Thank you. 2013 Trends What
will the key changes be in business and design during 2013, and what should you do about it?Slide 1 © Fjord 2012 | Confidential

AN INTRODUCTIONAt Fjord we work
across multiple domains that are As usual, the trends point at some recurringgoing through major transitions – and the work themes: for 2013 the following weave their way inalways involves an element of “new.” A new and out of our forecasts:platform or technology, a new business That mobile is still changing everything – ifproposition, or new target users. We work at the anything faster, and now including new ways offront edge of mainstream, where innovation meets working.mass-market appeal. The constant presence of That personalisation will be a hot topic for success.“new” in our work feeds our curiosity, and makes That data and the success of new systems areexploration a necessity. tightly bound together.So we constantly think about what tomorrow willbring. At the end of the year we ask teams at And as ever – for truly great service design - people come first.Fjord to offer their predictions on the major trendsthat will impact businesses and society in the year We hope you find our 2013 trends interesting,to come. We know that trends can both inspire provocative, inspiring, and importantly, actionable.and worry those responsible for shaping the next If you want to delve deeper into our thoughts onwave of products and services. So weve also tried what you should be doing to stay ahead of theto give some clear advice that will help both curve, please reach out for a customizeddesigners and business leaders understand how to presentation by Fjord on the trends that will haveinterpret the opportunities that lie ahead. the most impact on your business.Slide 2 © Fjord 2012 | Confidential

#1PEOPLE ARE The single biggest
source of digital disruption over the past decade has been people – the users of technology themselves.RUINING Access to technology has made it possible for anyone with an idea, a vision and determination toEVERYTHING build a service that circumvents traditional businesses. And the platforms that people use to trade withfor traditional businesses one another are far richer than any single business could build.Slide 3 © Fjord 2012 | Confidential

#1 PEOPLE ARE RUINING EVERYTHING
for traditional businesses This trend began with user-generated content. The first WHAT’S NEXT 2013 THE PAST wave was well underway by 2000 with Napster and 2007 Blogger. YouTube’s Now, 80% or more of the content consumed online is bandwidth equaled that of user-generated. This has caused massive disruption the entire internet across all the content creation and publishing industries, in 2001 from broadcasters to newspapers to the music industry. But the emergence of new business models that sit between traditional ownership and illegal exchange (see our trend, ‘Access is the New Ownership’) suggests that2011 the area is as much an under-exploited opportunity forAirBnB saw 500% businesses as a potential threat to their livelihood.growth in nightsbooked 2011. The past few years have seen a dramatic upswing in THE NOW peer-to-peer services, which has begun to disrupt several industry verticals including travel and transportation. Services like AirBnB, Getaround and Lyft have understandably caused much alarm amongst traditional businesses, which has contributed to political action in 2012 some areas and raised the possibility of regulation. Lyft, Sidecar Uber were each fined Peer-to-peer funding platforms like Kickstarter and $20K by the CPUC Indiegogo have also begun to disrupt the way that for alleged public businesses are created and grown, bypassing the safety violations traditional investment framework. While these platforms are facing their own challenges, Kickstarters funding success rate is far higher than many industry experts 2012 predicted, at around 45% on average and as high as 70% Crowdfunding is in the top category. expected to reach $500 million in 2012, up from $33 million in 2010. Slide 4 © Fjord 2012 | Confidential

#1 PEOPLE ARE RUINING EVERYTHING
for traditional businesses Peer-to-peer services will continue to grow, in areas of WHAT’S NEXT 2013 finance and personal services as well as the segments in 2012 which they are already substantial players. Traditional Etsy’s sales have businesses will continue to try to arrest this growth grown around 69% through legislative or political action, but the startup Year-on-Year community has come to see these kinds of challenges as 2010-11 and 2011-12. a badge of honour. This disruption will be joined by a third wave, in the area of peer-to-peer manufacturing and distribution. This wave2013 began long ago with resale and exchange platforms likeStaples will launchEasy3D, a 3D printing Ebay and Freecycle, but it has been transformed throughservice available to all craft-focused peer-to-peer platform Etsy.its customers in the Looking further, Fjord anticipates this peer-to-peerUS. manufacturing revolution to crest as 3D printing becomes accessible to everyone. We are already seeing movement in the creation and publication of peer-to-peer 3D printing plans: although fraught with legal difficulty, we 2013 expect this movement to gather momentum in 2013. Car sharing is rapidly growing in the UK and EU, with Whipcar about to close a round of funding 2013 2012 Makerbot’s TaskRabbit Replica 2 will be announces available from marketing January 2013 for partnership with less than £1800. Gap in December Slide 5 © Fjord 2012 | Confidential

