Alex Davies – Rethink Technology Research – on DIY vs DIFM Wireless Power

31 October 2019

Alex Davies is an analyst at Rethink Technology Research and the editor of Rethink IoT. He joins The Charge Guy to discuss DIY vs DIFM wireless power, ways for service providers to protect their revenues, an aftermarket approach to wireless power and much more.

This episode was recorded on Oct 29, 2019

Yuval Boger (Chief Marketing Officer, Wi-Charge, @TheChargeGuy): Hey Alex, thanks for joining me today.

Alex Davies (analyst, Rethink Technology Research): Hi Yuval, how’s it going?

Yuval: It’s going great. So who are you and what do you do?

Alex: My name is Alex. I’m an analyst at a company called Rethink Technology Research. We’re based in Bristol in the UK and my main job is being the editor of a publication called Riot or Rethink IoT. So I like to joke that we’re an analyst house with a publishing problem. I spend most of my week writing.

Yuval: Absolutely. And so I think you’ve covered a wide range of topics, right? Smart home, IoT. I’m sure I’m missing a couple of things.

Alex: Oh, heaps. We used to write about all sorts. Self-driving cars, we definitely thought we could get the automakers buying, but that’s a very closed market. AI, blockchain, I spent a lot of time reading about blockchain, but again, I think even with the internet of things, we’re again sort of five years ahead of the curve. You know give them five years and those markets will be sort of receptive to the likes of us. But for now, it’s slow. Evolutionary rather than revolutionary is sort of how I put it.

Yuval: Given the range of topics, why don’t we speak about wireless power? That’s one I like particularly, and we can talk about blockchain some other time. So when we think about wireless power, it’s a way to enhance smart home products. You know, either get rid of batteries or even in the future allow them to do things that they couldn’t do today because of power limitations or mobility limitations.

There are two approaches. One is to say, let’s make wireless power an aftermarket product meaning an add on to an existing product. Just like once upon a time you could add a WiFi, a PCMCIA card to an existing PC that didn’t have one. And the other approach is to say, no, no, no, we need to build completely new products that have wireless power integrated into them. And immediately take advantage of what wireless power can deliver. Which do you think is better?

Alex: So I think it has to be integrated if you want a mass-market appeal. I think an add on or essentially a device that plugs into kind of an existing ecosystem works well for sort of the enthusiastic buyers. So you’re kind of early adopters and enthusiasts, but obviously it’s a much smaller market than kind of the mass appeal. And sort of to that end, I think we could trace back in the smart home at least that there was this period, sort of, I mean it is a decade ago when we could see how mesh protocols like Z-Wave and ZigBee could solve one of the problems for getting rid of cables into your devices. You wouldn’t have to wire these things in. So their sort of constraint were batteries.

And of course, the sort of groundwork should have been laid by communication service providers. So your pay-TV and your broadband provider, they should have been the ones building these sorts of technologies into their equipment that they were sort of providing to customers. And that really would have built this massive foundation that this sort of smart home could kind of be built on. But they obviously sort of with that, they dropped the ball there and we’re in this world now where it was Amazon’s Fire phone failure that led to Alexa being stuffed in a Pringles can. And Google had probably been working on something, but it cost them $3.2 billion to buy Nest and get kind of brand recognition. But we’ve reached this point where the CSPs (Communication Service Providers) are trying to catch up to these kinds of accidental, almost, smart home systems and there’s a huge market for selling into those environments. And the CSPs might be able to claw back through partnerships.

I think DIY helps keep the prices low. But if you have an existing customer relationship, then you’re in this very kind of privileged position so that the pay-TV provider or the sort of electric utility already has this like fleet of engineers that they could sort of use to install. But that’s one hurdle I think that wireless charging kind of solves, because if we have the wireless data technologies to communicate and now we have these wireless power supply options. Then I think most of the installations could be DIY.

If it’s just a case of, you know, peeling off an adhesive sticker and popping it on a wall instead of, you know, running wires and drilling into conduits and all that kind of a messy job. Which would put a lot of the sort of mass-market customers off I think. So quite a long-winded answer.

Yuval: No, it was perfect. But when you look at aftermarket opportunities, you mentioned that especially good for tech enthusiasts and that may be true. But if I have an Arlo camera today and I’m happy with it, except that I don’t like the battery life, why wouldn’t I get a long-range charging solution that plugs into that Arlo camera instead of waiting for an Arlo or, not to pick on them specifically, someone else, to come out with an integrated solution?

