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4 sheperd frost & sullivan

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  • 1. Smart Home: Beyond TechnologyEnvisioning how the ecosystem could work Daniel Shepherd VP, ICT Frost & Sullivan June, 2012
  • 2. Contents Introduction The Big Picture  What is a smart home and why are we talking about it again now?  Top-down review of key issues, allowing us to highlight that that Challenges stakeholder fragmentation and competing interests are a core issue underpinning many of the others  Mapping who is who and who is doing what and who would like to Ecosystem gain what  Outline of 2-3 strategic options we see as to how it could all come Business Models together and exposing a preliminary evaluation  Suggesting what the industry and/ or specific players need to Way Forward consider and do next
  • 3. The Big Picture: What is the Smart Home?Back 3
  • 4. What is a Smart Home? A Smart Home is a home that integrates automation to control and monitor many internal functions such as heating, lighting, security and multi-media. It is an evolving concept that has seen a renaissance in recent years as home automation and broadband networking have achieved higher global availability. Source: Timberline Geodesics (used with permission) Source: Stratecast/ Frost & Sullivan4
  • 5. Smart Home: Major Themes Telemetry: Home Networking: Utilities, Healthcare, Distribution, Management, Security Control and AutomationCommunication Services: Content: Voice, Video, Data and Delivery, Management, Wireless Distribution
  • 6. Smart Home: Why Now? (or why again?) Smart Homes have been around since the ’60s, but now are beginning to resonate. Why?  Consumers are increasingly interested in services that enable safety, Inherent Needs more efficient use of utilities, life simplification, etc.  Many homes now have entertainment centers that combine video and Complexity other content consumption. They also have access to broadband data services and many have home security systems.  The need to conserve and reduce the cost of energy is driving interest in Regulatory ways to manage utility costs Technology  Home automation and networking technology are now easier to do: Wi- Availability Fi, data over power wiring, prewired new construction Data Ubiquity  Broadband and wireless now deliver data access to the home6
  • 7. ChallengesBack 7
  • 8. Challenges 1. Business Model  Consumer value perception: consumers aren’t clear what a smart home is or what it should cost  Yet, the market for smart home solutions is fragmented, with many smaller players offering partial solutions  Communication services are becoming tightly integrated: the smart home solutions must work with other communications services and technology 2. Funding Model  Focus on low margin access services compromises ability to invest in smart home offerings that enable higher margin revenues  Entry into home networking and automation space demands the creation of an extensive installation, maintenance and management infrastructure8
  • 9. Consumer Uncertainty Would you be interested in a smart home? Dont know Yes 28% 29% Would you be willing to pay extrafor smart home products or services? No 43% Problem: Low perception of Value Source: Stratecast/ Frost & Sullivan
  • 10. Market Fragmentation The market is extremely fragmented: – Thousands of home electronics manufacturers – Hundreds of communication service providers – Thousands of home electronic maintenance providers – Thousands of home networking installers – Dozens of telemetry providers There are essentially no comprehensive solutions for the interested consumer that include everything from installation to support and repair and which include content delivery services as well as monitoring services Remember: consumers want ease of use
  • 11. Consumers Dislike Complexity Importance of Offering Attributes Very Important 40% 35% 30% 25% 20% 15% 10% 5% 0% Ease of Customer Billing Quality Value Pricing Use Service Offerings must be easy to implement and use Source: Stratecast/ Frost & Sullivan
  • 12. The Smart Home EcosystemBack 12
  • 13. Smart Home Ecosystem Monitoring Services: Health, Communication Service Security, Providers Utility Home Networking and Management Content Providers Installers, Vendors, etc.
  • 14. The Smart Home Ecosystem Many providers in each domain: – Communication Services: AT&T, Verizon, British Telecom, Deutsche Telecom, France Telecom, Rostelecom, etc. – Telemetry: ADT, Monitronics, SDG, Overlook, FrontPoint, etc. – Content: AT&T, Verizon, British Telecom, Deutsche Telecom, France Telecom, Rostelecom, Hulu, YouTube, etc. – Home Networking and Automation: X10, NetGear, D-Link, Cytech, MarmiTek, Sonos, Nuvo, etc. Few complete solutions, although some are coming close: – AT&T Uverse as an example14
  • 15. Who Should Lead? The essential component of the smart home is the network connection – controlled by the network operators. Every other segment of the ecosystem must either ride the network or interface with it. This would seem to make network operator leadership in the smart home market, obvious…wouldn’t it? But wait…network operators needn’t be in charge. In fact, the smart home is largely accessed through easy to use interfaces and these can come from any segment of the market ecosystem15
  • 16. Business Model OptionsBack 16
  • 17. Trends, Opportunities & Unmet NeedsRelevant Trends Unmet Needs Increasing adoption of Increasing need monitoring for support services Increasing need for Increasing adoption of integrated solutions smart appliances Analysis Increasing need for Increasing use of user support broadband content delivery Increasing need for operator service revenue Increased consumption of broadband delivered Service Interface that is content intuitive, comprehensive and sticky Opportunity: Integrated Offerings that provide installation, support and services
  • 18. Key Drivers Summary Content HomeNetworking Cross Domain Broadband Competition Vendor Revenue Consumer Needs Source: Frost & Sullivan.
  • 19. Key Restraints Summary Price Lack of Integration Complexity Consumer Confusion Market Fragmentation Source: Frost & Sullivan.
  • 20. Business Options Drivers are defined by Consumer needs Restraints are defined by existing offering deficiencies Vendors/operators must focus on integration, ease of use and features to overcome market restraints Partnerships are indicated as a way to consolidate a critical mass of capabilities20
  • 21. Case Study: Verizon Whole Home Monitoring andControl Verizon includes home content management, utility monitoring and management, communication service access, security management and home automation functions Source: Verizon It does not include home network installation or support, although these can be obtained from recommended third parties21
  • 22. Case Study: Comcast Xfinity Home Xfinity services include home monitoring and security, consumer communication service access, utility management and content Source: Comcast Xfinity does not include home network installation, management or monitoring22
  • 23. The Way ForwardBack 23
  • 24. Way Forward Network Operators must develop or partner to obtain: – Complete suite of communication services – Cutting edge service interfaces – Service installation, support and management – Home networking support Home networking and automation providers must partner with operators to offer comprehensive smart home service packages Content providers must partner with network operators and home networking providers to offer a complete smart home package Telemetric services must be included in smart home offerings and must be integrated into other existing communication services24
  • 25. For Additional Information Daniel Shepherd Vice President, ICT daniel.shepherd@frost.com M: +7 915 043 4460

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