Part 1: Hacking Connected Homes – Top Risks to Consumer Tech Companies

Megan Kessler

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Image by Homesecuritysystems used under CC license.

If you are like one-third of Americans, you expect that fully Connected Homes will come online before the end of this year – and you’re jazzed about it!

According to a recent study by ThroughTek, 60 percent of Americans intend to adopt Connected Home technologies in the next five years, which shouldn’t be surprising considering that this category is expected to drive $61 billion in revenue by the end of  2015.  What’s more, growth in sales of connected home devices is expected to eclipse that of smartphone and tablets over the next five years, hitting 1.8 billion units shipped by 2019, according to BI Intelligence.

The emerging market opportunity for fast-moving, forward-thinking consumer technology companies is undeniable, but the Connected Homes category is not without risks. Aspiring consumer tech companies would be wise to heed a few key consumer trends that are driving media coverage of this growth sector:

Internet security

According to ThroughTek, 27 percent of Americans are still anxious that IoT devices lack security controls for their personal data–as they should be.  We have all seen reports and demonstrations detailing just how easy it is for would-be hackers to break into smart cars, smart TVs, smart security systems – the list goes on. There are white hat hacking groups dedicated to finding vulnerabilities in IoT devices – Ken Munro and his team at Pen Test Partners, for example, have even hacked into a Wi-Fi kettle, showcasing how it can be used to track, attack and take over a home network.  The reality is that as new Connected Home devices come online at record speeds, many are going to market before they’ve been thoroughly vetted for security vulnerabilities. Consumer tech companies will surely find themselves in the spotlight, as new risks are identified by third parties and revealed through the media.

Consumer privacy

Beyond security considerations are consumer privacy concerns. Following a spate of privacy-related revelations – from Snowden’s admissions to Facebook’s ever-changing data policies – consumers are up in arms about how much of their personal information is being sold to the highest bidder.  Just as social media, marketing and adtech companies have had to develop detailed policies and communications around how they handle consumer data, manufacturers of Connected Homes devices will need to navigate similar situations – or else. The initial negativity surrounding the launch of Amazon’s Echo (the company’s answer to Apple’s Siri) offers a perfect example of what can happen when overzealous tech companies don’t address privacy risks prior to launch. To quote The Washington Post the product is “either amazing or horrifying. On one hand, the tech giant has brought us one step closer to all-knowing, ever-helpful home assistant…On the other, it's a product that records snippets of what you say in the privacy of your home and stores it on Amazon's servers.” It’s safe to say that no consumer tech company wants their latest gadget to be described as “horrifying”– but most are at risk, if they aren’t taking the right precautions in the privacy department. To add fuel to this fire during the launch phase, when media asked Amazon what they were planning on using the recorded information for the company “did not immediately respond to a request for comment on this point.

If manufacturers of Connected Homes devices want to protect themselves from becoming the focus of negative reviews like Echo’s above, then ‘no comment’ won’t cut it. What will?  Stay tuned for part two of our Hacking Connected Homes series for crisis communications tips and tricks.

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