CNET's Next Big Thing: The promise and the pitfalls of the smart home
CNET's Next Big Thing: The promise and the pitfalls of the smart home
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CNET's Next Big Thing: The promise and the pitfalls of the smart home

Smart Home
[MUSIC] [NOISE] [APPLAUSE] Thank you. Hello. And welcome to CNET Presents The Next Big Thing. I'm Lindsey Turrentine, Editor-in-Chief of CNET.com. And I'm Brian Cooley, CNET's Editor-at-Large. I work for her. This is our 15th presentation of the next big thing here at CES so it has become quite a little tradition. We thank many of you who've been here before. Thank you for being here and many of you have been here many years and thank you for those of you who are here for the first time. Towards the end of the program know that we are going to be getting some Q and A happening and we'll talk about those service elements here in a minute. We want you to be part of the conversation. So please feel free to Tweet throughout the show, the hashtag is CNETNBT. And the Q&A will happen toward the end of the program and we'll make sure that we allow some time for that. Also we tend to have a tradition at the Next Big Thing where we basically descend upon the panelists and make them late to additional questions face to face. So it's kind of a nice vibe up here at the front which now that I've said it, they know it's coming. [LAUGH] C Net has, for a long time, been engaged in the smart home revolution. We've invested in a beautiful home in Louisville, Kentucky and we also have been working with the city of Louisville on a smart home that is part of an apartment in downtown Louisville. Our smart home editorial team uses both of these locations and we use them every day as a living lab, to test all the devices that you're here to learn about. We've kind of taken over the city and it's a very smart forward looking city by the way. But as excited as all of us are in this room, if you're here for this topic and if you're here at this CES this year, you're almost certainly got a least a significant part of your mind On smart home. The technology category does remain somewhat on the cusp of a major adoption. It's very healthy, but it maybe hasn't broken out as fully as some of us might have thought it would've by now. We think 2017, the year ahead, is gonna mark the beginning of the future, though, in which our homes really grow, and much because they start to anticipate our We needs. In the base case scenario our future homes will simply let us exist. And if this industry can accomplish that. The Smart Home will have achieve something that no other technology has accomplished. Which is anticipating and to doing our needs. To help us identify and explain the potential of where we see things going in the year and two ahead we've assembled what may be the best team we've had as a group of panelists on The Next Big Thing, including, and we're going to bring our guests on now, Rishi Chandra, who is VP of Product Management for Google Home. [APPLAUSE] Next we have Mike George who's the Vice President of Echo, Alexa, and Apps for Amazon. [APPLAUSE] Joining us from Smart Things, we went right to the top here, the CEO Alex Hawkinson. And finally Jason Johnson, CEO of August Now, let's set the scene for some of the challenges that we want to solve with these panelists right here today. [BLANK_AUDIO] [MUSIC] Home, it's one of our great common experiences. [MUSIC] Yet having a smart home, is not yet. It remains novel to most. Who remains just fine, clicking a light switch, or living with a thermostat that doesn't learn a thing. So what's standing in the way? [SOUND] It is a big jump, you will pay a premium for a smart product, pretty much every single time. A regular light switch can cost as little as $3. A smart one, at least 30. The same goes for thermostats, door locks and irrigation controllers. They all cost multiples of they're dumb predecessors. Then, there's complexity. We're almost born knowing how to Operate a dumb house but when your house goes smart suddenly you're fiddling with an array of different looking, feeling apps. There are platforms that bring it all together either on one screen or via simple voice command. Alexa turn on the kitchen lights. Okay. Things like Apple's home kit or Alexa or smart things or some of the other hardware or software platforms out there can bring things together and make things a little more simple. But there's still gonna be that fragmentation out there. None of them pulls in 100% of the devices that are currently out there right now. [MUSIC] So, you found the money, and you figured out the installation and the integration. Great. But is your home that much better? Or is it just more high tech? We're quite yet at the point where the home touchlessly anticipates the occupants needs. Well, ideally, it's supposed to make your life easier. Part of it is peace of mind with security. Part of it is incremental time savings. You don't have to walk over to set a light switch or make a change to the thermostat. You can just do it from wherever you are, or it happens automatically. Too often today, the home is Still a box of smart things but has not yet itself become a smart thing. Of course there's security. The largest hack in history took place recently and it happened on the box of insecures smart own devices. It's one thing to imagine that hackers screwing your thermostat but your cameras? Or front door lock. In the big picture smart homes are different from our smartphones, and laptops in that they are part of a bigger village. Smart cities.which are beginning to bubble up with vast potential benefits. If you can come up Up with civic solutions it improves people's lives by combining open data and crowd sourcing and citizen signs, can you see this collective pride in this city that we did this together and people lives are being improved and as a mayor theres not anything that's going to be much better than that. This is a different market that may see a major role for home builders and realtors In the adoption curve. The smart home is for everyone, let's find out how to unlock it. [MUSIC] We laid down a few gauntlets there. [LAUGH] Cost, complexity, and such. Go ahead, please. Just a few issues and one of the biggest issues seems to be people are still kind of uncertain about how they're gonna make all of the devices they know are interesting talk to each other. I think it'd be great to hear from Smart Things about this. Yeah, I mean one of the big changes that was really different a few years ago is that There were a lot of, I'll say it, best guess at a walled gardens, right? And a lot of bespoke devices where they didn't easily talk to one another. There's still a ways to go, but really a tide towards open that's happened over the past year that has resulted in