By:

S&P Global Market Intelligence

Sarah Barry James
Senior Reporter, SNL Kagan

S&P Global Market Intelligence
212 7th Street NE, Charlottesville, VA

According to the leaked documents, the Central Intelligence Agency developed a number of cyber tools to access private smartphones, computers and smart TVs. In particular, one program named “Weeping Angel” targeted Samsung smart TVs, using their voice control functions to covertly record conversations.

The CIA, thus far, has not confirmed the authenticity of the documents. A spokesperson for the agency did acknowledge that it is “legally prohibited from conducting electronic surveillance targeting individuals here at home,” and yet it must be “innovative, cutting-edge, and the first line of defense in protecting this country from enemies abroad.”

In an interview, Francesco Radicati, a senior analyst of consumer technology at the research firm Ovum, noted that U.S. consumers have known since 2013, when Edward Snowden leaked classified information from the National Security Agency, that the government was working on ways to collect more data from connected devices. But for the most part, Radicati said people generally feel a sense of “safety in numbers” and thus do not shy away from new technology.

“I think it is true for the average consumer, unless they are a public figure, it’s quite unlikely somebody is going to target them,” he said.

Nevertheless, the vulnerabilities uncovered by the CIA and made public by WikiLeaks could eventually be exploited by hackers with malicious intentions.

“The key issue from the WikiLeak documents is the potential creation of new malware,” the Centre for Strategic Cyberspace + Security Science said in a recent cyber intelligence bulletin. The Centre, a bipartisan international nonprofit organization focused on cybersecurity and cyber defense, expects a “first wave” of advanced attacks by mid-March.

“A second wave of malware attacks will likely commence in April with more attacks using new methodology as the WikiLeaks material is circulated. These attacks may be somewhat more visible in the hands of less sophisticated operators,” the group said.

If this happens, Radicati said consumers will likely become much more concerned about the devices in their households. But otherwise, he believes the WikiLeaks revelations will have a “minimal impact” on smart TV sales and the adoption of voice controls.

Jeff Heynen — an analyst with SNL Kagan, an offering of S&P Global Market Intelligence — agreed, noting that consumers are not going to stop buying new TVs as a result of the WikiLeaks news. And the majority of new TVs being sold in North America are smart TVs with advanced features.

“That’s just the future,” he said. “We’re moving inexorably in that direction, and security concerns aside, people are going to buy those sets in the next upgrade cycle regardless.”

At this point, Heynen believes consumers’ chief concern about voice controls is not privacy, but rather has to do with being misunderstood by the device.

Over the long term, though, Heynen believes the industry will come to better understand how consumers prefer to interact with certain devices. For instance, he noted that when it comes to voice controls, some devices like Amazon.com Inc.’s Echo and Google Inc.’s Home voice assistants are designed to remain in constant listening mode; other devices, however, require a physical trigger before they can listen for a command.

It will ultimately be up to consumers to decide which option they prefer for what device.

“It may be that the use case for voice controls on a smart TV is what Comcast [Corp.] is doing now with X1 and its Xfinity remote, where you have to press a button in order to activate that feature, so that it isn’t in listening mode all the time,” Heynen said.

Radicati agreed that consumers may ultimately prefer an extra degree of privacy protection on their televisions as compared to their home assistants since “we do and say things in front of the TV, especially if it’s in the bedroom, that we don’t necessarily talk about on Facebook.”

Anthony Smith-Chaigneau — senior director of product marketing at NAGRA, a digital TV division of the Kudelski Group — said solutions to these sorts of privacy concerns in fact may be solved naturally as the technology improves. He noted that some voice and facial recognition TVs in the market actually have included warnings directing consumers not to disclose sensitive information in front of the TV.

“This will need to be maintained alongside developing solutions that can better manage and understand the differences between the types of data to capture and to ignore,” he said. Essentially, the TV will learn what language to record and what sounds to mute.

“While voice control certainly does have a place within the world of interfaces, there is still work to do to make it part of mainstream systems,” Smith-Chaigneau said. Once manufacturers and operators can prove to consumers that the technology is safe and reasonable and that it can deliver real benefits, he said, “We’ll likely see significant growth in take up of voice-control services by subscribers.”