their ability to protect sensitive data, Curran said. "The study indicates tremendous upside potential," he said. "People just aren't ready to jump in just yet."

The onus is on the tech industry to figure this out. "It's up to us as tech providers to make consumers excited," BlackBerry CEO John Chen said last week in an interview. With the company's BlackBerry Priv smartphone, for example, the company has given people tools to control what information they share with others.

AT&T, meanwhile, said it has committed to being transparent when it comes to how it handles its data. "We have been more diligent than any other carrier about how we do things," Glenn Lurie, chief executive of AT&T's mobility business, said in an interview last week.

Gaining trust

A lot of it comes down to handling the data with care.

"If you don't have trust, you don't have anything," Ann Crady Weiss, co-founder and CEO of Hatch Baby, said on a panel discussing baby tech last week. Hatch Baby makes a smart changing pad that weighs, among other things, a baby's poop.

WonderWoof bow ties measure your pet's fitness level. Such a device seems innocuous enough, though it is tracking and transmitting data.

Seamus Byrne/CNET

AT&T, meanwhile, said that because many of the smart-home devices it powers run off its more secure cellular networks, there are fewer concerns.

When it comes to connected cars, Lurie said older vehicles that were vulnerable to hacking used open Wi-Fi systems and outdated infotainment systems. He downplayed the controversy from last year of hackers remotely killing a Jeep driving along a highway.

Many of the cars on US highways now feature a connection from AT&T. A hack is not something AT&T could afford to let happen.

"This is about our brand, and we're not going to put that in harm's way," he said.

An opt-in world

When it comes to "smart" anything, giving consumers the option to "opt in" will be critical to gaining their trust. This is the idea that customers actively volunteers their data in exchange for some sort of benefit, whether it's their car's location data to improve a city's traffic management or their browser's crash history to ensure a less buggy experience in the future.

"As soon as they see a purpose, they understand," Ericsson CEO Hans Vestberg said last week in an interview.

A lot of services on the Internet, however, are "opt out." Think Facebook: It's only after you sign up and join the world's largest social network that you can go into the settings menu to tweak who gets to see what you post.

Some of that is OK. Most people wouldn't dream of posting sensitive information like their home address or Social Security number on Facebook. It's about determining which parts of your information are worth the extra layer of security.

"You need to decide what data is really, really mine," Vestberg said.