some real sales acceleration for us, adoption acceleration, I think, for Multiple partners, and it's exciting to see. So examples, all three of these companies, all of our products can work together in compelling ways. I haven't been on a panel yet where that has been the case, I think that's a milestone by itself. That's pretty huge. Yeah. Mike, what do you think about the role of Amazon in helping tie this together? Do you think that you helped or do you think this was going to happen anyway? I think that we helped. I think that the simple voice interactions of Echo and dealing with Alexa and the way we, when we opened that up with the Alexa Skills Kit and the Alexa Voice Service. And then separately on the Skills Kit we saw quickly that smart home device manufacturers were using the Skills Kit to To voice enable interaction with their equipment. Then we launched smart home specific APIs and now we have some primitive capabilities with our smart home APIs right now and we'll just continue to evolve so that it sort of normalizes everything. You just talk and control the device. So I think we we helped a bit. One of the things I think we detected the consumers are picking up on and maybe a lot of us in this room have felt that or working with less tech friends or relatives in some cases is the smart home devices on their face seem to do very simple tasks that aren't that difficult. It's nice to have remote control, and learning can be maybe difficult to master. So it seems that there's At first blush, very little gain to some consumers' mind for a significant amount of install and expense. What do you do to communicate to them the big picture of how rich of an improvement this can be? Because on its face, they look like a lot small improvements. So, I think there are three things we found over the last few years. All of us, there's this [INAUDIBLE] space that consumers care about. Number one, saving money, whether they are saving heating, lighting costs. Number two, making your home more safe and secure and then number three, this is kind of catch-all category around convenient. All right convenience and maybe some delight in there as well. It's fun to have some pretty magical things like some of the devices here in your life. And those are the things that people identify with and tends to be the main motivations for why they are purchasing these products. Now what you're doing with that, with August with your access plan which is still very new, is you are almost putting the service in front of the product. The service is that you partnered with We set out to rethink access to the home, right? And yes, we make a device that we think is pretty good looking, attaches on the inside of the door. But the true magic, of course, as you've mentioned Bryan is the software behind it. I think in all of our devices we make, it's the software behind it. It's the real magic and And to your point is was our goal, more than just have you be able to unlock and lock your door using the August app. What if you could use other products and services with the lock that together creates a greater experience? I challenge it for a second. I think there's been some negativity around Sales and the value proposition fit in the space. I think that everybody I talked to, I think that what's happened, a few years ago we felt this really compelling need to educate consumers heavily on the space. We have seen a transition in the numbers that indicate the move from early adopter to mainstream in the Sales results. And so it's less about that convincing on the first case because there's a lot of consumers buying connected, there's a lot of people starting with the voice control, moving into connected lighting, then branching into these adjacent cases because they get excited about it. And because there's an open model now, in our case it's the works with smart things program and so on Once the consumer starts in, it's very simple to make these things work together. And so all boats are rising a bit now. So just as one challenge, I still think it is a challenge to kind of educate my mom, as an example, in the space. But people are building some pretty significant businesses right now. It's compelling enough. Rashid, let me ask you. One of the experiences I have when we talk about smart home, sometimes the concept of smart home or connected home, people react to as sort of a 1% thing. That's for people who have fancy things or want lots of fancy things. I don't need that, I don't wanna get lazy, I can turn on the light switch. What do you see when you look past that? Do you think this is really more about the individual devices or about that a-ha moment that people are gonna when they use something like Google's powerful infrastructure behind Google Home? I think there's always a wow moments that people will see, right? And I think that is always a convincing Mechanism like, "Wow, I want to bring that to my house." I do think, look, the bar is very high in terms of it is very easy to go and walk and turn on off the light switch, let's be honest. That's a very simple mechanism that we're used to doing for very long time and so there has to be enough value that when you see it and you experience it, that is like, "Wow, I need to go and make that better experience." I think the voice Mechanism was a breakthrough actually, I think for a lot of home automation and smart home capabilities. Because if I have to pick up my phone and interact with a bunch of stuff in my house, you kinda lose this again, the simplicity. It's not as simple and as easy as something as saying, using my voice to actually go and control a bunch of different devices. And so I agree that there are used cases that people's going to bring in to their home like whether they bring in voice system in or doing security mechanism, I think security is completely untapped opportunity right now that exists in people's home that everyone's care about, everyone's want to pay for. And as they start introducing these pieces, all these pieces connecting together, it matches the automatically means more more exposure about other Capabilities. So, I think it is about the first thing that you're gonna get in and then it being additive. Remember, the home is a very complex set of appliances and devices. So there's no such thing as I'm just becoming a smart home. The reality is, you enter with one or two different devices, and then you're expand. I think, we are just at that beginning of now the use cases are kind of being compelling on their own. And as we talk like, the expansion is difficult, because you've got to connect to all these things, and now it's becoming easy. Now you just see expansion is coming over time. For the birds arriving. The thing that is interesting to me, is that when you're talking about Smart Home moral growth, and the technology of it, or trying to advance it, but The numbers I look at 6 to 7% of the US population is interacting with a smart home device. 