1. Smart Home: Beyond Technology
Envisioning 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
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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 & Sullivan
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5. Smart Home: Major Themes
Telemetry: Home Networking:
Utilities, Healthcare, Distribution, Management,
Security Control and Automation
Communication 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 home
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7. Challenges
Back
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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 infrastructure
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9. Consumer Uncertainty
Would you be interested in a smart home?
Don't know Yes
28% 29%
Would you be willing to pay extra
for 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 Ecosystem
Back
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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 example
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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
ecosystem
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16. Business Model Options
Back
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17. Trends, Opportunities & Unmet Needs
Relevant 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
Home
Networking
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
capabilities
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21. Case Study: Verizon Whole Home Monitoring and
Control
 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 parties
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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
monitoring
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23. The Way Forward
Back
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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 services
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25. For Additional Information
Daniel Shepherd
Vice President, ICT
daniel.shepherd@frost.com
M: +7 915 043 4460