The Connected Digital Home - Siemens...Automation The Digital Home VoIP services Digital Video, Imaging & Audio Siemens Smart Home Conference 15th March, 2006 In-Stat Confidential

1Siemens Smart Home Conference 15th March, 2006 In-Stat Confidential

Joyce PutscherIn-Stat Principal Analyst

[email protected]

The Connected Digital HomeDrivers, Impact, Challenges & Opportunities

for the Service Provider


• The Digital Home Progression

• Challenges, Opportunities & Drivers

• Home Automation Evolving

• Total Potential Market - WW, Europe & US

• Smart Appliance Market

• Summarize

Agenda


PVR/DVRResidential Gateway or Router/Modem

MobileVoice

Quad PlayFixed Voice

(Pots, cable, VoIP)

BroadcastTelevision

Cable, DBS, TelcoMediaClient

MediaServer

Control/AutomationNetwork

Networked CEDevices

BroadbandSharing& PrinterSharing

Internet

PhoneMobile Devices

Digitally controlling your......

EntertainmentE-World

Environment (Safety, Security & Energy)

The Digital Home

VoIP services

Digital Video, Imaging& Audio


PVR/DVRResidential Gateway or Router/Modem

MobileVoice

Quad PlayFixed Voice

(Pots, cable, VoIP)

BroadcastTelevision


MediaServer


Networked CEDevices


Internet

PhoneMobile Devices

Needs to support:• Data delivery• High Definition TV• Voice services• Content sharing• Security, Safety,

Automation

The Digital Home

VoIP services



Fixed Voice (Pots or Cable)

Needs to support:• Data delivery• Content sharing• Voice services• High Definition TV

BroadcastTelevisionCable, DBSMedia

Client

Internet

Phone

“Average” Mainstream Digital Home in 2005


PVR/DVR


Residential Gateway or Router/Modem

MobileVoice

A basic, underlying element of the Digital Home in 2005 is

broadband access.

Wired, Wireless or a Combination





Client

Internet

Phone



PVR/DVR



MobileVoice

Family entertainment video arrives primarily via Digital Cable or Satellite services.

Telco video is still in its infancy.





Client

Internet

Phone



PVR/DVR



MobileVoice

Digital imaging, video & audio devices still isolated

Still Early AdoptersPC and entertainment clusters inthe home are getting bridged by

early adopters

The Driver? Share content between PC and stereos /TVs




Client

Internet

Phone


PVR/DVR



MobileVoice

Although two or more services may be obtained via one provider,

these services are still not intersecting much within the

“average” “digital” home.....yet



Fixed Voice (Pots, cable, VoIP)

BroadcastTelevision


MediaServer


ResidentialGateway

EmbeddedNetworkingConnectivity

Internet

PhoneMobile Devices

Service Provider Challenges:• They need to make $• Subscriber growth slowing• Want to add value & improve

ARPU yr-over-yr• Digital Rights issues• Liability issues• Service calls & truck rolls• They compete with each other

Challenges


Need to reduce

$250 avg per truck roll

Self install, a make or

break proposition


Fixed Voice (Pots, cable, VoIP)

BroadcastTelevision


MediaServer


ResidentialGateway

EmbeddedNetworkingConnectivity

Internet

PhoneMobile Devices

Service Provider Opportunities:• Voice is growth driver (cable)• VoIP is driver sustain subs (telco)• Deliver same content in multiple formats (mobile, wide screen) + $

• Managed services for personal content (storage for sharing music/photo/video)

• Integrated services• Managed services for home

network (virus, firewall, etc.)

Opportunities


Slow churn & increase customer

“stickiness”

Caller ID to TV screenTV on mobile phoneVoice mail to e-mailVideo & pic messaging


Digital Home Drivers & DesiresConsumers Want:

• Reliability

• Long-Lasting Solution

• Low Cost

• Easy to Install

• Easy to Use

• It Has To Make Sense

Drivers:• Professional “Content” that people like

– Music files, music streaming, music sharing– Motion pictures and video programs

• Personal “Content” that people like to share

– Still image photographs and stop-action video images

– Home movies, videos, other free “Content”

• The Rise of In-Home Network “Nodes”– More devices add capabilities - more things you

can do with the network– Wired, Wireless, and hybrid devices

• Availability of Portable Storage Devices– Flash memory products, disk drive products,

optical products that make sharing easy

Increase the value of the network


…Send to Portable Devices

...Explore Library on TV…Sync to the Auto

… Listen onConnected Stereo

…Add to Home Collection

…Store on PC

Multi-Play Integrated Connected Home Vision:Seamless Entertainment


Control AppliancesMonitor Doors

Access Home Information

Receive Real-TimeNotifications

Store Video for Later ViewingView Live Camera Feeds

Multi-Play Integrated Connected Home Vision:Seamless Information & Control


Home Gateway(s)

TelephonyNetworkNetwork

CATNetwork

Home CopperPhone Line

Network

Home Coaxial Network

ONT

Fiber or

Copper

Coax

Coax

TV

TV

TV

STB

STB

Home Wireless Network

Multi-Play Integrated Connected Home Vision 2008 to 2010

Could migrate from 2 gateways (1 video, 1 data) to 1 gateway IF both services are from same provider (more likely with Telco 2008 or after) & if cost effective. But not as flexible. May depend on comfort factor of video content providers.