94%, 97% have it. Or probably 95% have it. And I think what's gonna be happening is some of these things that we want, that I think the video and your remarks in the beginning said we the smart home will start to anticipate things we need Some of the simplest things, even though it's a light switch or a thermostat, are going to feel like magic to the 90% that haven't touched this yet. And if we can make every piece of that process of acquiring it, getting it installed, and making it voice enabled, named, seamless and frictionless so that my mom It's like your mom. My mom can do it, and I think we win. And then people begin to see the value of smart homes, see how it needs for security and other things, and it's going to take a while, but I think it's moving faster than everyone, like the 90% what you realise. I mean, I would say there's needs space things. Like you have the one incidence away, like I find in this company. There is flood in my house. It's a solvable problem that seems really worth it after you've gone through a problem. But these delight based cases that you see, where even if it's really simple, what's remarkable for you. Humans are funny creatures, think about how you get excited about a paint color you're choosing for your dining room, and you're not interacting a bunch with that. But Something about the magic that's experienced where past the needs really does hook people in an emotional->> Yeah. Way. And we're all seeing it in our base. Absolutely. Yeah. Well, I think this brings us to an even tougher topic which is security. And as you can imagine, we had seen here a lot from users about the increasing concerns around security. And specially technology reaches further in to people's live. That people get use to wearable and connected cards and into their homes. They start to worry about what's happening when they let people in to their technology. And, it didn't help of course, as we've reference stir a couple of times that we had all the headlines, fairly deserved or not, over simplified or not, around this Biggest hack in history, denial of service attack that was foisted largely across insecure devices in the home. Of many brands, by the way. And this, of course, will register in the consumer's mind. The question is, did it make a big impact or not? All of these concerns are fueled in the minds of many by everything we just talked about but especially by fans of the show, Mr Robot. We're gonna show you a little bit. [SOUND] Even though the European Union [INAUDIBLE] [SOUND] I'm just the messenger, I am telling you folks, this is what they don't want you to hear. Because a union strike at Comet National Plan to cause an energy shortage, the likes of which has never been seen in the Northeast. This is part of a strategy to declare economic war on this country, and they know it. They know exactly, [BLANK_AUDIO] [MUSIC] [BLANK_AUDIO] Aah! Aah! Aah! [BLANK_AUDIO] Well, what am I supposed to do? Nothing is working. [MUSIC] Unplug what? Everything is inside the walls. That's how it was installed when I ordered the smart house package. How long is it gonna take before this all gets fixed? [SOUND] [MUSIC] [BLANK_AUDIO] How long do you think she's gonna stay away for? Long enough. [MUSIC] [BLANK_AUDIO] Nice place you got. Ivy, is there a pricing grand [UNKNOWN] at his cash? I worked hard for what I have. I'm happy, I get to look you in the eye. I've taken down your company, taken over your home, and now [BLANK_AUDIO] I have you. [MUSIC] Who up here resents us playing that clip? Anybody? [LAUGH] Just throwing that out there. You've all seen it. We know you've all seen it. Just throwing that out there. Mr. Robot is a really hot show It's very well researched, and it sits right in the middle of reality and the future that's just shy of fantasy. And joining us now here to talk about this with us is Carly Chaikin, who plays the brilliant hacker Darlene on Mr. Robot. [APPLAUSE] Welcome. [APPLAUSE] Thank you. I just want to start by saying, don't be intimidated by me. [LAUGH] But they're already writing a patch against you, believe me they're working on it. Alright, we have a ton of questions about this. There could have been lot of ways to terrorize this character robot who plays an attorney, right. How did a smart home gone crazy wrong get chosen. Well, plotwise the biggest thing was to take over the house for us to live there, pretty much. To be our new kind of home base. But I think violating someone's home is kind of One of the biggest ways to violate someone to kind of take over their home base and kick them out. So I think it was kind of the most dominating thing we could do. And it was done very realistically, to be honest. I mean, it could have been more overblown, you could have made it, it really fits in to a set of concerns that the person who does have a smart home or who is considering one can look at it and say, That seems like it could happen. As opposed to being fanciful. Right, there are like subtle things kind of coming and even the heat, the volume, all those small things. Even though the heat, the shot was very oblique, the shot. You kind of had to notice that it crept back down the first time. It wasn't over played. And yet, there's something about, like you say, this is such and intrusive scenario that it really registers quickly. Yeah. You've tapped into the annoyance factor too, right? Yeah. If not fear, annoyance. Yeah. So the stadium seems realistic and like Brian was saying, sometimes subtle, what was it like to shoot that, and research what went into that scene? I mean, being on the show, just being able to shoot everything and research everything has been so amazing and incredible, I feel like I can type fast on a computer, but other than that I didn't, [LAUGH], like technology and all that stuff never really was like in the forefront of my mind. So being in a show now everything is kind become about that like every room I walked in to it's like I can hack this small thing and all gonna get their phone not that I actually could but we can pretend that I can. So it seem it's very well research. This is not the only scene that has this real ring of reality and veracity to it. What about the show and the team that does it keeps it so authentic? Especially as you were doing that particular, do you have a bunch of smart home buffs? On the show team, on the writing team, or is it just so they did their research? What we have our main tech guy who's also one of the writers and producers, Cole Dona is, he used to work in cyber security and so a lot of every single hack that we do, they do it in real life first to make sure that it works and can actually happen Everything