Tag Archives: Samsung

Selling Our Personal Data

SpyVsSpyRecently, the CEO of Apple, Tim Cook, has been making speeches in multiple forums that contrasts Apple’s privacy practices to those of other large consumer-based companies like Google, Facebook, and Yahoo. Cook says that his company is selling superior products and that they are not in the business of gathering or selling information about their customers.

Certainly he can’t say that Apple doesn’t use customer information, because they do. I have a Macbook and there are tons of ways that Apple uses my data to make my experience better. If I travel, the Mac will display the right time and local weather, for example. And various Apple software products will get to know me and make customized suggestions for me over time. But Cook’s point is that Apple doesn’t sell that data to others.

Of course, the companies that Cook is comparing himself to do not sell electronics like Apple but rather software. Probably the closest analog to Apple is Samsung and they can’t make the same claim as Apple. Late last year it was discovered that Samsung smart TVs were capable of listening to customer conversations all of the time. It’s not clear that Samsung gathers data directly from its smart phones, but they have chosen Android and one can imagine that part of that arrangement is to let Google gather data from Samsung smartphones.

Companies like Facebook and Google have a hard time not using your data, because that is really the only way they can generate value. It’s wonderful to have millions of loyal users on your platform, but both companies make most of their money from advertising. Certainly Google’s search engine advertising doesn’t require any data from users and that revenue is driven from the companies who want their products to be at the top of the list in a search. But Google and Facebook also sells web advertising, and the name of that game is to know the user in order to direct the most relevant ads to each customer.

I think if using our information stopped with advertising that most people would be fundamentally comfortable with having these companies invade their privacy. I know I find it eerie when I do a Google search and for the next three days I see ads that are related to for something I searched for. But I can personally live with that, because most of the time Google is wasting their time on me and I wasn’t looking to shop. I find it funny that I will look up the latest information about smart cars and then get flooded with car ads (because I exclusively drive Ford trucks and I buy one every twenty years, whether I need a new one or not).

The real rub is that these companies do a lot more than build advertising profiles on us. They know all sorts of other personal data about us and they associate that data with our name. While I am not bothered by getting car ads for vehicles I am never going to buy, I frequently hear about people getting bombarded with ads or even mailings and phone calls about far more personal topics like rehab centers or the latest diabetes treatments. That is going over the line in my opinion.

The invasion of our privacy seems to be going even further. Facebook, for example, is the world leader in facial recognition technology and they are building a huge database of every time you show up in somebody’s picture. They not only know about you, but they are learning where you go and who you associate with. That is a bit unnerving.

But to me the real scary thing is that these companies then sell this data to others. And there is no telling how that data is used. Even should the large companies have some sense of morality and responsibility (and many believe they do not), the companies that buy this data can do anything with it they please. It’s very easy these days to buy a data dump about other people, and that kind of information can be a powerful tool in the hands of an ex-spouse, an employer, or a scammer.

The problem that we all face is that it’s too easy to use the services that watch us. Google has a spectacular set of software products. And for my generation there are a ton of friends and relatives on Facebook. If you don’t want to be spied on you have to make a very conscious effort to wall yourself off from these sorts of data-gathering web activities, and that is hard to do. And no matter what you do online, your ISP or the government might be gathering all of this data anyway.

These large companies sometimes hide behind the fact that they mostly sell ‘metadata’ which is data that has been scrubbed to hide the identify of individuals. But numerous articles point out that with data mining it’s only necessary to know a few facts about you in order to pull out facts about you from metadata files.

We may come to a day when there is massive pushback against these companies that are collecting, using, and selling our personal data. It will probably take a string of tragedies and disasters for this to become a worry for the average person. And if that happens, then either the large companies will stop spying on us or somebody who promises not to will take their place. But it is extremely profitable today for the big companies to spy on people, and until there is more pain than profit from using our data, one has to imagine that this is going to continue.

The Demand for Energy Monitoring Services

Goneywell LyricThe energy monitoring business is getting interesting to watch. I looked a few years ago and found dozens of companies offering some kind of energy monitoring services. On top of that, within the last year a lot of large companies like Apple, Google (Nest), Samsung, Verizon, ADT, and Wal-Mart have entered the market. I have a number of smaller ISPs clients that offer the service in rural markets, but that is quite an array of big names to compete against.

Let me start by defining what I mean by energy monitoring, specifically. The traditional kind of monitor is a whole-house monitor. This is a device that is installed near to your electric meter and it records your energy usage over time. These devices let you see both usage and cost at different times of the day, which gives you the ability to look around your home during the times of expensive usage to see what is costing you the most money. These devices normally need to be installed by an electrician because they are on the main power feed of the home. People who use them say that they help them to curtail electricity usage.

The next step up in energy management is to install a smart thermostat. Since heating and cooling are generally a major bill for many households, a smart thermostat can help you use energy wisely. For example, you can program your system to supply less heating or cooling at different times as appropriate, like when you are sleeping. And you can tie these into a burglar alarm system to curtail electricity when you are not home.

The final step in sophistication for home monitoring is to put additional monitors on specific high-energy appliances such as a washer/dryer, pool pump, dehumidifier, hot water heater, etc. These device-specific monitors can help you save money on the devices that use the most juice in your house.

The various companies in the energy monitoring business offer a wide array of services. Some simply sell the smart devices, which are often linked to your smartphone, and then monitoring and modifying usage is up to the homeowner. But a number of these businesses are now selling monitoring services where they will look at your usage for you and make recommendations on how you can save money. Again, there is a wide range of both services offered and prices charged and there is not yet any standard way today of selling energy management services.

I saw the results of a nationwide survey published a few months ago by Parks Associates of Dallas, Texas. This survey asked people a wide range of questions energy management services. One of the most interesting results of the survey was the number of households willing to pay for monitoring services. The survey showed that 25% of households were interested in an overall energy monitoring service. 22% of households said that they were interested in an appliance monitoring service of the biggest electricity users in the home. And 26% said specifically that they were interested in a heating/air conditioning monitoring service.

Those are huge potential penetration rates for such a new industry and one would expect those to grow over time as more people attest to the benefits of watching and controlling energy consumption. However, the survey was not all good news; over 50% of homes interested in the services said that they would not be willing to spend more than $2.99 per month for all three services.

Our firm has given surveys to households for years and so we understand that when it comes to price-related questions that what people say is often different than what they do, and ideally people want things for almost nothing. But not many of the big companies going after this business are going to find a revenue that low to be attractive.

To put into perspective, according to a National Home Builder’s Association study, the average monthly electric bill in the US in 2013 was $110 per month. The estimates are that the bills in 2015 are probably slightly lower than that figure. If energy monitoring can help people save between 10-20% on their electric bills, which is the claim often made, then that average savings is $11 to $22 per month. On top of that there is a savings on the heating bills for people that heat with something other than electricity. The real question is how much are people willing to pay for those savings?

Of course, electric rates vary widely by state, which is a factor both of the cost per kilowatt hour, and also of how the electricity is used. For example, as one might expect due to the summer heat, the highest electric bills are in the southeast while the lowest are in the northwest, which has milder weather, as well as a lot of hydroelectric generation.

If you are thinking about getting into this business you need to not only look at what your local Wal-Mart is offering, but also make sure you understand what people in your area pay for electricity and heating.