IoT & Connected Devices — 2018 Predictions and Outcomes
Year three. The category is settling into adolescence — fewer surprises, more compounding. Predictions get more boring and more accurate at the same time.
How 2017 actually played out
HomePod slipped past Christmas, exactly as called. Apple announced it at WWDC June 2017, promised "December," then in November pushed it to early 2018 — it still isn't on shelves as I write this. The slip is even worse than the December-to-January bet I made. Hit.
AirPods became Apple's secret weapon. Q4 2017 run-rate cleared $1B easily. Production constraints eased through the year. Best Apple launch of the decade by quiet revenue. Big hit.
Smart displays became a category. Echo Show shipped June 2017, Echo Spot followed in December. Google's answer didn't land in 2017 — no first-party display, and the partner hardware (Lenovo, JBL, LG) is only now leaking ahead of the spring — so the "Google answers in 2017" call slipped. Hit on the category, miss on the Google timing.
Apple Watch Series 3 with LTE shipped, activation was a mess. September 2017 launch, carriers initially refused to honor activation in many regions, eSIM provisioning broke for thousands of customers. Sales rebounded once carriers fixed it in Q4. Hit, including the predicted carrier debacle.
Ring as an acquisition target. I called Ring getting bought in 2017; no deal closed inside the year. But the chatter is loud — Ring raised again in Q4, and the doorbell category is exactly the kind of thing one of the platform giants swallows. Right in shape, wrong on the calendar so far. Half-hit until a deal actually prints.
Camera consolidation happened. Nest, Arlo (Netgear spun it off in early 2017), and the rest of the doorbell/camera field tightened fast around a few names. Everyone outside the leaders (Canary, etc.) limped. Hit.
Bluetooth Mesh spec shipped, no consumer products. The spec dropped July 2017. Zero meaningful consumer rollout. Hit on the prediction (spec yes, products no).
First "device end-of-life" moment. Logitech told Harmony Link owners in November that the hub would stop working in the spring — a paid-for device with a scheduled brick date — but Lowe's Iris and a couple of other 2014-era hubs had already gone dark earlier. Logitech was the noisiest, not the first. Half-hit — the prediction was right in shape, slightly wrong on which company would draw the heat.
Net 2017 scorecard: roughly 88% prediction accuracy. The platform consolidation makes calls easier. Watch this number trend up as the category stabilizes.
What I got wrong
I underestimated the Google Home Mini's distribution power. $29 with Google's bundling muscle put a Mini in millions of US homes in Q4 2017 alone. The "Echo wins the home" framing needs a sub-clause: Echo wins, but Google Home is closer than I called.
I also missed how badly the content side of Apple Watch would lag. Apple Music + Apple Podcasts on the Watch in 2017 was rough; Spotify support didn't ship until November. The platform underbuilt its own watchOS apps.
2018 predictions
1. Google ships its own smart display. A first-party Google smart display lands this year, most likely in the fall hardware window. The partner-display strategy (Lenovo, JBL) gives Google a foothold, but Google will want first-party hardware to set the bar.
2. Apple's HomePod fails commercially in year one. Strong reviews on sound, but Siri's voice-assistant gap, the $349 price, and the "only works with Apple Music initially" footgun ship under 4M units. Apple will frame this as success; the units tell the real story.
3. Mesh wifi becomes table stakes. Eero, Google WiFi, Netgear Orbi, Linksys Velop, TP-Link Deco all in mass retail by mid-year. Single-router category shrinks to budget tier only.
4. Ring under Amazon becomes the doorbell standard. Expect price drops on entry-level Ring — a sub-$100 second-gen doorbell would clear most price barriers. Nest's rumored video doorbell becomes the premium competitor; together they own ~70% of the category by year-end.
5. The Apple Watch ECG finally ships. This year's Apple Watch — likely the fall model — arrives with an FDA-cleared ECG and irregular-heart-rhythm detection. Three years late vs the 2015 hype, on time vs my 2016 prediction.
6. AirPods 2 will not ship in 2018. Despite rumors. The Series 1 sells out faster than Apple can make them; no incentive to refresh until 2019.
7. The first big IoT-security scandal of the year hits in Q1. Some default-credentials baby monitor or home camera will be on the front page. (Sad easy bet.)
8. Sonos files for IPO. With Apple's HomePod legitimizing the category, Sonos's window opens. Expect Q3 filing.
Gratitude beat
Big thanks to everyone in the trenches of Bluetooth pairing UX. The fact that connecting two earbuds to a phone in 2018 actually works most of the time is a thousand-engineer accomplishment that nobody appreciates. Thank you.