that happens all comes up in real time, So obviously we're not actually coding when we're filming but it's all pre programmed so they'll spend 3 weeks doing something that you'll see in screen for three seconds. But they're so knowledgeable about everything, and they test everything, and every single code you see on the screen is real and... Legitimate for what we're doing. So you know this. You know that everything is real in the sense that it's possible. And it's been tested. How does it make you feel about all of this technology. You must see it and think, okay, I can see the utility, that seems cool. But are you afraid of it now or are you excited about it? My god. I am like [UNKNOWN] [LAUGH] But it's just crazy because most of these things that we can do other people can do but a lot of hackers aren't capable of doing it to that extent, but in my mind everybody is. Someone was trying to People try to hack me too all the time. Someone was trying to get into my iCloud, and I was like great. Now all me entire apartment's bugged. They're in my TV. They're doing this, that, and the other and gonna take over my life. And I'll call core and be like, what do I do? I'm freaking out. But it's made me so incredibly paranoid Where someone like tried to touch my bag awhile ago. And I was like, now they dropped like a tracking device and. [LAUGH] Okay, you got to get off this show. I know it's doing really well but you got to get off this show. [LAUGH] Yeah, for my own sanity. So, do you have smart home gear in your place, or not? And we have a net which is great and Alexa who's like my best friend. Okay. One point, one point. And, but yeah, I mean both of those you know, so interesting what you guys are talking about with the special, with the voice control of Alexa, I've just think like, what the, But even, I'm a very lazy human being. And so, that's where that comes in of being like I don't need to get up to change the temperature or before I get home I can just take out my phone and set it, so it's not freezing. But that That, do we have any other smart stuff? [LAUGH] We're talking about it. We're talking about it. Right on the edge. We're talking about it. This is gonna be the deciding factor. Maybe not after this. Yes, this is great. Thank you so much for coming up here on the stage with us. Thank you. And we're so glad you're here to watch Yes, I'm so excited. We feel special. Carly, thank you so much. Thank you so much, really nice to meet you. Thank you. Thank you. [APPLAUSE] Thank you guys. Thank you. Carly Chaikin everybody. And yes she really is here, staying for the rest of the session. That's a great endorsement. We're honored. We are. Okay, so now we want to turn the corner as we have Gotten a little preheat here of some of the worst scenarios. Let's talk about reality. How many of you were cringing at that scene or how many of you were saying okay we do need to defend against that. We have to focus on security from the start of these product development processes. And we have to think about security from the beginning as well. And it's a little bit of a race. We as the people who are trying to protect folks are working really hard to stay ahead. And the bad guys are trying to stay ahead of us. And I don't think that will ever end. No. But I think we're taking very measured sensible, very mindful conscious steps to make sure that security is a part of that. And you know, one thing I was thinking, and all of you have you know excellent brands that you care about and your companies maintain them very carefully. But Amazon in particular is a company based on outstanding, unfailing relationship with the consumer. Your risk could seem to be higher, your sleepless night I would suspect with be a little bit more. I think we had those sleepless nights from the beginning, the minute you want to sell a product to a customer and you're, you're taking responsibility for processing their payment instrument and you're storing that and you want And you know that every interaction you have is either a trust builder or not. You have to think about it from the beginning of everything you build, that's the foundation. And we've worked very hard to build that trust in our customers and we will do nothing to breach that. I do want to mention that you know, also the lack of technology has some security applications. And you know, don't want to freak everybody out but how many are you are a 100% sure right now, you're front door is locked? You're 100% sure it's locked Great, maybe 1%, 2%. The rest of you aren't exactly sure. [LAUGH] Now if you had a smart lock, you could actually check right now. And you could lock it. So there's a trade off when you go from the offline. You go from the non-intelligent to the intelligent systems. It actually adds some security. I would say, I don't think security is a new thing for technology. This is something that we've had to deal with as an industry for some time across all types of computing based devices. I think the difference here, and the unique thing here is that You all of a sudden have, because of the whole host of appliances now that are adding smart capabilities. You're having companies, that are not necessarily software companies, to be quite candid, right? They're kind of entering this new capability set that they're brining to bear. And right now what we have to do, as an industry, is help give them the tools to provide the right security mechanisms. That we already employ in a bunch of different phone devices today. In routers today, in computing devices today. And I think that's gonna happen, it's actually happening now. I mean Google and others are also looking at how do you deploy secure systems that a ceiling fan manufacturer can take and deploy without having to build it themselves. So that we can remove some of the vulnerabilities that might be existing if people are doing it on their own. In the end, security is all about the [UNKNOWN] we found in the past, is an opening collaboration with the industry to solve security, not one-off companies trying to do it on their own. Totally. And so as we are, and the industry's now getting to the point where we can give the tools to the industry where we can make sure end-to-end, like, of course Amazon and Google and all the companies here are putting security first. We have to make sure the entire industry does. Because with Google Home, I can connect with a variety of different devices, but those devices aren't being built by Google. And we have to give them the tools so that we can make sure those devices are secure. And then- Which brings up a really important point. We've been talking about Open. We've been talking about how all your products work together, which is amazing and fantastic. As we move forward into a world where everybody's working very closely