The Trouble With the Internet of Things

The Internet of Things (IoT) is the fascinating and (potentially) fast-approaching addition of Internet connectivity to just about everything. From your blinds opening for you as you get out of bed to your fridge telling you you're low on milk. The Nest thermostat is one of the first highly successful IoT devices and it has shown how great the potential is in this space.

So what's the trouble?

In short: data and money, but let's break that down.

Data

The beauty of the IoT movement is that devices become intelligent. They learn patterns, they know where you are, then know when you're likely to be somewhere or do something. Simply put, they know you. They learn, adapt, adjust, and fine tune themselves to maximize your utility from them. All of this requires data analysis, pattern recognition, and storing said data. Furthermore, as smaller devices get connected and the analysis gets more computationally complex, the more we'll see the processing offloaded to the cloud.

If the processing is in the cloud, the data is in the cloud. There's no avoiding it. That means your location patterns, your arrival and departure times from home/work/activities, your grocery lists (do you want a big pharma company knowing your exact diet to target ads for a new cholesterol medication?), your sleep patterns, your hygiene patterns, everything about you is captured as data. The products are infinitely less valuable without this data, yet the realization of just transferring it over the internet to a large company is unnerving to potential users.

There is an opportunity here, of course. What if you had a central hub within the home capable of the processing one might need? No data needs to go offsite, it could all be local and secure, and it has the added benefit of working when the internet is out.

There are a few problems with this though (not to say they can't be tackled). The two biggest are a lack of standardization and cost. Without standardization, your "hub" will only work for the products from that one brand (or a limited group of partnered brands). Multiple hubs would increase price, so that doesn't seem like a good option, but if we desire standardization who drives that? It sounds like IIC could be the solution to that, so stay tuned for updates from them.

That brings us to the next point.

Money

In the age of the Internet we've all gotten used to getting things for "free." Sure, nothing is actually free, but the psychology of it is such that most people basically consider it free. There is no question that people are willing to pay for products and services that add value to their lives, premium versions of Evernote, Dropbox, Spotify, and many others are all great examples of that.

Each of these examples provides a free tier though. The sample of their service, in many cases a very generous sample, is so generous that many users will never upgrade to a paid tier. The nature of the IoT is that the value-add over time increases, and it increases after you've purchased and are using the products. I don't know if a "60 day in home trial" will be the solution, but somehow there will have to be a very clear way of showing users that these products add value to their lives to warrant the monetary (and perhaps privacy) costs. Early adopters and tech writers won't be able to sway the masses easily.

Without a very clear understanding for the value that could be added and a longing for that value, it will be a hard sell for newcomers to spend several hundred dollars on a hub plus any number of add-ons to connect the appliances, products, and rooms of their choice. There is a very high barrier to entry if the added value isn't obvious.

So how do you get over this hurdle? Well the most obvious is free hardware with service tiers - free to start, free features plus paid features, free under a certain usage level, who knows? As mentioned before though, nothing is actually free. There is no way a company will give away hardware if they're not getting the data. And if they're getting the data, you can count on them monetizing it if they have costs to recoup from the hardware. This problem circles back to the data section above and will be a challenge to solve.

Closing Thoughts

It seems likely we'll see both solutions. A "free" option for those who want free and a paid option for those who want privacy and are willing to pay for it. With any luck the IIC standardization will allow those two types of products to communicate with one another, but who knows.

There are plenty of arguments that we don't really need any of this, and it is true that some of the IoT applications are a little bit far fetched. Yet if there is substantial added value from connecting something to the internet, and I believe in many cases there is, then this revolution will happen whether or not everyone is on board. There is just the <sarcasm> small matter </sarcasm> of the user's privacy and their money.

Excluding Part of OS X Package from Backblaze and Time Machine Backups to Save Tens/Hundreds of GB

Time Machine and Backblaze team up to make a really robust backup configuration for any Mac user. They offer features to exclude particular directories from the backups, but what happens when those directories are inside of a "package" such as your iMovie or iPhoto library? If you use the UI to do this, you'll never be able to omit a subdirectory of a package, but luckily  there is a very easy solution.

The Problem

Working with iMovie lately I've realized that it tends to keep a lot of high quality render files around. There is no way to limit them, and they're totally safe to delete. In my case, I'm generating 50-75GB of these files per hour I edit video, that's a problem on my little 500GB SSD. I periodically delete them, but I've noticed that my Time Machine and Backblaze backups have been churning a lot lately, and these high quality renders are the reason.

The Solution

The solution is easy. We'll cover how to do this in Time Machine, it is done in Backblaze in the exact same way. This works for any package content, in this example we'll use the iMovie High Quality Media directory we've been covering.

If you use iMovie, click on your iMovie Library and select "Show Package Contents". Then navigate (per project) to <project>/Render Files/High Quality Media. 

Open your System Preferences, select Time Machine, select Options, click the plus sign to add a directory. Navigate to the location of your iMove Library and you'll notice that it is a package, not a directory (packages are really just special directories). It will look like this.

Open your Finder window just next to it, and drag and drop the "High Quality Media" directory into this exclude window; click "Save"/"Ok", that's it, you're done. You'll want to do the exact same thing for Backblaze. 

Hope this helps you as much as it has helped me!

Large Questions Loom on News of Apple's Acquisition of Beats

I wrote a piece yesterday after news broke that Apple is near closing on a deal that would make them owners of Beats for a bit of spare change, $3.2 billion. I highlighted a few reasons why this doesn't seem to add up, and those are still valid.

Reports seem to be hinting more and more strongly that this is legit, but it still isn't quite settling right for me. In one camp, you've got those that believe the headphones are the primary driver for the deal (Ben Thompson for one). In another (perhaps larger) camp, you've got those that think it is for the music streaming service.