Alex: Yeah, I mean thinking it through in my head, it would just be a case of having the power cable that you would normally charge the battery-powered device with and some sort of receiver. And I know with the Wi-Charge devices you can sort of pop one of these on a bookshelf and it will sort of beam power to it. And as long as it’s simple I can see that working really well. And in terms of an evolutionary process then the next kind of design, you would hope that some of these sorts of more prominent brands would start incorporating such kinds of technologies into the devices themselves. And I mean you get sort of horror stories from smart home providers who are fielding customer support calls. And they’re being asked, “What’s my wifi password?”

And I think that the gap between sort of ourselves who work in technology and our sort of early adopter enthusiasts is not very big. But the gap between the kind of early adopters and your average consumers is much bigger. And I can see a few of them messing up plugging cables or whereas buying a system that they thought would solve their problem and installing it incorrectly. And then complaining to the retailer or badmouthing the brand to their friends. It’s a bit messy. Whereas if there’s no middleman or if there’s a direct sort of technology integration, the risk of that happening is much smaller. But no, I agree. Like adding sort of an aftermarket capability is not technically difficult, it’s just another sort of hurdle. And for some consumers any hurdle, any barrier is too much.

Yuval: When you look at smart home devices today, there’s a debate or there’s a camp that says, “Oh do it yourself is the way to go. I can just buy it off Amazon or I can go to Home Depot and get a video doorbell and install it.” Versus the do it for me crowd that, “Well maybe the system is too complex, maybe I don’t know how to optimize it.” Of course, maybe a system that requires drilling holes and getting wires through the walls. Do you think wireless power changes that equation between or the balance between do it yourself and do it for me or does it just they’re going to continue to have these two camps and their relative proportion is not going to change?

Alex: I think the gap will close but it’ll take a while. But wireless power and wireless data really open smart home devices up to the rental markets which are a lot more sort of wary of anything they have to, you know, put a nail in the wall for in case they don’t get the rental deposits back. But the sort of do it for me service-based approach that’s a really nice model that CSPs or utilities or insurance providers, healthcare providers are actually sort of interested here as well. It’s anywhere where the sort of use cases for smart home stuff is quite convincing.

And I think the do it for me approach is compelling because presumably if you’re selling it in a bundle it removes the upfront costs. So instead of a few hundred dollars, it’s a $20 a month package or its a $100 installation fee plus a $30 and, you know, there are tiers. And for sort of the sticky thing, the sticky offering that the CSPs or the utilities one where it’s a way to prevent churn to keep customers kind of in a walled garden of sorts, you want it to be difficult to uninstall stuff.

It’s a very thin line between there being, a sort of strong business proposition and it being kind of anti-consumer. And in that regard, I guess making things easy for DIY is a good thing. But now I think at the moment there’s definitely a wider gap between the two but wireless power should close that gap in terms of being able to ship a customer something, a box, and then being able to set it up. But there’s a lot more than just the power delivery. You’ve got to have the right business integrations in terms of the processes. You’ve got to tie it into accounts and billing and there are new software integrations and stuff. So wireless power is only only one piece of that kind of puzzle.

Yuval: You mentioned CSPs, communications service providers, and insurance companies and so on. And one thing that’s common to them is that they have a monthly or other periodic billing relationship with the customer. So what do you think is best? So if I buy a long-range wireless power, do I want to pay for it like I paid for a wifi router, you know, just go to the store. I paid 200 bucks and I get the router that I want. Or do I want to pay for it like a utility bill? Just like I pay for electricity, I’ll pay for wireless electricity, you know, maybe some fixed service charge and then something per use. Which do you think is going to be more popular with consumers?

Alex: My view and through lots also sort of talking to people in the industry is that the bundled approach is the one that gets the larger volume of devices. I mean ideally, the customer never wants to think about how they go about paying they just want it to happen. It needs to be kind of frictionless and that’s one of the big risks of sort of smart home as a service is that if you mess it up, you can have really bad customer kind of backlash. If you have a systems outage and suddenly your customer who is paying you at this point maybe $100, $150 a month if we’re talking sort of triple play, quad-play plus smart home. That, if they can’t get into the house or if the heating doesn’t work, that’s a really big risk for you to take on.

And I would say that the bundled approach needs to be kind of bulletproof before you can really push it. And I think before you had an option to charge things sort of remotely through a wireless power delivery. Something running out of battery was a huge issue. If you think of a sort of comprehensive smart home, it’s probably a hundred devices to get that kind of vision of the future that the marketers like to talk about. A hundred devices, you might get two or three years of bliss but then suddenly you’re going to go through this horrible period where sort of every weekend something in the house is going to be beeping at you. And you need to go out and change a battery and that’s not a very good customer experience.

And worse, if something runs out the battery and you or the customer don’t know, then suddenly one of those really compelling use cases might fall over. It might not work anymore. And say it was a motion detection for some sort of smart home security system. If the detector has gone offline and nothing picked it up, you could be on the hook for a customer canceling the bill or you being sued for some robbery related insurance claim. It’s that kind of dynamic. So being able to recharge stuff without getting the customer involved, that’s a really nice kind of use case in terms of being able to ensure that everything keeps ticking over and you’re not asking a customer. And in that sense that is the kind of smart home that we were promised. Whereas I think a lot of the early adopters found out that it’s quite tricky.

So for that kind of enthusiast market, having direct control over it. So being able to go to a store and buy the wireless charger that is from a brand you know and trust, that’s good. Because most customers have of the sort of CSPs, they’re not singing the praises of the equipment they’re provided. That equipment’s often made by the lowest bidder. So yeah, the off the shelf approach I think is good. But I think that kind of mass-market approach it would be sort of bundled and integrated and there’d be as little thought as possible in the process.

Yuval: So it sounds like wireless power can actually be a revenue assurance for the service provider. And what I mean by that is you mentioned, a hundred devices or 50 sensors at home and let’s say that now the window sensor has gone bad out of battery, a smoke alarm has gone bad out of battery. Over time, you know, I don’t want to replace the battery. And over time the value that I’m getting from the service provider, it diminishes. And then I just go ahead and say, well, it’s not worth it paying $170 a month and I cancel the subscription.

And in that sense wireless far can help the service provider guarantee that I will continue to get the value that they intended me to get from day one.

Alex: Yeah, yeah, that’s a good way of putting it. The issue is just like that kind of service provider, how do you ensure that you have enough wireless charging capacity in terms of the technology? Does it mean you need a charging point by the front door, by the back door, upstairs? If it’s a security system, do you need to have something outside? At what point when you’re doing the sums, does it make sense to, “Oh well I won’t use the wireless charging for that, this application, this specific device. I will bite the bullet and wire that in. I’ll have one of the engineers arrive.”

But there’ll be all sorts of small devices. The door sensors, window sensors, leak sensors are so low cost that you can’t afford the truck roll. So for that kind of ecosystem, yeah, wireless charging is an excellent way to sort of ensure that they keep working. Because even the smallest devices in the smart home are kind of vital in terms of joining all the dots together. And yeah, if suddenly the window sensor isn’t working, then the entire security system might fall over. Because you won’t know someone’s left the window open. And if your system is that, you know, dumb as the customer will view it, they’re not going to pay to renew it. And yeah, it’s this churn opportunity.

Yuval: I think the point to bring up about many wireless charging points is not that different than sending up a mesh network. You know if you have a sufficiently large house, a single wifi hotspot is not going to be able to cover everything. And at some point to say, “Do I need wireless? Do I need wifi in my garage?” And if I do and maybe it’s time for me to, you know, install a repeater or set up a mesh network so I get consistent coverage everywhere I need.

Alex: Yeah. And it’ll be a kind of a choice I think. Because that was one of the other issues for the kind of ZigBee and Z-wave types that protocol is the only way to get coverage to the rest of the smart home. And once the CSPs started providing mesh wifi because they were having such a terrible problem with customers phoning them up and complaining that your wifi is crap, it doesn’t work. You know, I can’t get wifi upstairs. And the solution for that problem was, “Oh, we need to be able to put wifi upstairs.” And there wiring in a data connection wasn’t going to work. So it had to be a mesh wifi approach.

And if you think of that coverage problem, so you don’t have to worry about the power cables. You can just pop the devices wherever they’re needed. And yeah it’s this way of extending. It’s a kind of frictionless. It’s up to the customer. They don’t have to worry about a cable ruining the kind of a nicely designed living room aesthetic. It’s wireless it’s pleasing to the eye.