together, there's also the reality that that mashed-up group of products is only as strong as its weakest link, really. So, I'm really curious, and maybe Richie, you can talk about this. As you're vetting partners, which I'm sure you're very busy doing right now because you're new. Yep How does that work? How do you vet all your partnerships to make sure that there is no weak link? I think it is fundamental. I think Google, for example, announced something called Android Things which the goal is specifically to give a platform for a variety of different manufacturers that they can believe and trust in. And from a security standpoint has updates already built in to it so we can learn from the challenges of the past. And so it is an ongoing discussion we always have with the partners, either as an endpoint to a Google home or embedding the Google system inside the devices, which I'm sure you guys are doing as well. In the end, we have to have security throughout the kind of relationship with the customer as well as what we have. And so, that is part of the ongoing process we have. And I'd say, with our ecosystem it's A, we don't want to see this clip but it's great because as with more than 200 connected devices in my house. Like, it's funny because this is what we imagined, right? I've been pretty proud of the industry leaders with the philosophical stance toward security. That it's not a feature, it's something you You percolate into the architecture from the very beginning. But then it's clearly working together on technologies. In our case, manufacturing time, hooks into the hub, and other technologies that make it very inherently secure in a way that's very difficult to hack and so on. And then there's There's process together as well. There's a vigilance for in each case a works with program that actually includes the checks where this botnet attack is an example you can't. No device, many of our programs that allow a fixed password to exist that isn't changed they would never make it through. The certification program in the first place. So it's, again, it's something that just takes this deep philosophical commitment to. But, I think we'll get there. We're getting this reality. I mean, would you rather keep cash under your mattress? Is that more secure than keeping it at a bank electronically? It's not, so Would you rather only communicate with post and paper? Is that better? No, it's not, right? In this case, it's just it takes that level of vigilance. It really is, it comes full circle from what the tools and services you provide to the developer community, the OEM community The services that are in the cloud that enable voice enablement of skills on smart home devices. How is that secure? For instance, AWS lambda has its own permissions architecture as does AWS in general making sure that the skills they're running are secure. And then the way that we interact with this physical device to an Alexa voice service end point. That's a cure and then how you get back and give the consumer some confidence that what they're buying to install in their home is part of this eco system, this hetorgemia eco system is actually secure. What is your program called that it works with? Smart things. Smart things, ours is works with Amazon Alexa. And it is our signal to the customers of this smart home equipment that it has been vetted by the vendor, by us, and by a third party that it provides a great customer experience. So we're very aware of this, and it's stitched into everything that We're doing it. Can I get one more comment on the open prompt. Yeah, of course. You know, one thing that's interesting that I think will manifest this year. That it's the deeper layer, is when we take it seriously is that. Just like two factor authentication, as an example. If you don't want a phishing attack like the D&C had or otherwise. You have two factor authentication in your Gmail or whatever, right? It's pretty important. I think as devices work together, there's a similar corollary here of sort of multifactor data that comes together to make something hypersecure. Should the multifactor be voice and/or face recognition? Is that a mega trend going forward? I mean, it's not just the code being put into my Security panel, the house, the router knows that my phone is on that network and when I'm reprogramming it that my fingerprints biologically is on that phone at that moment. [CROSSTALK] It's a tie to get it between all these things that allows it to really be sure. It's not just a, it's not a code, It's not something simple. There's By being open by working together, we allow some of those layers that we'll really lock it down and I think we'll drive the tide towards the centralized platforms versus just the totally fragmented mess, yeah. Well we've been tackling challenges and perceptions so far, kinda going after the things that we think can be cleared up may better made in a Less friction filled, trying to get at those hurdles and the motivation that stand between this really big adoption. It'll make smart home ideally the next iPhone, not the next Segway. All right, that's kind of the goal. Segways were awesome by the way. They were, talking volume, not quality. [INAUDIBLE]. We've, [INAUDIBLE] we're seeing the smart home [UNKNOWN] into this really bright future actually, and I think we're hearing a lot from you about that. But the idea is that this will turn our homes not just into a place controlled by voice control and apps, but a home that we can just exist side by side with and will take care of our needs for us. Pretty exciting. Yeah- [MUSIC] As my driverless car is trying to find the best route out of this traffic jam it's also letting my house know that I'll be home in 20 minutes That way you can adjust the heat to my desired temperature and my kitchen assistant has already started to prepare dinner. As I approach the front door, the house recognizes me and unlocks the door. It also sees I'm carrying groceries and opens it for me. And once I've gone in the house, the lights and the blinds all adjust to create the lighting I like at this time of day. Hi Vanessa, how was your day? It was one of those days. At least the commute went smoothly. I've started the dinner. The chicken will be done in 20 minutes. The oven is pre-heated for the bread and there's a salad in the fridge that will expire in two days, so you might wanna use that. Sounds like a plan. Great, I'll see your daughters at the intersection of Willow and Pacific Will be home in about 10 minutes and I texted her to remind her to skip the candy store. I wonder if that happened.