Both of these are valid thoughts, but both have major hurdles. It would make sense that the purchase is likely to be for both products, if it is real at all, otherwise they'd spin off (or not sell) the other half I would think. Tough to say for sure.

Headphones

If the deal is primarily for the headphones, the biggest problem I see is the brand. The Beats brand is valuable as a brand. People know it, people love it, and people are willing to spend a lot of money on it despite the obviously inferior sound quality. They sound "good enough" (audiophiles disagree) and look good enough that people want them. They've become an icon. You don't have that without the Beats brand, and when was the last time Apple sold their own product with any hint of any other brand on it? There is just no way you will see something like this happening...

How valuable would Beats be without the brand? If they wanted headphone technology, why not purchase Sennheiser or someone like them?

Music Streaming

So what if this deal is for the music streaming? iTunes Radio isn't exactly sweeping the industry by storm like iTunes did, so that might make sense, right? Well, maybe. The biggest concern is that the content rights that Beats managed to get that Apple hasn't managed to obtain for themselves aren't transferable (most likely) in the event of an acquisition. Add to that the fact that Beats Music only has around 200,000 subscribers, and you've got a much harder time justifying a $3.2 billion deal.

Video Leak

This morning, a video was posted on Facebook by Dre himself that "confirmed the deal" was happening. That makes this all seem more like a joke than anything as Apple doesn't usually stand for that kind of thing. If the deal was happening, I'd think such a slip up could certainly jeopardize it.

Closing Thoughts

I stand by my prior conclusion, despite the fact that online news sources seem to be more convinced by the minute that this is imminent. If this deal is real, there's a major piece we're all missing. Otherwise, I just don't see the value in it for Apple.

Doesn't Add Up: Rumors of Apple Purchasing Beats

As reported by the Financial Times (subscription required; MacRumors link for those without) Apple is allegedly in talks to purchase Beats for $3.2 billion. Beats makes headphones and recently launched a music service to go head-to-head with Spotify.

Apple could use some help with iTunes Radio, though for those simply looking for radio it isn't too shabby; Apple certainly loves nice hardware and hardware design and it is no secret that Apple's EarPods, though improved, could stand to be improved upon. However, this still doesn't add up. It isn't the money, it's the principle. 

They don't need the design ability. They aren't going to pay $3.2 billion for the streaming music service side of it and shut down the headphone business, though I suppose they could sell it (or only buy the streaming music part to begin with). The headphones that Beats makes are good, but nowhere near great, and they're extremely expensive.

Something is missing from the equation.

Apple has plenty of engineering talent to make better sounding headphones. Apple has plenty of design talent to run circles around Beats. Apple has plenty of engineering talent, or could at least purchase it, to improve iTunes Radio to go legitimately compete with Spotify and Beats. Sure an acquisition could jump start any of these initiatives, but a smaller and lower profile purchase, or series of purchases, would do the job nicely.

There is either more to this than we're all seeing or imagining, which is often the case with Apple, or this is completely bogus. Both of these seem quite plausible, I guess only time will tell. 

Why Apple, Despite Low Profit Opportunity, Might Announce Mobile Payments at WWDC 2014

The first, and by far the strongest, reason that Apple might not be in a rush to deploy a mobile payment/wallet solution is that the margins are extremely low. They're even lower if you're paying with a credit card since those companies already take a cut.

Google Wallet hasn't exactly taken off. Square is growing in larger cities, but it is far from ubiquitous. So why would Apple bother? If there isn't much money to be made and previous attempts are less than successful, what's to be gained?

Apple's strategies rely heavily on their ecosystem and stickiness to that ecosystem. Getting users into the walled garden, then keeping them there, is the Apple way. The other fundamental technique that Apple uses is to quietly and slowly introduce infrastructure or software or something subtle that no one pays much attention to, then a few years later - BOOM - it is the foundation of something big.

It worked with iTunes for the iPod, iPhone, App Store, and eventually the iPad. Once those credit cards were on file sales in the ecosystem kept growing, which grew the ecosystem, which sold more devices. Those successes have driven other parts of the business too as Mac sales continue to grow.

I think they began the next phase years ago. People noticed when they added Bluetooth LE (low energy) to the iPhone 4S in 2011, but it didn't make too many waves. Only the geeks noticed when iBeacon (BTLE) support was announced in iOS 7; sure the MLB is adopting it, but it isn't a household name. People noticed when they added TouchID to the iPhone 5s in 2013, and that one made waves but some argued it wasn't exactly profound.

What happens when you combine all of these though? You've got hundreds of millions of phones that already support BTLE. You've got an ultra-cheap infrastructure piece (iBeacon transceivers) that can very easily be deployed, or has been already. You've got 800 million credit cards already on file, and you've got lights-out security to authorize payments with TouchID. Suddenly a lot of the major problems have been solved.

Adoption is much less of an issue because the products that people already own will support it, they're already being used 24/7, and their credit card information is already plugged in. There is a level of trust with Apple that is higher than many other technology companies because Apple doesn't profit off of user data, in fact they profit off of NOT profiting off of user data. The same can't be said for all of the other players in this product segment.

The biggest speed bump here is that while phones as old as the 4S support BTLE, only the 5S (and presumably upcoming 6/6c) has TouchID. It isn't clear if they'd only roll out mobile payments to this latest set of hardware, or if they'd just require password authentication for older devices. However, I think their user-base (either way) is large enough that 2014 could be the year.

There is, without a doubt in my mind, no one better positioned than Apple to release a mobile payment solution that will finally break through.

Oh, and I'd say this meet's Tim Cook's "new product segments" promise, wouldn't you?