#1 PEOPLE ARE RUINING EVERYTHING
for traditional businesses If you cant beat em, join em: shutting down peer-to- FJORD SUGGESTS peer services through legislative action is unlikely to be productive in the mid-term. Instead, traditional businesses will need to find new ways to remain competitive. Explore new business models that bring traditional and P2P players together through partnership or acquisition, extending the traditional business value and the peer- to-peer services reach. Well-established brands can facilitate peer-to-peer engagement in relevant areas to extend their brand value and customer relationships. Old-fashioned and controlled branding and marketing is not effective anymore. Upgrade your brand to ensure interactivity and digital are in the core brand DNA, encouraging – not fighting – feedback and peer-to-peer engagement. Slide 6 © Fjord 2012 | Confidential

#2I BELONG The past year
has seen a massive rise in the number of organisations gathering personal data from their users. There’s also been a growth in user awareness of data collection issues,TO ME mainly in Europe rather than the US. As users become more aware of what can be done with theirThe personal data battlefield information, they are beginning to demand access, and real value, in return for their data. The data exists in two forms: • Aggregate information, in which anything that identifies the individual is stripped out, enabling businesses to show broader trends and comparisons. • Individual information, which is tied to the specific person.Slide 7 © Fjord 2012 | Confidential

#2 I BELONG TO ME
The personal data battlefield Online retailers and services like Amazon, Google and 2007 THE PAST Facebook have been gathering user behavioural data for Netflix launches the years. Aggregated data drives recommendations engines, Progress Prize, $1,000,000 to anyone and personal data drives targeted marketing and who can improve their advertising. recommendation engine. The argument around use of personal data intensified during THE NOW 2012. Notable examples include the Facebook class action launched by Austrian law student Max Schrems, the pending EU legislation it has influenced, the argument between2010 advertisers, service providers and users around recognisingNike+ GPS app Do Not Track requests, and the ongoing discomfort amongstlaunches, enabling users - some surveys have indicated that users even believerunners to tracktheir data on iOS. that advertisers on Googles platform know their home address. In service terms, we have seen that misuse of information has immediate and severe impact on relationships - when Facebook began transparently posting all the articles we read through their apps, usage of these publication apps dropped like a stone almost overnight. The fact that there are so many alternatives available for 2011 virtually any service means that users are increasingly walking Citibank launches away from experiences that they find creepy or iPad app with data uncomfortable, taking their business elsewhere. enhancements. Finally, targeted advertising is less effective than true advocacy in building profitable relationships. Advocates spread the word to their peer networks, where it is far more 2012 likely to be heard than from the brand or business itself. Scandinavian operator Three makes the mobile bill visual and transparent Slide 8 © Fjord 2012 | Confidential

#2 I BELONG TO ME
The personal data battlefield EU legislation in 2013 will have an impact. Whether its rulings will WHAT’S NEXT 2013 be immediately enforced is a legitimate question, but affected 2012 businesses certainly need to start thinking about a course of State Farm Ford action immediately. team up to gather At the very least, 2013 will see dramatic growth in user actuarial data direct awareness around their data, and potentially also a series of from the vehicle. tools aimed at helping normal people manage and control who sees their data, when and how. As the proliferation of service players continues, particularly as we see more and more traction for over-the-top players in verticals like personal finance, striking the right balance between2013 data gathered and value delivered will become increasinglyUbuntu, Mozilla, critical to the success of many large businesses, notably banksTizen OS released. and insurance companies. Fjord also expects the wave of data visualisation to continue to grow, driving value and building relationships between individuals and those who help them to extract value from their own behaviours. Finally, three new mobile operating systems will arrive in 2013, and we expect at least some of these to include some level of 2013 personal data management as part of their software. EU Legislation will define privacy terms. 2013 Services like ReclaimPrivacy, Untangle, Unroll.me begin to gather steam. Slide 9 © Fjord 2012 | Confidential

#2 I BELONG TO ME
The personal data battlefield Make the most of aggregate data. It can go a long way FJORD SUGGESTS to improve your product and customer service without demanding hyper-personal information. Work to turn your customers’ data into actionable insights – for them. Transparency builds trust and lasting relationships. Be the one who makes sense of Big Data for the little guy. Design for data re-use; Allow data to be exported and aggregated, not stuck in proprietary silos. Slide 10 © Fjord 2012 | Confidential

