Frontiers

The Internet of (Wonderful and Scary) Things

How cybersecurity can affect the market for smart products.

Mohammad Jalali Reading Time: 6 min 

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An MIT SMR initiative exploring how technology is reshaping the practice of management.
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Smart devices, once relegated to science fiction and our imaginations, are now ubiquitous. Today, there’s a market for everything from a Wi-Fi connected refrigerator to a voice-operated speaker that doubles as a personal assistant. The internet of things (IoT) — the software-operated network of physical devices, appliances, vehicles — grows day by day as these devices become part of our daily lives. A March 2018 survey found that 22% of Americans used IoT appliances in their homes, and this trend is widespread across the globe. Amazon recently announced a plan to expand Amazon Echo services to Italy and Spain.

For consumers, the concept of easily operated, highly adaptable products is great. Smart devices are convenient, useful, and fun. However, many people remain skeptical or anxious about this level of connectivity. News of products leaking private information or being remotely hacked has led customers to fear for their personal safety and reconsider hooking up physical appliances to vulnerable networks.

Considering the relative infancy of many IoT markets and the growing demand for cheap and accessible IoT products, this is a critical stage for IoT businesses. Manufacturers will have to make decisions about how to best deal with cybersecurity. For some IoT developers, that may mean choosing between product usability and product security.

Prioritizing Product Security

Businesses frequently fail to consider that the incentive for product security can have more to do with marketability than integrity. Just look at the saga of the My Friend Cayla doll. Developed by the U.S.-based manufacturer Genesis, this children’s toy used speech-recognition technology to engage in personalized conversations with kids. The doll experienced high demand in 2015 and 2016 — until the public discovered that My Friend Cayla offered a prime target for hackers.

Germany’s Federal Network Agency found that an unsecured Bluetooth device in the doll, which collected and transmitted all audio to a U.S.-based voice-recognition company, exposed the doll’s data. Independent and possibly malicious hackers could not only access private voice data, but also potentially speak to children through the doll.

The My Friend Cayla doll was officially banned in Germany in early 2017, and officials advised parents to trash the doll and destroy its internal microphone. In the U.S., consumer watchdog groups and legislators demanded that the dolls be pulled from shelves for violating laws protecting child privacy. Sales promptly fizzled.

Topics

Frontiers

An MIT SMR initiative exploring how technology is reshaping the practice of management.
More in this series

About the Author

Mohammad Jalali is a research affiliate at MIT Sloan School of Management and an assistant professor at Harvard Medical School. He tweets @msjalali.

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Comments (2)
Carlos Ramirez
A compelling piece, Mohammad! I wholeheartedly agree with the emphasis on cybersecurity for IoT products. As we progress towards a more connected world, it's critical that developers prioritize security, even at the expense of other features or immediate cost savings.

The story of the "My Friend Cayla" doll is indeed a stark reminder of the potential risks that come with the immense benefits of IoT. It's essential for IoT developers to anticipate and mitigate these risks from the get-go. This not only safeguards the end-users but also secures the longevity and reputation of their products in the market.

A further point to consider is the role of standardization in IoT security. The lack of widely accepted standards is indeed a double-edged sword. It allows for innovation and differentiation, yet it also makes it difficult to ensure consistent security measures across the board. The development and adoption of comprehensive security standards would, in my opinion, greatly bolster the overall security posture of the IoT ecosystem.

I hope you find it ok, I am adding the link to my new website about IoT Applications, where you, and your readers can further explore the exciting and challenging world of IoT applications and their implications: . It offers insightful analyses and discussions around various IoT applications and their impact on our daily lives. Please if this is not allowed, I apologise.

We are at the precipice of a technological revolution, and it's exciting to see the myriad ways IoT is reshaping our lives. However, the importance of cybersecurity cannot be overstated. Let's ensure a secure and reliable IoT future!
cassidy luoi
Privacy will never be the same again.