>>Throughout the day the home assistant has been monitoring my heart rate, blood pressure, and steps and while I sleep tonight it will monitor my vital signs, sleeping pattern, and the depth of sleep. With all this data it can make useful suggestions about my diet. Exercise programs or even call 911 in an emergency. The lights come on as I enter each room and will go off when I leave. That saves me a lot on energy bills. I'm also sipping on a cocktail made for me by my kitchen assistant. Because after the day I've had, I deserve it. Do you have any status updates for me? Your daughter has a coding assignment that is due tomorrow morning that she hasn't started yet. Man, I forgot about that. Can you remind me after dinner? Do you have anything good for me? Yes, some good news. Your mom went 10% over her step count for the third day in a row. Wow, that's great. Can you call her, please? Sure, dialing now. [MUSIC] Hey mom, I heard the good news, congrats. That's great. All right, all right, it sounds like you're busy. I'll try you later, bye. What's a good TV show I can watch that fits my mood and I can finish before dinnertime? How about CSI Silicone Valley? Sounds good. Play it. [MUSIC] Excuse me, I have a TV show to watch. [MUSIC] Now that's a scene that's more at home. I like that view better. [LAUGH] You know what I like? What I like about the house that That we just, [INAUDIBLE] previewed. Is [INAUDIBLE] we all would live in, it looks [INAUDIBLE] recognizable, it's not over the top crazy, modern even in a [INAUDIBLE]. And it seems achievable, what is it gonna take to get to a point where everything is actually anticipating what we need? Jason, you want to get started. Well it's funny because what I was about to say was actually something you just showed in the video. We thought, in August, we thought, my cofounder [UNKNOWN], he's a great designer and thinks through interactions very thoroughly. And one of the things we thought through was, the best experience and the best interface is no interface, right? Your home should understand who you are. You come and go and There's an association that we talked about, multifactor authentication. And so you show this home of the future, but with August, it's actually here today. If you have and August lock on your house, and you have this feature turned on called auto unlock You walk up to your door, and you leave your phone in your pocket, your purse, your backpack, and it recognizes you and it unlocks the door. And you just walk in. It's one of those things that once you've experienced it you're like wow, this is the way that all doors should be. And it is here today and we have hundreds fo thousands of people that That unlock their doors everyday that way. And it's one of those practical things, some of these things, perhaps, maybe aren't as necessary today. But it's great to see what we can do with technology. We should talk about the steps needed to get there, but I mean I will say that what drives, I think, a lot of us, in our hearts is The prospect that if there's enough homes like that, you forget too, there's piece of mind. All of us have aging parents, let's say, they will be able to live in their homes longer, really happily. That's awesome, wow, what a societal benefit, right? That helps, if there's enough of those Half the carbon footprint reduction goals. Laying that thing, turning down its energy use when it's not there. So it's the driver too. There's a society level impact. I think that we see the prospect to have. So it both seems awesome to live in that house, but it's also, it seems exciting in terms of macro outcome. So we can achieve from it. Back to the original I think the original question is, what is it going to take to get us there. You think about the advancement in machine learning and neural networking. That's what helped us with a lot of the voice technology, a lot of computer vision. Effectively unlimited compute power of various clouds AWS School and others. When you have that much compute capacity, new machine learning techniques, that will make it possible to recognise someone's face in the camera, or someone is an individual, a unique individual with a voice or some other feedback. Then those things become possible because you build feedback loops in all of these interactions that you have with equipments that is constantly connected providing signals back about you, and then you can start anticipate what's happening in that persons life they're on the way home that some of stat set to something. By the time they get there you should have temperature to a certain 68 instead of 65, but it takes massive compute power, it takes ubiquity of networking and connectivity, it takes what's happening in machine learning and neural networking and the beauty is we're at a golden age right now. We're making big advancements in all of those areas, so I think That's a potentially realistic picture of what could happen in the not so distant future. But a lot of people are not gonna experience that. I mean you'd think, we have seven plus billion people on the planet. This is gonna be reserved for, A lucky few. A lucky few. But there will be many many less Less comprehensive, magical moments going on with turning light switches on and off and if you recognize when you go through an [UNKNOWN] door. So I think the sun is shining on this space right now. Yeah, and I'll tell you, I think in addition, I 100% agree. I think the amount of computing power As well as machine learning capabilities that are being kind of built today. It's immensely giving more opportunity space to doing things like this. I think the other piece that this this showed kind of implicitly was one is that there is this notion of all devices even working together. Right it's pretty fundamental we talked about it a little bit but we do have to make that work really seamlessly. And we're not there yet. But we have to make it so that Every device is aware of each other in some context where they can work together, cuz that's how you get the value of what we just showed. The other is, we talk about Smart Home as kind of a separate distinct kind of experience for people, but it's really not, right? It's an extension of what the assistants gonna be in their entire life. Right. Right, the assistant, and I understand that the talk is about Smart Home, but In the end, the assistants can be pervasive around when you're at work, when you're at home, when you're in the car, when you're at school, whatever it might be. In your hotel here in Vegas. Exactly, I mean. [LAUGH] In the end, it's gonna be about can we understand the user in all context, so that in home we can deliver the right value proposition or use cases for them, but even when you're outside the home, Even examples showing when you're driving home that's something that just doesn't happens at the home itself but, it has to connect with everything else that we're actually doing. I don't know how many in the room are in the industry but, presuming a lot. Give tactful steps 2017, here it is