#3DAWN We’ll soon start to
see connected devices infiltrating more areas of our lives – but this could lead to information overload for some of us.OF THE As we are confronted with more data visualisations about our lives, homes, jobs or health, we are likely to developPERSONAL whats been called chart fatigue, making it difficult to extract meaning from data that should be valuable to us. This will set the scene for what Fjord calls ‘Living Services’ECOSYSTEM – the point at which individual smart objects interconnect to form a support network for their owner. This is when aConnected objects start to take their place - set of connected objects becomes greater than the sum ofright by your side its parts: your ‘personal ecosystem’.Slide 11 © Fjord 2012 | Confidential

#3 DAWN OF THE PERSONAL
ECOSYSTEM Connected objects start to take their place – right by your side In the early days of smartphones, the range of available WHAT’S NEXT 2013 THE PAST services was extremely limited, often based on the capabilities of the device, or on the restrictions of the 2008 mobile service provider. i0S App Store But since the concept of an app store was taken into the Android Market mainstream, users have increasingly been building their launch own personal app ecosystems made up of whatever they personally believe is useful and important. While Apple keeps a tight rein on whats allowed in its App Store, users in general have far more control over2011 their software than ever before.i0S App Store reaches 500K The personal ecosystem, developed by the app storeapps THE NOW mobile experience, is migrating into the physical world. The past 18 months have seen the beginnings of mass- market adoption for a select few connected objects, driven by the services that make them meaningful. Nike Fuelband and Jawbone Up are two examples from the wellness sector, while Nest is a connected home example. Looking at Kickstarter, the next 12 months should see an 2011-2012 explosion of connected and smart objects spanning a huge Jawbone Up, Nike+ Fuelband launch range of technologies and applications. At the same time, some telcos are beginning to measure their revenue in terms of account (ARPA) rather than by device or by single user (ARPU). This means theyre taking steps to combine their views of customer behaviour across devices and contexts, building a picture that could be used 2012 to create a business and technical infrastructure to support Verizon launches Living Services. “Share Everything” Slide 12 © Fjord 2012 | Confidential

#3 DAWN OF THE PERSONAL
ECOSYSTEM Connected objects start to take their place – right by your side As more and more objects come onto the market, over- WHAT’S NEXT 2013 the-top data services will begin to form around them to drive increased value. 2011 The earliest of these are likely to be wellness-driven GreenGoose launches (like Tictrac), or focussed on finance. In the near term, the first consumer- however, individual users will still have to engage with centric sensor kit multiple services and touchpoints to get the value of their things. There will also be a rise in single-purpose objects that foster intimate relationships between people: one example is the Good Night Lamp, which makes its debut at CES in 2013.2012 We are beginning to see a lot of innovation come fromTictrac enters betalaunch smaller, crowdfunded players and component companies. We may also start to see plug-in hardware that will extend the lifespan of a handset in the next two years – BTLE technology means that a sensor can run for a year on a single battery, making these small devices far more viable than ever before. The battle for the wrist will hit the mainstream in earnest in 2013, with a variety of approaches coming to 2011 market focused on everything from health and wellness Macaw launches on to information and entertainment. iOS Android 2012 ToyTalk (founded by ex-Pixar employees) 2013 secures $11.5M in Good Night Lamp funding to launch at CES Slide 13 © Fjord 2012 | Confidential

#3 DAWN OF THE PERSONAL
ECOSYSTEM Connected objects start to take their place – right by your side Designers need to increasingly focus on designing for FJORD SUGGESTS the glance. Service-based businesses can help users tie together elements of their object ecosystem to extract further value. Interactions should be segmented into things that are best done and seen on small dedicated devices, and things best done on the smartphone that they inevitably will connect to. Objects that fit naturally into people’s lives will be the big winners in this wave, if they can be simple and appealing while adapting to users’ habits and priorities. Slide 14 © Fjord 2012 | Confidential

#4KEEP IT As digital progress
marches on, so does complexity. Ever-increasing volumes of data constantly threatenSIMPLE the efforts of service designers to create elegant, focused, and simple solutions. But at the same time, more organisations are findingSTUPID that a focus on simplicity can have a transformative effect on services and businesses alike.Good old-fashioned K.I.S.S. principles As Albert Einstein said: “Everything should be mademake a comeback as simple as possible. But not simpler.”Slide 15 © Fjord 2012 | Confidential