PowerlineNetwork

PC

PC

PC

HomeAutomation:

SecuritySafety

ControlUtility

Conservation

Wired &Wireless

X-10LonWorks802.15.4

DECT(Ntwkg: ZigBee,

Jini, Echelon,others)

PC

PC

CE

PC

POTS Phone: Telco, Cable

PC

PC

IPPhone

EthernetNetwork

TV

TV

PC

IPPhone

STB

STB

PC

STB

STB


SecurityConvenienceCost Savings

Energy / Water EfficiencyRemote Home Management

Expensive

Limited Awareness

Complicated Set-up

Lack of Interoperable Standards

Barriers Drivers

Home AutomationBarriers & Demand Side Drivers

Safety


• More affordable systems

• Emerging business models based on e-services

• Retail market enabled by availability of self-installable systems

• Remote access as a standard feature

• New applications and services

• New technologies for low-cost embedded intelligence

• Standardization of device networking technologies

• New equipment and software for creating interoperability

• No PC requirement

• Establishment of promotional organizations and alliances

Home Automation Supply Side Drivers


Home Automation Evolving• Home Automation is evolving from a “jigsaw puzzle piece”

approach toward integrated solutions

• To date, home automation has been a collection of proprietary solutions for individual applications and some complete systems

• Retrofits using wireless system solutions are extremely important rather than counting on high-end new construction. Powerline also becomes more important moving forward.

• The goal is to offer systems that can be purchased little by little, as the consumer determines their need and budget to allow for them, but can be added to EASILY to their existing system without interoperability problems or having to have multiple controls/interfaces

• Ultimate goal is to tie in home automation systems to the homenetwork router


Potential Market for Connected Digital Home Services & Products:

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2004 2005 2006 2007 2008 2009

ROWAsiaEuropeNA

Source: In-Stat, 2/06

358M

192M

(000)

Broadband Subscribers


-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2004 2005 2006 2007 2008 2009

ROWAsiaEuropeNA


358M

192M

(000)

Potential Market: Broadband Subscribers in Europe

21% CAGR

59M

111M


European BB Subs with Home Network: Highest Potential for Smart Home Automation

-

20,000

40,000

60,000

80,000

100,000

120,000

2004 2005 2006 2007 2008 2009

Eur BB Subs no HNEur BB Subs with HN


(000)

34%


1%

93%

6%

1%

90%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Sample (n=1000) Respondents with a HomeNetwork (n=196)

Yes

No

Don'tknow/refused


Do You Have A Home Automation System Or Technology That Allows You To Control One Or More Functions For Your Home, Such As Heating, Lighting,

Pool Equipment, Or Monitoring Systems?

US telephone survey


3% 6%4%7%13%

17%17%

22%

63%48%

1% 0%

0%

10%20%

30%

40%

50%60%

70%

80%90%

100%

Total Sample (n=1000) Respondents with a HomeNetwork (n=196)

Extremely interested Very interested Somewhat interested

Not very interested Not at all interested Don't know/refusedSource: In-Stat, 2/05

30%Interested

US telephone survey

How Interested Are You In Being Able To Control Functions In Your Home, Such As Heating, Lighting, Security, Pool Equipment, Or Monitoring, From A Remote Location

Or Via A Mobile Device?


How Would You Purchase a Home Automation System?

Purchase and install yourself Through a home security companyPurchase with new home Through your phone companyThrough your cable company Don't know/refused

30% 34%

22%29%

18%

14%11% 3%9% 7%

9% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Sample (n=1000) Respondents with a Home Network(n=196)


20%Higher Likelihood via phone/cable provider if no current home

network. Perceived as

easier, as they are less

knowledgeable

Good potential with

consumer education

and advertising

To date, most consumers do

not think of phone or cable

co for this

US telephone survey


Smart Appliances:Worldwide Internet-Enabled White Goods

Annual Shipments Forecast

0

100

200

300

400

500

600

700

800

900

2004 2005 2006 2007 2008 2009

(000)



30%

14%

13%

12%

9%

9%

64%

34%

39%

23%

27%

34%

14%

41%

0% 20% 40% 60% 80%

Electronics retailer

Computer Store

On-line

Through your BB service provider that you will pay for

Warehouse Store

Office Supply Store

Through your BB service provider, but you expect to get it for free

Plan to Start HN

ConsideringUpgrade

Prevalence of WLAN Equipt in retail channels & exper. users know this

Where Consumers Plan to ObtainHN Equipment



Summary• Broadband growth leads to demand for other digital services• Home automation is an emerging & growth market• Trend toward IP & digital not expected to change, it will only

increase• Home automation has been a collection of proprietary

solutions for individual applications• Systems have been expensive, focused on new construction• More affordable products and services that can be added in

stages will appeal to broad customer base• Retrofits using wireless system solutions are extremely

important, with powerline also becoming important• Market is poised to take off. Market Leaders have the

opportunity to capture consumer mind share.


Thank YouThank You

Joyce [email protected]

Documents

The Connected Digital Home - Siemens...Automation The Digital Home VoIP services Digital Video, Imaging & Audio Siemens Smart Home Conference 15th March, 2006 In-Stat Confidential