The next industrial revolution is already here, and it's in your home

By Anisha Nandi, Dan Patterson

/ CBS News

Global impact of the Internet of Things

The revolution might not be televised, but it will be voice activated.

At the World Economic Forum in Davos, Switzerland last week business and political leaders engaged in a series of debates about the impact of disruptive technologies on policy, politics, and business. One theme was clear: Powered by the Internet of Things, technology is migrating from the phone in your pocket into your home, your car, and your city.

IoT is at the core technologies that will power the so-called Fourth Industrial Revolution, a term used by business and political leaders to describe the economic impact of big data, artificial intelligence, and robotics. Ubiquitous computing, writes WEF founder Klaus Schwab, "has the potential to connect billions more people to digital networks, dramatically improve the efficiency of organizations and even manage assets in ways that can help regenerate the natural environment, potentially undoing the damage of previous industrial revolutions."

The Internet of Things, or IoT, is a network of household appliances and common objects — everything from a smart TV to a high-tech thermostat to a child's toy — that are embedded with microprocessors and internet connectivity that transform these "things" into computers. These connected devices create a ubiquitous web of data by exchanging information with the cloud, our smartphones, and with each other — creating endless new possibilities but also a huge array of security concerns.

"In many ways, IoT transforms mundane objects into 'applications' that have additional functionality," said TechRepublic's Jason Hiner. "IoT data provides useful insights and can be used to train artificial intelligence algorithms. It's exciting because mundane objects suddenly act like applications that you can interact with and learn from."

One example is your Fitbit or Apple Watch, Hiner explained. "Suddenly your watch becomes something that can improve your fitness and overall health."

One of the easiest ways to understand IoT is to look at your own home, Hiner says. As the technology develops and proliferates, more and more Americans will experience life in voice-controlled "smart homes" with connected devices embedded in nearly every appliance.

"When my washing machine is connected to the internet I can control it from my phone and I learn about how the device consumes water and how efficiently it's cleaning my clothing. That might sound a little dull, but if millions of washing machines are connected to the web the energy and cost savings become pretty real pretty fast."

The market for IoT is pretty real as well. According to data presented at the World Economic Forum, IoT devices are expected to generate $3.7 trillion in revenue by 2028. Last year, Americans bought over 40 million smart home devices, contributing to the nearly 20 million smart homes in the nation.

Smart home revenue is projected to be over $27 billion in 2019, making it a particularly attractive market for tech giants like Amazon and Google. These two companies in particular are building out their voice-controlled, artificial intelligence-powered virtual assistants into millions of devices.

At the CES tech showcase in Las Vegas this year, Google announced that its Google Assistant would soon be on one billion devices (the bulk of them Android phones). Amazon announced it's sold 100 million Alexa devices.

"A consumer can use a smart speaker to connect to another product and have the two products work in concert with one another to provide added benefit and experiences that can't be provided by the individual product alone," said Wendy Treinen, senior manager at GE appliances.

Amazon and Google have carved out at least 50 percent of the smart home market collectively, according to research from Strategy Analytics. Chinese tech company Baidu is rapidly moving into their space, increasing its market share from 1 percent to 8 percent over the course of 2018.

Apple, meanwhile, has struggled to keep up with competitors in this space, capturing less than 10 percent of the smart home market, according to Consumer Intelligence Research. This comes as Apple announced lower smartphone growth than anticipated. The company is making strategic moves to try to catch up, such as building AirPlay into Samsung TV's and selling the HomePod in China.

IoT is not without its dangers, though, and there are cases of glitches have raised red flags about how they can expose consumers to hackers. Recently, a California family says a Nest camera in their home was hacked and a voice warned them of a false missile attack. An Illinois family reported their Nest system was hacked by someone who hurled obscenities at them and jacked up their smart thermostat to 90 degrees. Nest, which is owned by Google, said the incidents stem from customers "using compromised passwords … exposed through breaches on other websites," and recommended using two-factor authentication to help reduce the risk.

In another disturbing incident, an Amazon Alexa reportedly sent the wrong user over 1,000 voice recordings from someone else's personal device. Other reports and patents signal that these devices could be programmed to "listen" more closely to conversations than we might anticipate.

As tech companies converge onto the lucrative, and growing, smart home space, concern is also growing about data use and privacy. In a survey commissioned by Microsoft, researchers found that 90 percent of consumers believe any smart technology can be hacked. Still, experts do not expect smart home growth to slow anytime soon.

"The efficiency increases and potential cost decreases are just the tip of the iceberg. The excitement and possibilities of new business models fuel the drive to find new ways to differentiate products and service and drive additional value for customers," said Trinen.

In spite of the risks, global tech companies are betting big that IoT is here to stay.

First published on February 1, 2019

© 2019 CBS Interactive Inc. All Rights Reserved.

Government contractors still scraping money together to feed their kids

"I went in the seats, trying to find out how much money we had to our name … we scraped up $3.89 for a happy meal for my 4-year-old"

updated 22M ago

U.S. nixing landmark arms control treaty with Russia

The White House and Secretary of State Mike Pompeo made the announcement Friday morning

updated 15M ago

Net neutrality court battle pits tech firms, states against feds

The court faceoff is aimed at restoring net neutrality, or the rule that internet providers treat all content equally

updated 50M ago

Business hiring roared in January: 304,000 jobs

Businesses hired robustly in January, even as unemployment ticked up to 4 percent from the partial shutdown

updated 16M ago

Afghan president sends letter to Trump on troop presence

President Trump has long expressed a desire to pull troops out of the Middle East

updated 39M ago

U.S. nixing landmark arms control treaty with Russia

The White House and Secretary of State Mike Pompeo made the announcement Friday morning

updated 15M ago

Afghan president sends letter to Trump on troop presence

President Trump has long expressed a desire to pull troops out of the Middle East

updated 39M ago

Women will surround Trump at State of the Union

From elected leaders to immigrants, many of the voices represented Tuesday are women

1H ago

Who is Cory Booker?

Cory Booker announced his bid for the presidency Tuesday morning

updated 7M ago

Cory Booker launches 2020 presidential campaign

The New Jersey senator announced his presidential campaign with a tweet and emailed video to supporters

2H ago

U.K. warned of fleeing business and food shortages as Brexit looms

A survey of 1,200 smaller firm bosses finds a 3rd could leave as fears mount over the impact of an increasingly likely "no-deal" divorce

1H ago

Don't give in to "myth of El Chapo," says defense in closing

Mexican drug lord Joaquin "El Chapo" Guzman faces drug and murder conspiracy charges and could face life in prison if convicted; the jury is expected to begin deliberations Monday

6H ago

29 children and babies die from cold as families seek shelter: Report

"Children are dying from hypothermia as their families flee to safety," said Elizabeth Hoff, WHO representative in Syria.

19H ago

"Disturbing" discovery: Giant hole found under Antarctica glacier

It is growing at an "explosive" rate that surprised researchers, NASA says

19H ago

Trump says location is picked for next North Korea summit

The president also reiterated his disagreement with his intelligence leaders

11H ago

Maroon 5 addresses controversy over Super Bowl show decision

The band was immediately caught in the crossfire of the NFL's controversial anthem policy amid reports that Rihanna and Cardi B turned down the high-profile gig

1H ago

Hugh Jackman and Ryan Reynolds call "official truce" on "feud"

They called a truce — and helped advertise each other's companies.

9H ago

Beyoncé and Jay-Z offer free concerts for life for going vegan

Okay vegans, now let's get in formation

9H ago

Mindfulness helped Kathy Bates lose 60 pounds

The 70-year-old actress said she learned about mindfulness from her niece – and has never felt better

19H ago

"Mobituaries": Who was the first African American major leaguer? Not Jackie Robinson

They made history. So, why don't we know their names?

21H ago

The next industrial revolution is happening in your home

Here's how the global business and political elite at the World Economic Forum in Davos think the Internet of Things, big data, and artificial intelligence will change the world

updated 7M ago

Net neutrality court battle pits tech firms, states against feds

The court faceoff is aimed at restoring net neutrality, or the rule that internet providers treat all content equally

updated 50M ago

What are "frost quakes"? The polar vortex could be causing them

People in the Midwest reported hearing loud booms or cracking sounds as temperatures plunged in the region

14H ago

Climate change skeptics live where it hurts economy most: study

Americans who least believe in climate change live where its effects are forecast to hurt most, Brookings Institution says

18H ago

These states could move to 100% renewable power

They represent 42% of the U.S. population and a quarter of its economic output — and shift can happen within 25 years

18H ago

Mindfulness helped Kathy Bates lose 60 pounds

The 70-year-old actress said she learned about mindfulness from her niece – and has never felt better

19H ago

Woman with dementia dumped outside nursing home, family says

Security footage shows the elderly woman attempting to get inside in the middle of the night after being discharged from the hospital

19H ago

Drugmaker doubles recall of infant ibuprofen

Some batches found with overly high concentrations of the drug, with infants especially vulnerable to adverse effects

Jan 31

Woman uses DNA test, finds sperm donor — and pays a "devastating" price

A sperm bank is threatening to sue an Oregon woman who contacted her daughter's biological father after using an at-home DNA test

16H ago

Company accused of fueling opioid crisis wanted to capitalize on treatment: report

ProPublica specifically names Kathe Sackler as being involved with a secretive project called "Project Tango"

Jan 31

Pepsi injects fizz into Coke rivalry during Super Bowl week

Pepsi is ramping up the rivalry ahead of the championship in Atlanta — Coke's hometown

updated 26M ago

Net neutrality court battle pits tech firms, states against feds

The court faceoff is aimed at restoring net neutrality, or the rule that internet providers treat all content equally

updated 50M ago

Business hiring roared in January: 304,000 jobs

Businesses hired robustly in January, even as unemployment ticked up to 4 percent from the partial shutdown

updated 16M ago

U.K. warned of fleeing business and food shortages as Brexit looms

A survey of 1,200 smaller firm bosses finds a 3rd could leave as fears mount over the impact of an increasingly likely "no-deal" divorce

1H ago

Government fears Eddie Lampert would wipe out Sears' pension plans

Federal agency that insures retirement funds objects to billionaire investor's bid to buy the bankrupt retailer

2H ago

Cop who shot fellow officer dead allegedly was drinking on duty

Internal police report asserts he and his partner consumed alcohol before he shot a female officer to death during a game of Russian roulette in his home

2H ago

20 charged in crackdown on "birth tourism" to U.S. by Chinese women

Businesses allegedly charged pregnant Chinese women big bucks to bring them to U.S. to give birth so newborns could be U.S. citizens

3H ago

Don't give in to "myth of El Chapo," says defense in closing

Mexican drug lord Joaquin "El Chapo" Guzman faces drug and murder conspiracy charges and could face life in prison if convicted; the jury is expected to begin deliberations Monday

6H ago

Cop bonds out of jail in alleged Russian roulette death

Officer Nathaniel Hendren​ walked out of jail, with his head down, as he awaits trial for allegedly shooting fellow-officer, Katlyn Alix

14H ago

Jussie Smollett's family condemns "racial and homophobic hate crime"

Family of the "Empire" actor who says he was attacked by men yelling racial and homophobic slurs says his story hasn't changed

14H ago