#4 KEEP IT SIMPLE STUPID
Good old-fashioned K.I.S.S. principles make a comeback Simplicity has a long track record of success. Ikeas WHAT’S NEXT 2013 THE PAST bare-bones proposition of modern, simple products at affordable prices has made it one of the worlds leading retailers. Zipcars straightforward and flexible offer led PRE-2000 to extremely quick adoption of an entirely new Ikea, Netscape, transport proposition. Google In the digital world Skype was able to gain huge global market share with an unprecedented proposition because they made the service incredibly easy to2003 understand. And every web browser still shows its basisSkype is founded. in Netscapes simple browser controls, while GoogleSince, it has become search disrupted the search-and-portal world with itsthe largestinternational voice ultra-minimalism.carrier. Other examples include Amazon’s One-click shopping, and the Apple Touch iOS, which revolutionised mainstream mobile interaction by taking it from indirect to direct response. Some users have started to complain that they feel THE NOW overwhelmed by the omnipresent digital world. 2010 ‘Slow Living’ and ‘Slow Food’ were just two examples of Slow Living lifestyle the backlash against our high-velocity digital lifestyle. and philosophy Now we are also seeing that single-purpose apps and brand founded services are gaining ground, feeding a desire for simplification. Examples include how Square created a $3 billion 2010 company in under three years through simplification of Square launches in January. Less than 3 the bureaucratic process of becoming a credit-card years later, the merchant. Or how Bank Simple has changed the company is valued conversation in the banking sector. at $3 billion. Slide 16 © Fjord 2012 | Confidential

#4 KEEP IT SIMPLE STUPID
Good old-fashioned K.I.S.S. principles make a comeback As personal ecosystems grow, so does the WHAT’S NEXT 2013 challenge. We will need to make meaning of more 2012 data from more sensors, public, private and Misfit Shine, the quarter-sized corporate, and the simplest solutions will continue personal activity to win. tracker, announced to critical acclaim. Leaders in simplification will continue to disrupt and transform. As choice and options multiply, solutions and companies that can guide users through the mess will have an opportunity to become trusted advisors.2012 Dropbox grows toover 100 millionusers worldwide 2012 PayPal announces reorganisation around the principle of Simplicity Slide 17 © Fjord 2012 | Confidential

#4 KEEP IT SIMPLE STUPID
Good old-fashioned K.I.S.S. principles make a comeback Focus on what can be removed rather than what could FJORD SUGGESTS be added. Make sure every single feature, element, and interface drives real value for the user. Be ruthless about prioritization. Bravely go to the pain threshold that separates “extremely simple” from “plain dumb”. Use mobile as a primary tool to drive simplicity across products and services. Apply the principles of simplicity internally: how could your teams, your structure, be leaner and more effective? Take action to simplify internal communication and ways of working, and this will enable you to reflect that simplicity outward as well. Slide 18 © Fjord 2012 | Confidential

#5REVOLUTION Personalisation is nothing new
in the digital world, but comparatively few shopping services actually feel close to the individual. Fjord expects this to change in 2013, as the online and offline retail environments continue to merge, creating a more holistic and immersive customer experience.IN RETAIL Mobile payments have definitely been disruptive in 2012, with a huge rise in the number of transactions made on mobile - but the changes we’ll see next areThe Online/Offline distinction disappears about far more than just mobile payments.Slide 19 © Fjord 2012 | Confidential

#5 REVOLUTION IN RETAIL The
Online/Offline distinction disappears Personal service was the promise of the independent WHAT’S NEXT 2013 THE PAST local shop for the better part of the 20th century. Even now, consumers feel deep loyalty to the sellers who recognise them, get to know them, and help them PRE-2000 discover the best deals on suitable merchandise. Local shops, Amazon, We’ve seen these interactions mirrored in the digital Netflix world with Amazons and Netflixs highly-regarded recommendation engines. Suggestions for shopping have become the norm in the online world.2010 As the Internet went mainstream, peer-to-peer reviews also began to inform shopping, while price-comparisonRedLaser is engines play to our desire to get the best deal.Guardians ConsumerApp of the Week A statistic to strike fear into the heart of any retailer: half THE NOW of US smartphone users have used their devices in-store, and more than half of those have gone on to abandon their in-store purchase. For smartphone users, the distinction between online and in-store shopping has all but disappeared. 2010 The mobile payment disruption we saw in 2012 has led to Starbucks announces the additional side effect of shared retail spaces in some partnership with European cities, giving independent merchants Square unprecedented access to the purchasing public. Apple has reinvented the in-store experience, transforming it from traditional shop to showroom by eliminating the need to queue at a till. Now that geofencing technology has opened the door to 2012 completely frictionless payment and location and ambient Apple launches fully data make it possible to hyper-tailor services, there is a DIY shopping in US big field of opportunity and risk. Slide 20 © Fjord 2012 | Confidential

