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Consumer privacy and security concerns for connected devices

A number of factors influence consumer perspectives on privacy and data, and concerns vary for any particular brand or product category. Moreover, the general backdrop of headline news about data breaches and unauthorized data sharing raises the anxiety for some consumers, whether they are affected or not. An increasing number of consumers have actually become victims of identity theft, leaving them with a heightened concern for the real-world consequences of re-establishing identity and monitoring credit records for unauthorized purchases. Privacy concerns about certain devices vary by whether a consumer owns or intends to purchase the device, as opposed to someone with no actual experience with the device. Concerns rise once a consumer owns a device and becomes more familiar with its functions.

Altogether, 47% of broadband households express privacy or security concerns about at least one smart home device. They express the greatest level of concern for the privacy and security of computers and tablets (43%), followed by smartphones (41%). The lengthy history of connectivity, data breaches, and the volume and variety of data stored and transmitted by these devices drives these concerns. Nearly as many respondents express concern about relatively newer smart entry devices (door locks, garage openers) (40%) and home security systems (38%). U.S. broadband households expressed significantly lower levels of concern for thermostats, lights, and HVAC systems (25%), and connected CE devices (24%). Notably, despite stringent HIPAA requirements in the health sector designed to protect consumer health data, respondents express the lowest level of concern for connected fitness devices and connected health devices, each earning a 23% concern rating.

Device ownership and purchase intentions are the best indicators of a consumers’ level of privacy and security concerns. Privacy and security concerns do not differ drastically by age group. Smart home device owners are more likely than non-owners to have concerns, suggesting that concern rises when ownership creates the real possibility of compromise. Those intending to purchase a smart home device also report significantly higher concerns for privacy and security versus those with no intention to purchase, implying privacy concerns are more top-of-mind for those in the market for devices.

A similar pattern exists for other device categories, with an approximate 50% increase in concern level among those who own connected devices. For instance, 20% of smart TV non-owners express privacy and security concerns versus 30% of smart TV owners. In the health devices category, security and privacy concerns among connected blood pressure cuff non-owners (22%) increase by an even greater margin for owners (43%).

When specific privacy and security concerns are considered, concern for “identity theft or data hack” ranks as the first or second leading concern in eight of nine connected device product categories. Regulators, advocacy groups and forward-thinking industry players have championed the notion of a consumer bill of privacy rights. However, when a variety of specific privacy rights are presented to consumers, no one privacy right alleviates the concern of more than one quarter of consumers.

Still, combining at least three privacy rights alleviates almost three quarters of consumer concern. Adding together consumers who have no privacy or security concerns with those whose concerns are relieved by the right to be invisible, the right to approve who uses the data and the right to be erased, relieves concern for 73% of consumers. Further, simply giving consumers the ability to opt-in or opt-out of data collection and still use the product or service alleviates most of the concern.

Sales of connected devices are exploding. The massive amount of data available from connected devices creates an unprecedented opportunity for new products, value-added services, new partnerships and new ways to use data. Consumer concern for data privacy and fears of hacked data loom larger than other concerns for connecting devices to the Internet, and high levels of security may become a differentiator for many new connected products.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.