Why smart home hardware is a difficult business

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        Trying to build a business selling connected consumer devices is fraught with uncertainty, according to the SEC filings from Sonos and Arlo detailing their attempts to sell an initial public offering. Digging through their respective S-1 filings makes an observer instantly aware of two things: One, that few of the choices available when it comes to building a connected home product are risk-free; and two, that consumers are sure to have those risks passed onto them.

        Why would anyone buy an Alexa-enabled product if that functionality might one day disappear?
        And yet, these things do happen. One only has to look at the disappearance of Nest gear from Amazon’s web site or the impossibility of finding Apple products at Amazon. A solution to this potential setback for businesses and consumers would be to have a data schema for all devices, an open standard. In this case, the standard could articulate what the device does along with some basic functions. With this mapped out, anyone could come along and build a voice assistant without having to spend time also developing device profiles.
        So if Alexa pulled out, Sonos could at least introduce another digital assistant to the mix without having to embark on crazy partnerships and a year-long development process. And for consumers, the Sonos risk related to Alexa is a reminder that these devices don’t have hardened functionality, and it’s completely possible that the reason you purchased the product might be here one day and gone the next.

        While the risk of Amazon cutting off Sonos is unlikely, the Arlo S-1 filing has a more chilling risk. Arlo makes connected cameras, lights, and security products, and hosts the data from these products on Amazon’s cloud. It notes that thanks to Amazon buying Blink and Ring, it is now an Amazon competitor, which may pose risks later on. Several retailers are trying to reduce their reliance on Amazon’s cloud, as have logistics companies. As Amazon wades more deeply into the smart home it may make sense for rivals to take their business elsewhere — or at least make sure they are ready to do so.

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