#5 REVOLUTION IN RETAIL The
Online/Offline distinction disappears Fjord believes the key to retail success lies in creating WHAT’S NEXT 2013 experiences that make customers feel better. A 2012 shopping experience that feels smarter or easier can be EU chain DM begins more valuable for many customers than simply getting offering customers e- the best deal. receipts for in-store purchases Key factors that ensure success are increasingly going to be based on recognition, recommendation, follow- through, and support. The penetration achieved by new mobile payment systems, as well as the ready availability of mobile2012 devices, will kickstart a revolution in in-store customerCA testsFacebook Like service. Shop staff will be equipped with tablets orhangers in Sao smartphones to deliver improved individual service.Paolo Opt-in location based services will help customers find precisely what theyre looking for, when theyre looking to buy, and will enable them to pay on the spot without queuing. 2013 will see the introduction of frictionless payment in more markets around the world, with security and shrinkage challenges arising from this 2012 technology. Neiman Marcus to Virtual shops will take hold in the physical world, with equip sales staff with smartphones grocery aisles on train platforms and social network ratings on hangers. We will also see QR codes and other buying methods in more shop windows and restaurants, opening entirely new revenue streams for some while extending shopping hours for others. 2013 These changes will see customers move closer to Tesco to launch effectively managing their shopping lives, in similar ways virtual grocery at to how recent technology shifts have given them new Gatwick Airport powers over their social lives. Slide 21 © Fjord 2012 | Confidential

#5 REVOLUTION IN RETAIL The
Online/Offline distinction disappears Design commerce services that make use of smartphone FJORD SUGGESTS sensors and contextual data – camera, gyroscope, time of day and location. Design innovative and simple solutions for small merchants. This is a big group of merchants, yet they are not digitally savvy at all. Inventory management, customer relationships, loyalty solutions, digital storefronts – these can be life-changing services for small merchants. Businesses that team up with local independent merchants and makers (both online and offline) can drive value within the local economy. Providing a memory of a customer’s past purchases can help small and large vendors alike develop the kinds of relationships only small boutiques traditionally have, with face-to-face recommendations that are more effective than digital ones. Re-imagine the boring things and make them engaging. As PayPal and Square have shown, even something as painful as paying can be pretty cool! Slide 22 © Fjord 2012 | Confidential

#6ACCESS We’ve seen seismic shifts
in the area of digital distribution of music, movies and media in every form. Now, as individuals increasingly consume media across devices, they expect their purchases to be available on multiple platforms, no matter what.IS THE NEW Likewise, in the past we used to project our status and success through the things we own – the car in the driveway, the holiday home, our media collections. ButOWNERSHIP increasingly status is now projected through our experiences and pursuits, and consequently access and flexibility – rather than traditional ownership – areWhat does it mean to own somethingin the digital age? growing central to what we crave.Slide 23 © Fjord 2012 | Confidential

#6 ACCESS IS THE NEW
OWNERSHIP What does it mean to own something in the digital age? Music was the first industry to feel the bite of P2P WHAT’S NEXT 2013 THE PAST sharing from Napster onwards. Next came audio- visual content (TV and Film), which has been the 2011 topic of much legal action over the past few years. Megaupload, Megavideo Timesharing property used to be seen as a slightly RapidShare receive downmarket way for the less wealthy to access over 21 billion visits/yr property in desirable areas. In Europe and a few American cities, short-term holiday lettings began in the early 00s but didnt begin to catch on until much later.2011 Spotify has proved that consumers are willing to pay to THE NOWHulu sees 60%growth from 2010, rent music if they feel theyre getting a valuable service.with 1.4m paid But this is a totally different model to the traditional CDsubscribers distribution business, and record labels are still struggling to get to grips with it. Yet despite the fears of music industry executives, statistical evidence continues to show that people who download and share the most music also buy substantially more of it. 2012 Though DVD sales continue to dominate, rent and borrow Spotify grows to more than 15m active services are on the rise. Services like Rent the Runway, users, of which 4m Lending Luxury and others have extended this model to are paid subscribers the fashion industry, and ValoBox and Total Boox are taking it into publishing. And of course, services like AirBnB, 9flats, Getaround and Lyft are making flat-sharing and car- sharing mainstream. New entrant Jetsetter is helping to 2012 turn the concept of a luxury second home or family holiday AirBnB launches Wish on its head. These current shifts show how new forms of Lists to let users curate their ownership are beginning to exert their influence on aspirations consumer behaviour. Slide 24 © Fjord 2012 | Confidential

#6 ACCESS IS THE NEW
OWNERSHIP What does it mean to own something in the digital age? Users will continue to see value in portability. As WHAT’S NEXT 2013 they possess more devices with which to consume 2010 content, they increasingly expect to be able to Bag Borrow or Steal consume that content whenever and however they combines rental with private sales of want to. designer luxury The rise of subscription and streaming services accessories has also spawned the beginnings of a pay as you go mentality among content consumers.2012 Innovative new services will see content ownersMicrosoft files a generate increased revenue based on usage. Forpatent for Kinect to example, Microsoft’s Kinect technology could becount the people ina room used to charge for movies based on the number of people in the room. Simultaneously, the growing trend of clothing and accessory rental, resale and swap platforms will see its peer-to-peer and professional aspects grow rapidly, as people band together to enable themselves to pay for what they want to wear, for only as long as they want to wear it. 2012 Total Boox announces pay-for-read model for books 2012 Several car sharing services in Europe are growing fast, and Whipcar is about to close a new round of funding Slide 25 © Fjord 2012 | Confidential

#6 ACCESS IS THE NEW
OWNERSHIP What does it mean to own something in the digital age? Are you in the selling or the access business? Companies FJORD SUGGESTS could design clear access models, like rental, trading, and leasing, and make ownership a standard “upgrade” across categories. What areas of peer-to-peer exchange could you have permission to mediate, facilitate or add value to? Include a variety of status-boosting elements in ‘access’ services. For example one-click experience capture for outdoors adventurers, easy experience sharing through social media networks, and ‘insight’ sharing for those who prefer to project their intellectual adventures. Create an “API for commerce” by atomizing your catalogue or offering. This could allow third parties to distribute your content. There are lots of opportunities for new business models in publishing. For example, if a customer buys a physical book, why shouldnt they be able to take a few chapters along on a smartphone or tablet when they travel? Slide 26 © Fjord 2012 | Confidential

#7 In recent years we’ve
seen a shift away from learning as something that only happens through pairing teachers with students in traditional classrooms. Innovations such as learning via video instruction, or online courses from prestigious universities, are now available anytime and anywhere to anyoneLEARNING with an Internet connection. The next stage of transformation is already taking shape. FjordGETS believes this will involve highly personalised and adaptive learning materials. In addition, we’ll see the methods of delivery move from one-to-many to many-to-one.PERSONAL Ultimately, this kind of real-time adaptive learning support will transition into the broader business context. Some of the radicalHow being online is transforming changes we’ve seen in education and learning are set to becomethe way people learn part of our working lives.Slide 27 © Fjord 2012 | Confidential

#7 LEARNING GETS PERSONAL How
being online is transforming the way people learn Most classrooms are still like the classrooms of 100 years WHAT’S NEXT 2013 THE PAST 2010 ago: a single teacher teaching many students with The Aspen Institute in classroom props and textbooks. Learning involves reading conjunction with the as well as a lot of memorisation and practice sheets. Knight commission publishes Digital and While many schools gradually allow students to use online Media Literacy: A Plan tools, emphasis continues to be placed on memorisation of Action of facts. Some students find this easy; others are sometimes left behind. Students with different learning styles are difficult for instructors to address. The Khan Academy is a non-profit organisation that has THE NOW2011 been hugely successful with its website, supplying a freeOpen University online collection of more than 3,600 micro lectures viareports over 50,000overseas students video tutorials. Today there are many examples of this on demand approach to learning. Massive open online courses (MOOCs) that combine education, entertainment, and social networking are growing at an amazing pace. Universities around the world are opening their virtual doors to remote learning, and eventually online certificates may translate into some form 2012 of university credits. Khan Academy has The Open University currently has over 250,000 students, delivered over 200 more than 50,000 of which are overseas. McGraw-Hill and million lessons Coursera have launched huge initiatives to deliver fully digital course materials to tablet devices. Many experts predict these changes will lead to the 2012 disappearance of textbooks within the coming decade. McGraw-Hill reports a 20+% increase in both attendance and retention with its Connect® programme Slide 28 © Fjord 2012 | Confidential

#7 LEARNING GETS PERSONAL How
being online is transforming the way people learn As the digital model continues to evolve, Fjord WHAT’S NEXT 2013 anticipates that students will have access to an ever- 2012 broadening array of instructors, enabling them to Harvard University and personalise their learning and transforming the one to the Massachusetts many model of teaching forever. Institute of Technology found EdX MOOCs without person-to-person experiences that happen on campus will raise questions about the more social aspects of higher education, such as the process of collaborative learning, and individualized support.2012 At the same time, data mining on student learningCoursera reaches patterns enabling real-time adaptive curricula suited tomore than 1.7 million individual learning styles and interests will become— growing “faster mainstream.than Facebook” The definition of digital literacy will expand from merely conducting effective searches and evaluating the results, to include reading and making meaning from individual data and new forms of writing or 2012 composition with mixed media. Human Face of Big Data is published as a global snapshot of the worlds transformation through data. Slide 29 © Fjord 2012 | Confidential

#7 LEARNING GETS PERSONAL How
being online is transforming the way people learn Big opportunities are emerging to deliver highly FJORD SUGGESTS personalised instructional material to students. Recommendation engines will suggest individualized pathways for learning from the web. As the new learning technologies reach scale, all education service touchpoints will need to be reimagined as a part of the overall service delivery. Creating a productive physical, digital, and social environment will become a critical differentiator for prestigious institutions entering the space. Businesses can adopt adaptive learning practices in the workplace, making the work done by individuals a part of their personal equity and that of the organisation. Making this happen will require improved collaboration tools. Slide 30 © Fjord 2012 | Confidential

#8YOU TALKING In many ways,
it’s logical that the next frontier for interface disruption should be the voice. But prodding and poking objects is somethingTO ME? we’ve always done, and talking to thin air has always been a sure sign of a crazy person. Voice Exploring new challenges in human-machine services are still not taking off as rapidly as they communication should. What will it take to make voice interaction compelling enough to make people want to integrate it into their daily lives?Slide 31 © Fjord 2012 | Confidential

#8 YOU TALKING TO ME?
Exploring new challenges in human-machine communication Companies have been exploring voice input for WHAT’S NEXT 2013 THE PAST decades—from the sultry Wildfire virtual secretary to Apple’s Knowledge Navigator, the promise of voice control has long overshadowed its reality. Over the 1990 past five years, touchscreen and mobile interactions Virtuosity Wildfire have become the norm, leading to hugely heightened virtual assistant expectations around responsiveness and instant gratification. Apple and Google are learning through their THE NOW experiments. Siri and Google Voice Search are battling it2007 out in the smartphone marketplace, with Siri positionediPhone introducesmass market touch as a helpful assistant with amusing faux-human traits,interaction and Google Voice Search positioned as a lightning fast and somewhat geekier expert search-bot. The problem is that without a solid understanding of the immediate context and intent of the user, today’s voice services still come across as either not contextually aware enough – or simply not intelligent enough in the case of Siri. Google Now is a contextual dashboard that displays just-in time relevant information to you based on your activities across your Google services or accessible 2010 information on your device, such as your calendar. Some Apple launches Siri users consistently report that context awareness and hyper personalisation without explicit permission can feel creepy. 2011 Google Voice Search launches Slide 32 © Fjord 2012 | Confidential

#8 YOU TALKING TO ME?
Exploring new challenges in human-machine communication The future will hold not only great voice WHAT’S NEXT 2013 recognition and interpretation, but as more people use these systems they will have more data, and thus be able to more effectively anticipate context 2012 and intent. Chevrolet adds Siri to in-car systems We’ll begin to see new services that listen in the background with explicit permission and deliver genie-like wishes for everything - from a casually mentioned book to the address for a San Francisco restaurant that reminds us of a loved2012 one in London - and prompts accordingly forNuance announcesNina™ personal orders or reservations.assistant with open As systems gain their users’ trust, the next level ofSDK intelligence could come by integrating with the data from the apps that reside on an individual’s device. 2013 will see voice services popping up more prominently in more contexts—transportation, 2012 healthcare, financial services and education. Voice Haiku for iPhone integration will become a must-have for enables medical smartphone and tablet applications, and professionals to voice- input health data voiceprints will emerge as a new kind of personal signature. This is a future where the service that wins will be the one that appears to be the most personal, responds the most quickly and appropriately, and 2013 simply ‘feels’ the most human. Microsoft to add Tellme Natural User Interface to its family of products Slide 33 © Fjord 2012 | Confidential