January, 2017, holy crap. Holy crap. What's going to happen this year going back to your first video. We see mechanisms to bring down the cost, for everyday people. So you will have, for less than a $100, starting points that give you one of those propositions and let you experience some of that magic. And you see it in a combination of the different strategies from all of us. In our case, embedding our technology into devices you're already buying etc. So cost is coming down. Complexity and friction's still a giant issue, all right? It's got to be made easier and it's not just the open standards. But, examples like you don't have to download a separate app, right? You don't have to set up a new account. You, all these things that should just be there. And there's some inherent advantages in each of the companies that they have in tackling that. But, lowering friction. You'll see this year some pretty big steps. And then lastly, I think services will play a pretty big role in this. And that there is a support that we see users needing as they go past that very first device to get that thermostat wired up to setup their lock, their other things. No matter how easy you make it, it's their A service's network or ecosystem that makes this really inexpensive to get you up and running to the dream house. So those are three things that you'll see this year in, I think, pretty big numbers from all of us. I'd be surprised if not. Is there an organization you can point us to? I think there was one that announced here last year. I forget the acronym that is IoT, consumer IoT clearing house, where you're all working together, is there that kind of collaboration in the industry yet, or are we still looking for that sort of an overview group? Like we have the CTA generally for consumer electronics, is there anything for smart home IoT? Where standards are being pulled together, best practices. [UNKNOWN] [LAUGH] All these things talking to each other, but [UNKNOWN]. We are still a ways away from you have these competing standards of different sorts. You have weave, which is technically promising, but Ways to go and you have these waiting standards like CES waves that's being so on, you have proprietary things that others have done. And these are still [UNKNOWN]. You have seen some movements towards like [UNKNOWN] and OCF, the number of big players gathering together but We're still aways. Like I don't, at the end of this year, we're not gonna be in a place where- For me I don't anticipate we're ever gonna get in a purer world. It's gonna be heterogeneous the whole way. Maybe we'll agree upon some important things. At least it will be a few But the experience that we create for a consumer has to abstract our complexity away. Right. And that's a big part of what we're focusing on with Alexa. Yeah, yeah, so let me ask you this about, from the connectivity standards that we're talking about. Let's talk about the other layer on top of that, which is data sharing. You can all learn to work together in terms of protocols. Right. And such and security and radio standards. But isn't there a need for web-like data sharing for all of your services and products to be their best? Which I don't detect is the case right now. Where you're all sharing, or at least making my data available equally to all of you, no most favored nation. So the data that comes off my Google product is equally available to anything from a SmartThings module. I'd say, I mean I'd say it's not quite there yet but in this comment of the tide moving in the right direction, it feels that way. Similar to security, our first principle is consumers first, they own their data. How do you put them in charge, so that they could offer their data, regardless of the underlying product that they're using to another service provider or to another controlling Provider of so on, and it's a journey but philosophically that's where we are. Yeah, I think steps are being taken, I mean like you'd mentioned, there are certain steps we're trying to teach and normalize, how devices can talk to each other, I think the first step is can you even talk in a common language, if you wanna do data sharing? And so we need to move as an industry to get a better, get a model for how the langauge between different devices can be normalized in a way that different devices can talk to each other, in which case then you can actually share data in real comprehensive ways. Yeah. So I think those are all steps. I think that those are things that we have to work on in 2017 in addition to bringing down the costs and kind getting much wider deployment to smart capabilities across appliances and devices. And I do think in 2016 what we learned was beyond the RF layer, the [UNKNOWN] layers going on up, IP became the common language. All of our systems talk to each other in the cloud, right? And we've found that talking IP in the cloud has become the way For these devices and systems to talk to each other. And it's coming together really well. I feel the language layer is pretty well coming along, the proprietary data sharing maybe needs more work. The [CROSSTALK] could be standardized, I don't think the language layer is actually standardized right now. Okay. Here's what I think you'll see if we're all committed to the complexity will not be foisted on the consumer. These things will work together. You guys are wiling to shoulder the burden of the complexity, to shield it. Amen. We all know that's important. That's universal but still the lingua franca still doesn't exist you know. All right. IT doesn't quite cover it for these things but it's getting In, in you know, Google software stack, and you have Silicon, Samsung, that's trying to approach in different ways. I only have time for a few questions in the audience. So we have microphones on the floor. On the wings, wear the microphones. Said it's one microphone, that stand right in the middle of room. Very convenient. So, let's see who wants to get to a microphone we have four of the Best Minds and Smart Homes. Do you have a question on the Smart Homes. You don't ask it now, there is no better time to ask it. So I think we have someone at the microphone now and please tell us who you are who you're affiliated with and what's your question? Go ahead. My name is Jeff Orgelle i'm from St. Louis I'm a technologist and I'm affiliated with With myself and all my users.