Global Wi-Fi and Loose Bricks - The Battle for the Smart Home

Published by Marcio Avillez May 02, 2017

Global Wi-Fi

According to analyst firms focused on the consumer broadband space, there will soon be close to 1 billion broadband households on the planet. Many of these homes will rely on Wi-Fi to connect most of the internet enabled devices in the home.  Not surprisingly, many of the Wi-Fi routers in these homes will be supplied by the ISP that provides the broadband service.  Somewhere between 60% and 70% of the broadband homes here in North America rely on the Wi-Fi router they get from their ISP.  That number is closer to 90% in Europe and other markets outside the US.  Screen Shot 2017-05-01 at 4.22.36 PM.png

Managing the Wi-Fi router in the home is strong starting point that enables, with some innovation and investment, the companies that control that element in the broadband service delivery chain to expand into adjacent markets such as home security and smart home and connected home services.  As a matter of fact, we are seeing a number of offerings from Google, Apple and Amazon (which together with Facebook constitute the group of companies commonly known as GAFA) as well as other CE companies focused on this space.  What many of these offerings have in common is they bring into the home a new piece of hardware that is designed either to replace or to push into the background the Wi-Fi router provided by the ISP.

There is no doubt the ISPs have a strong starting position in the home, but these advantages will remain inherently latent ones if ISPs don’t take actions to capitalize on their position.  There are many well-resourced potential competitors vying for a critical role inside the home.  GAFA and other CE companies like Samsung are investing heavily to establish themselves in the broadband home.  ISPs have a natural disadvantage vis-a-vis these attackers - they are inherently regional companies competing against global businesses.  So while ISPs have a strong starting position, their role in the future of the broadband home is far from certain.  The threat to their initial, advantaged position is real.

Loose Bricks

I first came across the term “loose brick” while attending business school.  It came up in the context of a business strategy discussion.  The term was used to describe the strategy used by Japanese TV companies (such as Sony) to get a foothold in the US TV market and eventually dominate it while pushing American TV manufacturers such as RCA and Zenith completely out of the market.

The Japanese TV companies focused on a segment of the market that established TV companies saw as less valuable and less interesting - the market for black and white, small-sized portable screens. This enabled them to build the global manufacturing base that later allowed them to compete with established TV companies and win. The attackers focused on an unmet market need and delivered a solution that allowed them to win in a segment that wasn’t at the time seen as important or valuable. These underserved needs form the basis of the “loose bricks.”

Well, I see at least a couple of loose bricks that attackers can use to to elevate their role in global broadband Wi-Fi households.  I’ve written about both of these in the past:

Most homes today deal with the problem that a single Wi-Fi router does not provide adequate Wi-Fi in the home. Wi-Fi routers in homes today struggle with either handling the load of the increasing number of devices in the home or can’t cover the entire home consistently.

The other loose brick I see is a result of the proliferation of new smart-devices such as Wi-Fi cameras, IP-based video set-top boxes, smoke/CO detectors and thermostats in the modern broadband home.  These devices are difficult to connect to Wi-Fi.  Even when a user succeeds with the initial connection, it is difficult to keep them connected.  If you change your Wi-Fi network name or password (e.g. if your ISP sends you a new Wi-Fi router), these devices lose their connectivity and require the user to go through the painful process required to reconnect them, one by one.  That usually means that users have to say goodbye to their weekends when this happens.

Well, ISPs are not exactly blind to these two loose bricks.  Many are already investing in delivering improved Wi-Fi coverage to the broadband households they serve.  The efforts are mostly in the initial stages today, but expect them to pick up speed over the course of this year into 2018.  Most of the network partners I’ve spoken with have some sort of initiative underway to address what they are calling “the need for multiple APs” in a home.  This an effective way to address the Wi-Fi coverage loose brick.

That leaves the other loose brick: device onboarding and ongoing connectivity.  This is where we at Cirrent come into the equation.  Cirrent is the only company offering an ISP-friendly solution which enables ISPs to address the second loose brick - connecting smart device and ensuring that they remain connected.  Cirrent's ZipKey is a free cloud solution that ISPs can use to improve their broadband customer's experience with smart devices, by relying on the Wi-Fi router they already manage in the home.  The implementation relies on APIs and cloud-to-cloud interfaces which translate into implementations that require a small level of effort.  

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