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Connected Homes May 2018 Viewpoints

Technology Analyst: Michael Gold

Network-Security Appliances

Why is this topic significant?

Households can install various appliances that aim to protect against cyberattacks, with help from cloud-based managed services.

Description

Computers, smartphones, and tablets can run antivirus and other cybersecurity software, but many other types of hardware cannot. Dedicated network appliances and bundled cloud services aim to prevent intrusions and exploitation of all connected things within a home network. Among such offerings, firewalls are the ones that have seen the most vendor activity, with suppliers including Bitdefender, BullGuard, Cujo, F-Secure, IoT Defense, and Symantec (which sells Norton-branded products). When properly configured, firewalls can stop unwanted incoming traffic from reaching all devices that depend on Wi-Fi and Ethernet connections. Firewalls likewise can prevent devices in homes from transmitting sensitive data.

Configuration can involve creating rules—for example, allowing a security camera to upload data only to a designated video-storage service. Suppliers aim to simplify configuration and are constantly updating the managed services that come bundled with firewall appliances, much as antivirus software sees frequent updates. Some suppliers claim or imply they use machine learning to recognize typical household behaviors and intervene if a traffic pattern is unusual.

Similar filtering is at the heart of parental controls, so some of the products also give parents the ability to (for example) shut down gaming after hours. Disney sells Circle—a firewall-like product that is mainly for families with young children (motivated teenagers seem likely to be able to bypass Circle). Another product, from Trend Micro, provides parental controls and limited firewall-like capabilities, and the company also offers similar capabilities for users of certain routers from Asus and TP-Link.

As a firewall evaluates traffic, throughput can suffer. Also, when a firewall sees unusual activity, it may request that the user intervene. Users who frequently try new connected products and explore those products' capabilities can see frequent interruptions. Users might see fewer impairments and demands by using an alternative to a firewall. Fing sells a dedicated device and companion monitoring service that alerts users about unwanted network activity. Another start-up, HighIoT, aims to deliver a similar solution. Yet another device, from Keezel, can route Wi-Fi traffic to and from a virtual-private-network (VPN) service. With such services, incoming and outgoing messages are encrypted, preventing a wide range of attacks.

Implications

Appliances for network security may seem redundant with other solutions such as antivirus software. They do not protect against attacks on cable and DSL modems or attacks over smartphones' cellular connections. Even so, security appliances promise to prevent adversaries from exploiting a home's connected things such as lights, cameras, door locks, and so on. A combination of increased use of connected devices plus increased cybersecurity risks could eventually transform home firewall and VPN appliances from their current status as niche products to become much more common.

Impacts/Disruptions

People who want to secure networks that include many connected things and who also use demanding applications (multiplayer computer games and 4K-resolution video streaming) may need high-performance dedicated firewalls. However, some may feel they already have too many appliances in their households devoted to the mechanical aspects of networking—a broadband modem, Wi-Fi access point, network extender, mesh-network controller such as SmartThings, and more. Future versions of such devices could have additional software-defined functions, enabling potential aftermarket sales of cloud-based managed services for firewall, monitoring, and VPN capabilities. Alternatively, broadband-service providers may develop managed firewall and monitoring services.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Low to Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 5 Years

Opportunities in the following industry areas:

Electronics manufacturers, retailers, broadband-access services, cloud services, physical-security services

Relevant to the following Explorer Technology Areas:

Nintendo's Home-Gaming Evolution

By Sean R. Barulich
Barulich is a senior research analyst with Strategic Business Insights.

Why is this topic significant?

The Nintendo Switch—Nintendo's new portable-console hybrid—has been very successful. Nintendo's success with the Switch provides insight into home gaming, the importance of popular intellectual property, and creative console design.

Description

The Nintendo Switch recently broke the record for the fastest-selling video-game console. Nintendo sold 4.8 million consoles in only ten months, beating the previous record, held by Nintendo's Wii game console, from 2006. Analysts attribute the Switch's success largely to its collection of well-known video-game intellectual property (IP) and the unique hybrid functionality of the console. The hybrid nature of the Switch allows owners not only to use the Switch as a portable gaming device but also to connect the system to a TV through a docking station.

Nintendo is finding new ways to build on the success of the Switch. For example, Nintendo recently released the Nintendo Labo platform, which is a series of cardboard building kits that work with the Switch and expand its functionality. The cardboard kits rely on the hardware and sensors built into the Switch's Joy-Con controllers and allow users to build interactive cardboard toys and games. Nintendo Labo is expanding what users can do with the console beyond traditional gaming.

Nintendo is also taking other steps to improve the value of the console. For example, the company is partnering with small independent developers to bring their games to the console. The Switch's portability and streamlined development platform have helped attract numerous independent developers. In addition, Nintendo has committed to releasing new games for the console through its online digital shop every week. The company is also working with Scrum Ventures to find start-ups to develop accessories and novel experiences that work with the Switch's modular design.

Implications

Nintendo continues to demonstrate that a relatively underpowered game console can be successful by relying on popular IP and creative hardware. Although the Nintendo Switch has so far been successful, Nintendo has neglected some features that users typically expect in modern game consoles. For example, Nintendo has lagged behind in bringing media apps such as Netflix and Spotify to the Switch. Although Nintendo brought the Hulu streaming app to the Switch in November 2017, there has been no confirmed information about other third-party media apps. Additionally, Nintendo allows users to save game data to the system's internal storage only, instead of a removable storage medium or the cloud.

Impacts/Disruptions

At first glance, observers may presume that Nintendo's primary market is individuals 18 years old and younger, but Nintendo's own survey of US Nintendo accounts indicates that only 17% of the Nintendo Switch's primary users fall within that age group. In addition, Nintendo's statistics suggest that the Nintendo Switch has been most popular with people ages 19 to 34, which make up roughly 60% of Nintendo Switch users. These data suggest an uncertain future for home gaming consoles among younger gamers, who may ultimately prefer mobile games. Nintendo's business strategy appears to indicate that the company is aware of this trend because it has invested money in various mobile games such as Pokémon Go and Super Mario Run. The next generation of gamers may feel that powerful smartphones—with access to various free-to-play and paid games—are more valuable than traditional consoles.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now

Opportunities in the following industry areas:

Home-console gaming, portable devices, software development, electronics manufacturing

Relevant to the following Explorer Technology Areas: