Connected Things market, Samuel ROPERT Senior Analyst M2M/IoT, IDATE, DigiWorld Summit 2014, 19 November 2014

1. Connected Things Forum
Connected Things market
Samuel ROPERT
Senior Analyst M2M/IoT, IDATE
19 Novembre 2014

2. 2
Internet of things :many different concepts and markets
under one umbrella
Primary value
without
connectivity
Primary value
from connectivity
(can be in real time or
differed through sync)
Direct
connectivity
Machines
or specific hubs
M2M
Connected cars, smart meters,
alarms, point of sale, remote
health monitoring…
Connected Information
Devices
Indirect
connectivity
Through an
information device,
typically
a smartphone
or STB
Internet of Objects
Supply and retail chains (RFID,
NFC, QR Code)
Second screens
Wearables & gadgets
Activity trackers, fitness gadgets…
Source: IDATE

3. Reality check
Interests for being connected
Wearables: Quantifying self is not
recent
• Connectivity allows it to do it more
efficiently, more accurately
Connected home
• Costs savings through better energy
management
• Security
• Smarter products making life easier
Main drawback : the price!!
• Ratio 10:1
Connected
Non connected
VS
Connected
Non connected
VS

4. Reality check
Mass market or niche for the new connected objects ?
European smart home market by end-user segmentation, 2013
24%
8%
3%
4%
1%
Still a niche market in short and even in the medium term !!
18%
12%
10%
Luxury villas
Mid-range houses
Mid-range appartments
Zero/low energy homes
Assisted homes
Other commercial buildings
Hotels
Luxury appartments
11% : the majority of
the housing !!
Almost 80% of
people is not
enthusiastic !!

5. Business model evolution
How to reach mass market?
• Need to trigger a virtuous circle
> To make the price lower !
> Financial incentives
• Subsidies-based model with Telco involvment?
> As for connected devices such as tablets and
smartphones
• Discounts from data monetization ?
Virtuous circle for high adoption level
Recurring fees
One-shot fees
Recurring fees
One-shot fees
Source: IDATE Source: IDATE
MNO
Wearable
maker
Application
provider
End user
MNO
Wearable
maker
Application
provider
End user
?
Subsidization model for cellularly-connected objects
Higher
adoption
Higher
volume
Lower
price
Source: IDATE
Source: IDATE

6. Telcos involvement?
TIMEX and AT&T agreement
• High end watch embedding SIM card
• Phone-free messaging, live tracking,
and convenient upload
> with 1-year of wireless data
connectivity included.
TIMEX business model description (before 1 year)
Source: IDATE
TIMEX business model description (after 1 year)
Recurring fees
One-shot fees
Recurring fees
One-shot fees
One-shot fees (completed)
Source: IDATE

7. Data monetization Data resale business model
On the product side
• Resale of data generated by the
objects
- Discount on the device cost
- Discount on the consumer bill
• Already some vertical
industries very interested
- Insurance at first
Wearable maker End user
Vertical industry
Source: IDATE
players
Discount in EUR
on the device cost
Data
Discount in EUR
on the end user bill
OR
Traditional deal configuration
Data purchase
Device
purchase
New deal configuration
On the cloud
• Analytics
• Big Data techniques
> Provide new data (even applications)
based on the collected data
> Monetize these new data/applications
Transforming data into cash

8. Privacy and security issues
Personal data and their impacts for final user
• More and more data will be generated and some of
it is very personal
• What are the legal constraints and the legal
framework on identifiable data?
- On anonymized data?
• Can data generated turn against him?
- Average heart pulse when running is not very critical for the user in
terms of privacy
- But knowing the user goes for a 2 hours run each Sunday at 2pm in
the same park could be an issue
• What are the reactions of the user face ongoing
initiatives?
• Is it possible to give more control to the user without
stifling innovation?
Internet of Things Top Challenges
Source: Janco Associates