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Say goodbye to the connected device price gap. Adding connectivity will soon cost $5

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When it comes to connectivity, it’s clear that people want it and you can build some really cool stuff with connected devices. But right now consumers pay a pretty penny for the extra radios and microcontrollers associated with hooking a door lock, a thermostat or a lightbulb up to a network. The starter set of the Hue lightbulbs costs $200 for example. The connected version of my door lock added $100 to the overall price. And the Nest thermostat is a pocket-draining $250.

Are these devices worth it? I’ve written how I decide whether connectivity justifies the price, but in this week’s podcast Ayla Networks co-founder and CEO David Friedman argues that the cost divide between “smart” and dumb devices will shrink in the next few years, with it costing about $5 to add connectivity to things.

And at that point there’s no reason why you might not have a connected microwave or smoke detector. But not all of this connectivity will serve the consumer. In the case of appliances they might be used by the manufactures for software updates, diagnostics (we’ve talked about this on previous shows) and perhaps to sell you services. So a connected fridge might not buy your groceries but it would offer to ship a replacement water filter to your door, when it sensed yours was past its prime.

(Download this episode)

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Show notes:
Host: Stacey Higginbotham
Guest: David Friedman, CEO of Ayla Networks

  • Why the world needs yet another platform for connected devices.
  • Big companies are intrigued by the internet of things, so what departments are trying to push the envelope?
  • That high price tag associated with connected devices should shrink in the next few years.
  • When our devices are connected, should we fear for our privacy?


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3 Responses to “Say goodbye to the connected device price gap. Adding connectivity will soon cost $5”

  1. Scott Jenson

    This was an excellent, excellent podcast. Thanks for the great questions. A few comments:
    1) Smart devices can’t all have their own app, that just can’t scale. What if you buy two different smoke detectors, two apps? I buy the scenario, but not the solution. We need something much simpler are more universal.

    2) The scenarios that will actually first take off are likely much more mundane that we’d like to admit. The point you made about maintenance or improved product design (metrics) are excellent and likely first scenarios

    3) The costs will come down very quickly, so that won’t really be the limiting factor. The more human connection/setup costs will start to be more critical.

    I’ve written about this for OMs Roadmap book, this is a hot space that is more about understanding *where* we want to go, rather than the potential that we can go there. Keep up the great work!

  2. Sounds like a good solution for the high bandwidth home appliances. The majority of connected objects (80%) will however be low throughput and it is not always ideal to rely on WiFis (cannot control the connectivity and only works when in proximity of the gateway). At SIGFOX we focus on the low throughput objects for which we provide out-of-the-box connectivity (no need for local WiFi) at even lower costs than $5.

    Ayla should maybe also interface with SIGFOX :-)

    More info: