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The title strongly implies the hardware is intentionally being bricked.

Being put out of commission by downed servers is still pretty terrible, but intentionally bricking the devices is a separate further step to me (and has been done by other companies).

They could always have designed their product in a way that doesn't turn into a brick when the servers disappear.

Call it "negligent bricking"?

No, the proper term is "IoT-grade architecture".
The "S" in "IoT" stands for security.
I feel like selling a hardware device that depends on a cloud service you're bundling for free is intentionally bricking the devices. They are refusing to accept returns, and they're refusing to open the API or provide a firmware update that disconnects them from the cloud.
$30 - $50 plus a paid subscription seems expensive for what is basically a wifi on/off switch, especially if you wanted to do a whole house.
They did a lot of things right. It seems like they just couldn't compete with copycats. Maybe they overestimated demand at that price point?
At $50 a bulb, it would cost me $1550 to do every permanent fixture in my 1600sqf house. $1100 if I skipped the bathrooms and closets. Another $250 for lamps. I think I was mistaken about the subscription fee, there wasn't one. Regardless, that is crazy expensive.
Their competitors don't appear to be much cheaper ($40 per bulb), and their pitch materials cite home lighting automation kits that start in the thousands (possibly wired?). They seemed to think that they had a significant price advantage.

Well, hopefully we'll get a more detailed post-mortem than "we ran out of capital."

This seems to be a recurring problem in the IoT industry.

I've had dozens of lightbulbs affected by TCP Lighting and Homebrite choosing not to support them anymore. They can't be accessed from the internet anymore and their schedule can't be changed.

The worst, though, is TCP. Someone reverse engineered the API to the home hub, and shortly after TCP pushed a software update to everyone's hub encrypting the software. Then they terminated the service. So, they bricked the device in slow motion.

This is why when I buy new bulbs, I'm only going with HomeKit stuff. Apple's not going anywhere. And while it likes you to have the latest, greatest stuff it at least provides updates for its iOS devices for five years. Hopefully that's an indication of the longevity of HomeKit connectivity.

Proving yet again that the "Internet of Things" won't work until the "Local Area Network of Things" works. If the "thing" requires the Internet to work, these kinds of failures will continue plaguing them for eternity.

Sadly the "IoT" market is practically predicated on selling some hideously expensive service that you don't want or need on top of a piece of hardware that would be perfectly happy working against a home edge gateway rather than "the cloud". Approaching a VC asking for money for digital lightbulbs and dimmers that work against a local server running on a Wifi-router-like-box? Using a standardized protocol, so you don't need 10 different home edge gateways to orchestrate different tasks? Get out, we don't even want to hear it...

Accessing the Internet should add features - not having the Internet should not burden or brick the device.

Except consumers want the ability to control/check their IoT devices when they are not at home. Most homes in the US do not have a static IP address. Yes, you could set up OpenVPN on a router and use DDNS, but you would still be reliant on a 3rd-party DDNS provider that could always go out of business. Also most home routers supplied by broadband providers do not support OpenVPN.

An admittedly expensive solution would be to use the Ethereum main network to communicate with the IoT device.

A middle ground is have a local-first control, that the company exposes to the internet via the customer's account.

For example, a local administration page that can be accessed within the LAN, and which can then be proxied by the provider. In the case that the provider goes out of business you lose the remote control (unless setting up your own VPN) but the device won't be bricked.

Unfortunately, I imagine some companies intentionally avoid doing this to require customers to pay a subscription fee.

I still don’t think that really avoids the issue of devices losing functionality if the company folds. If an IoT company goes OOB, you also lose things like security updates, tech support etc. I would give an ‘orphaned’ IoT product a year tops before it was no longer safe to have on your network.

I think consumers need to understand that when they buy a connected device, they are also buying a license to the software that powers it. That license is generally not perpetual unless specified.

Most of these companies don't have any subscription fees. They just provide the "free" cloud service for as long as it takes to make a whole bunch of sales, then shut it down and suddenly all the devices stop working. if you're selling a $50 device that people have to wire into their home, with an expected lifetime in years or decades, it's pretty negligent to not provide for a sustainable service.
You’re saying it would be more responsible to charge a monthly fee? How could you compete against those firms that do not charge fees?
I'd prefer they just let you run the hub/central service yourself, with an option to have them run it for a fee, yes.

I think we'll start to see regular consumers harmed by some of these start-ups destroying hardware when they go out of business, and perhaps people will stop buying them unless there's some protection. Then the "free" solutions will be looked at suspiciously and hopefully discounted by the tech press and retailers. Alternately, retailers might be held liable for refunding purchases of products that stop working before the legally mandated warranty date (such as in the EU) or by credit card companies in the US, so they'll stop selling any cloud required garbage.

It’s possible but sounds pretty optimistic. More likely that the big 5 tech companies (who can pay for cloud services to function indefinitely) will consolidate the smaller IoT plays, and offer users a limited feature set for free, with premium tiers as well.

Also remember that if you’re maintaining the hub yourself it won’t get security updates.

Home Assistant on a raspberry pi gives you an open source home hub with a mobile app. It has built-in dyndns functionality from a variety of providers, using an open standard. It supports on-board ssl via letsencrypt, and provides easy instructions for forwarding the relevant ports on your router. I think the router forwarding step can be fixed with upnp? Then you've got a home hub that works from anywhere and doesn't require a specialized cloud discovery service.

I'd love to see someone provide a pre-packaged zwave/zigbee talking home assistant appliance with support for snips.ai voice control. Unfortunately, hardware-wise it would probably cost $250 to build out of off the shelf components, but perhaps at scale it could be affordable? Google and Amazon are selling their closed, cloud chained voice assistants for practically below cost, though, so I don't know how such a product could really compete.

I don’t foresee any company taking a product like this to scale. If an amateur can build it out of OTS components there is likely little there that is defensible, and you’re right the space is competitive.
SmartThings recently announced support for some local control of devices even if the internet is down, which is a good step from a big player.

In the current IoT landscape, I feel like you have to either go with the biggest players that have the best chance of surviving or hack everything together yourself to work locally.

>I feel like you have to go with the biggest players that have the best chance of surviving

Both Nest and Logitech have bricked old products.

I think the only way the industry survives is if consumers understand that they are not just buying the ‘thing,’ but also a license to the software that powers it. Some SW licenses are open source, some require a monthly fee, and some are sold ‘as-is.’