#8 YOU TALKING TO ME?
Exploring new challenges in human-machine communication A large part of online customer self-service activities FJORD SUGGESTS will be done with the help of virtual assistants soon. No business can afford to ignore the voice dimension for much longer. Designing for voice interactions is a key component of service design, starting now. There is a huge opportunity to create value by voice- enabling the day-to-day tasks of people who benefit from being hands-free. While gestural interfaces may come in time, these are more difficult to implement. Voice interactions are far more natural, particularly as many mobile devices are already voice-dominated channels for their users. Slide 34 © Fjord 2012 | Confidential

#9THE The speed of movement
to mobile has amazed everyone. But it has not been matched by the speed with which most organisations are able to monetize it. We’ve gone from analogue dollars to digital dimes and now to mobile cents. This is creating a commercial gulf that is going to put pressure on cash and funding for many new mobile ventures,MOBILE simply because the average revenue per user has a clear tendency to drop when a product is wholly or primarily mobile.GAP Into this volatile mix we can now add tablets and 4G in many markets next year. The search is on for business models and enablers, and it’s likely some will come from the developingBusiness plays catch-up with world.adoptionSlide 35 © Fjord 2012 | Confidential

#9 THE MOBILE GAP Business
plays catch-up with adoption As the web went mainstream in the 1990s, some WHAT’S NEXT 2013 THE PAST commercial success stories emerged quickly (Amazon, eBay) and some evolved a little later (such as Google). PRE-2005 When mobile data emerged, it was seen as a subset of the connected desktop. But as smartphones have WAP info services developed, we have shifted to an increasingly mobile- first perspective and the minimal engagement of the early WAP services seems like ancient history.2010 Eric Schmidt With rising global smartphone adoption, many THE NOWannounces Googles businesses are looking at mobile as the primary channelMobile First for customer acquisition and relationship building, withstrategy at MWC2010 desktop services as secondary. However, in the developed world, Fjord believes that many of us still think of these mobile services as extensions of the desktop service. This limits us to the business models that already exist. Some iconic mobile start-ups like Foursquare, Twitter and Instagram still do not have a viable business model. Facebook has famously seen a decline in value due to its perceived inability to get to 2012 2012 grips with mobile. Zynga’s average revenue per mobile PayPal transactions Facebook stock loses up 195% on Cyber over 30% of its IPO user is only a fifth of a desktop user’s. And tablets are Monday 2012 value in 6 months mixing things up further. By the end of 2013, one in four US adults will own a tablet – it took the mobile phone 16 years to reach that. Some companies are getting it right. For example, PayPal will process $12bn in mobile 2012 transactions in 2012. Some of the most successful Citibank puts iPad players in mobile are banks or transaction-oriented service at the heart players, who have reported that mobile users are among of its advertising their most profitable customers. story Slide 36 © Fjord 2012 | Confidential

#9 THE MOBILE GAP Business
plays catch-up with adoption In 2013 we are likely to see an intense focus on WHAT’S NEXT 2013 how to make mobile devices pay for most service companies. Wallet initiatives will be at the centre 2013 of this, but expect also innovation in mobile Hardware innovation discovery both from the major platform owners slows: new phones fail (Apple Store and Google Play) and independents to excite like Flurry. We will see an increase in entirely new services and business models driven by mobile-first or mobile-only engagement.2013Households in US At the same time, developing countries (notablyand Europe reach Kenya, Brazil and India) have seen massivean average of 7+ innovation in business models that leverage mobileconnected devices technology. 50% of Kenyas GDP moves through mobile, and most Africans experience the Internet first on a mobile phone. In Kenya, Sudan and Gabon, more than half of adults use mobile money. 2013 Opera acquired for HTML 5 skills by OTT giant 2013 Mobile TV companion apps go mainstream (GetGlue, Zeebox), revenues uncertain Slide 37 © Fjord 2012 | Confidential