Yuval: One area that people are concerned about ruining their nicely designed aesthetic is the bathroom. And that is sort of an interesting place because I don’t know about your bathroom, but mine only has two or three outlets and one of them is probably used by the toothbrush and my wife plugs the hairdryer into another and there’s just not enough electricity to go around. Especially not if we wanted to do smarter things, smart devices in the bathroom. So my question is, do you think that wireless power enables the proliferation of smart devices in places that are not just a living room or the home security system?

Alex: Yeah, I do. The bathroom’s a good example. There are all sorts of like nice use cases you can do that in terms of like humidity and mold prevention and sorting out odors and airflow and that kind of stuff. And the big ones, the big valuable ones that home insurance types like is leak detection. Spotting kind of damp and whatnot. And the biggest barrier there is the wiring. No one wants to have to re-tile a bathroom because their fancy new extractor fan demanded a wire that led off to the living room or whatever. So that’s the sort of wireless data part. But no one really wants to tear out all those other points in a room. And yeah, with wireless power it should just be a case of one outlet.

Or you know, in a few years, maybe longer suddenly it will be the light fitting that that will have the kind of integrated charging function. Or you know it’s a kind of satellite device that you sort of plug-in elsewhere and in that sense you only have to worry about connecting one piece of that bathroom and all the other stuff is just kind of plug and play. Like you just drop it in and it should function. It’s a much easier way to effectively network or wire a house to sort of enable… Or not even houses, buildings, just enable these sort of new use cases. And the cost, the sort of total cost of running all the wires and cables and sort of networking everything together is massively burdensome. But with wireless charging, you’re sort of solving a lot of the pain points before they’ve even sort of cropped up. It’s preemptive, it’s tidy.

Yuval: So as we come closer to the end of our conversation today, I did want to ask you about the physical size. So a wireless power system, it has two parts, right? It has an energy transmitter and it has a receiver. And let’s assume the receiver is somehow embedded in the device that you want to get charged. So actually that device could get smaller over time because maybe you don’t need batteries that are as large or something. But what do you think about the transmitter? Does it need to be sort of the size of a carbon monoxide detector or something that you just plug in, a nest sized device that you just plug in and forget it? Or are you okay with having a small refrigerator type a box in the middle of your living room to say… Or having it integrated into an air conditioning unit and that’s the only size that you can get it.

Alex: I think smaller will always be better. It’s always a smaller burden to kind of overcome and if it’s something that you just have to plug in and find a place for in a room, the smaller the better. The large appliance I mean I think we’re a long way away in terms of kind of technological capabilities, but it would be great if you could just have one central appliance in a home that could sort of handle that but I think we’re a long way from there.

But there’ll be a balance I think between the sort of standalone dedicated charges and another sort of piece of the home that will eventually pick them up. And I think lighting’s a really compelling one because you’ve already got the power cable to the light fixture and if you can integrate there you’ve got this great sort of bird’s eye view of the room. That makes a lot of sense. But yeah cameras they’re good. Like you said earlier, smoke detectors. Most houses have one of those on each floor. In time it might be one per room. But yeah there’ll be a transition I think from this sort of standalone stuff to the kind of tightly integrated and sort of plug and play approach.

Yuval: So you’re saying it would be really cool if a company found a way to integrate a wireless charger into a light bulb?

Alex: Yes. Yeah. That would be the dream. And plus if it’s mounted to the ceiling, you could make them bigger. You know if it made sense to get more charging sort of circuits or capability up there. You’re not exactly sort of pushed for space on the ceiling as you would be on a wall or a floor. It might be more flexible.

Yuval: You know luck has it that I do actually know a company that uses light to deliver power. So I’ll talk to them about that and maybe one day we can make your vision true. Alex, this has been great, how can people learn more about your work and otherwise get in touch with you?

Alex: Yeah, so our website is www.rethinkresearch.biz. I’m sure Googling Rethink IoT should land you in the right place. But you know we write about the insight of things and video and wireless networks and now also energy. So you know there’s trials and whatnot can come to check us out. And I’m around on the usual social media channels. I’m sure you can pick me up on there, but no, it’s been a pleasure, Yuval.

Yuval: Thanks very much. Have a good one.

Alex: Cheers.

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