>> [LAUGH] I very much appreciate what you all are discussing. And I think there were some interesting points made regarding the fact that there's always a chase on between exploitation and securing that exploit. I don't think as you mentioned that it's every going to go away. And I also believe that it's pretty evident that the technological landscapes sorta magnifies the real world. So whereas an individual in their home May not have all the surveillance to see what's going on in this and that. As an individual in their home, they do have a locked door. And they know the limit of the exploit. There aren't going to be 10,000 people standing outside their door, trying to find their checkbook. So as you deploy more and more of this equipment into these life spaces, to me it almost feels like you're adding dry grass to a possible brush fire, not to say that it isn't a benefit somewhere out there. But how do you keep that fuel of all this equipment out there, all of these layers, all of this [BLANK_AUDIO] Attack surface, how do you win that race? And the people overall are seeing this happen at very significant, very protected environments, whether it's banking or government or whatever. And then, you kind of encourage them to put equipment in their home that then allows not the one person to try and get in, but allows maybe hundreds of thousands of people to have a go at it. So->> Okay. So if you take what you're bringing out there is that there's a lot of complexity and that makes things dangerous. Like it's, I mean, it's, we can all talk to it. That stuff we talked to you before. It's that we take it very seriously. It's a philosophy, security from the very beginning. It's working together to ensure that technology has Checkpoints within it in its design that are designed to be as secure as possible. And I think it's process and communications between us to do things like the certification programs where we're really validating with experts that the attack surface, the vectors are as minimized as possible, so you know. In our world right now when you Interact with the skill that's going to do something, that's going to invoke an action in a smart home device. The smart home scale just gets directed to do something, it has no access to a person's information. And we secure the person's information from Indiana. So the attach surface might be larger but really with our implementation right now, you're not You're not seeing anything related to the person you're seeing a directive that said turn the... if you saw anything. So we secure the people's data. Yeah, I think it's minimizing the attack services in general will kind of [UNKNOWN] compromised. I think that our, I think you also brought up the point earlier, I think we do as we apply machine learning To making the services better and experiences better, we can also do it for making the security better, right? And that's fundamental to the story. Fraud detection and financial tracking is a good proxy, right? That's exactly right. So devices should be able to detect their own vulnerabilities with each other and use that as ways to actually prevent, minimize the attack services as well. But there's no doubt, look more devices does mean more services that people can attack and that's why fundamentally we had to have security built in from the ground up. And make sure that either the data is being protected in the right way or we have a mechanism to protect the overall device interactions with each other. Let's go to our next questions. We can get one or two more in here. Your name, your affiliation and what would you like to ask the panel? It's me. Carly Chaikin. It's Carly! Carly has a question. I couldn't see you in the shadows. You could have come on up, you're friends, you're family. [LAUGH] I have a question. With security one of the things is how with the locks how easily Hackable that stuff is. And I feel like it's less secure. But then at the same time, I feel like there's so many opportunities of using a smart home for security of people breaking in. Of having video or detection or all that. But then on the other hand, with even Alexa right now or iPhones about getting that information Of what the police or someone wants to come in and go "we want to see that video to find out who it is." Like, that will balance its security in that way. But I also didn't, I don't know how much of, what they're doing is in regards to that as opposed to more so turning the lights on and air conditioning. That's a really good question. Amazon's been in the news about this Pardon me? Discoverability questions. THe murder case that went in the press this week. And which you guys had the right response to. I didn't hear about that. [LAUGH] Like a Mr. Robot episode all of a sudden. Yeah. What's the question? The question is, with all of these devices. We're listening to this all the time and providing the surveillance that we're asking them to provide, essentially. Does that add a layer of [UNKNOWN] information security concern especially when it comes to law enforcement and you know, nefarious bodies just cervically, potentially? I'll talk about our equipment in particular. Echo is doing what's called key word spotting, it's just listening for Alexa. And it's not really storing anything on that device. Everything gets streamed to the Cloud, gets processed. And there's no permanent storage on an Echo. So, it's not as though you could be compelled to give anything from that device. So, I was more interested frankly, in what Jason has to say about this. Given he has door locks. Are there discoverable records generated by your door lock? Either maybe in a Cloud I assumed? Maybe on the device? You know, all it comes down how you architect the system right. And so, when we tought through the actual activities, we thought well, you know, as an owner, you wanna see what is happening with you home. You wanna see the comings and goings and so, you keep that locally on the phone Right. Back to the security of, can you breach an August lock, right? And so back to architecture. Our servers, if it was ever compromised. And you got the giant bucket of keys so to speak, right. Well, you wouldn't know where to put them. Because there's no association of the key with lock. We literally have no idea where our locks are. There is no database of that. And then lastly of course, when it comes to locks, smart locks, in case you're a little worried about it, the truth is as much as their is amazing hackers out there that can do great things like Carly's character, The truth is, throwing a brick through a window is a lot easier and faster to break into homes. [LAUGH] Yeah, let's not lose track of the fact that a wooden door frame is easy to get through. Don't spend too much time on the lock. Just kick it in for crying out loud. I wished we had more time. We can do hours with this gang. Please thank, join us in thanking Tremendous panel on smart home technology here. Jason Johnson from August. Alex [UNKNOWN] from Smart Things. Mike George from Amazon. And [UNKNOWN] Sandra from Google Home. And of course, our special guest. We're really honored to have probably taken with us today from Mr. Robot. Thank you everybody.

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