The Current Situation of the Networked Home Market - Overview of International Activities

Dr. Susan Schwarze VP Marketing and Board Member, OSGi Alliance Marketing Director, ProSyst Software

•  Short introduction of the OSGi Alliance and its technology •  General Overview of the current status and future trends

–  North America –  Europe –  Asia

•  Recommendations

Agenda

•  The OSGi Alliance is an open organization –  Established in 1999, members worldwide –  Membership spans many industries –  Voting members treated equally –  Membership information available at www.osgi.org

OSGi Alliance

IT Providers ISV

Device Manufacturers

Service Providers

Developers

Auto Makers

Solution Providers

Others

The OSGi Alliance

•  Many devices can run the same applications despite their differences in hardware, capacity and performance –  The dynamic module system for Java™

•  Modular, service-oriented architecture •  Defined interfaces •  Device Interoperability •  Future-proof platform

–  Connectivity, easy upgrade and extension –  Universal Middleware

•  Deployments worldwide by Fortune 100 companies

OSGi Vision and Technology

Hardware

Bundle Bundle

Bundle

Operating System

OSGi Java VM

Bundle (Application)

Driver Driver Driver

= service interface exported and imported by bundles

Mass Market Consumer Requests •  Low pricing •  Simplicity •  Safety and security •  Added value

–  Remote device control –  Service bundlings –  Future proof solutions

•  Design adaptibility

Status quo in the networked home market •  Multi-media content

–  Different sources/data, location and access of content –  Traditional content provision over internet does not scale (IPTV)

•  “Internet of things” –  Heterogeneous networks and device accesses –  Complex device and network configuration and management –  Isolated service solutions, like Google, Yahoo etc. –  Slow shift to user-centric creation and consumption environment

•  Networked home environment –  Monolithic solutions –  Complex user interfaces

•  Network infrastructure –  Competing wired and wireless network solutions

•  Business Models –  First steps/offers –  Monolithic solutions

Broadband access vs. low networked home rate •  226M broadband users worldwide in 2006

- 170M additional subscribers by 2010 •  Networked homes worldwide in 2006 (The Diffusion Group, 05)

–  USA 17% (~51M homes) –  Japan 16% (~ 20M homes) –  Germany and Korea: 2% (~ 1,6M and ~1M homes)

•  Significant increase in home networks expected –  2004: 35M / 100M installed devices (TDG)

–  2008: 97M - 160M / 1bn installed devices (In-Stat,04 vs. TDG,05) –  Germany (38% in 2011; ~ 31M home networks)

The heat is on … "The fight between cable operators and phone companies is heating up as attention turns from the triple-play offering to the quadruple play, a service bundle that includes high-speed data, telephony, TV, and now wireless." (CNET News.com)

–  Triple Play totaled $535.0 million in 2005 and is expected to reach $755.6 million in 2012. (Frost)

•  Actors –  STB vs. Residential Gateway

•  Cable operators and phone companies –  Internet / Web 2.0

•  Content providers, like Google or Yahoo •  SW providers, like Apple or MicroSoft

–  P2P •  Content providers, like Warner Bros. or in2movies.de

Global Development - STB and Hybrid Gateway

Gerry Kaufhold, In-Stat 2006

Development in North America •  Dominance of cable providers

–  High volume of Pay-TV STB and related services –  2009: 36M devices

•  Key driver: entertainment –  Convergence of Pay-TV, internet and mobile services, Web 2.0, e-mail, SMS, IM –  2010: 30M entertainment home networks (Parks Associates, 06)

•  Home networking goes with broadband –  50 to 60% of broadband customers have home networks (Parks Associates, 06) –  US regulation: The 1996 Telecommunications Act

•  Proprietary products (smarthomeusa.com; Cisco et al.) •  US Plug&Play agreements between cable operators and CE manufacturers •  “CableHome” certificate (QoS, DRM, simple navigation) plus triple-play

–  Industry collaboration: CABA / IHA (Mealtime pilot; IPTV Phase II) •  Market Volume:

–  2008: 33.3M home networks (In-Stat, 04) and 2012: 63.8M home networks (Frost, 06)

Development in Europe •  High competition between the various actors

–  First solutions in the market •  White goods, CE, triple-play offers •  Additional interest in energy, e-health and monitoring services

–  Open for hybrid STB •  2009: Between 12 and 14M devices each (Pay-TV; Digital Terrestrial, RG)

•  Convergence with key driver entertainment –  EC funded projects (6th program “Ambient Intelligence”/ “Enabling Technology”:

3.625bn Euro) •  TEAHA, AMIGO, ePerSpace, MEDIANET etc. •  CENELEC SmartHouse Program (code of practice), ETSI

–  Industrial collaboration •  OSGiA, HGI, NEM, DLNA, UPnP, KNX etc.

•  Market volume: •  2008: ~ 22M home networks (In-Stat, 04) •  Germany 2010: Euro 13.3bn for home networks in total (Soreon Research, 05)

Development in Asia •  Simple PC networks with broadband access

–  Declining pricing, higher data transfer, governmental support, more complex home networks

•  First solutions in the market –  White goods, CE, first triple-play projects

•  Additional interest in energy, e-health and monitoring services –  Open for hybrid STB

•  2009: Pay TV STB and RG devices (19.5M and 18.6M) •  Push factors

–  Societal aspects –  Olympic Games 2012

•  Market Volume: –  2008: 35.5M home networks (In-Stat, 04) –  2009: US$ 21 bn for home networks (In-Stat, 06)

Development in Asia – Japan & South Korea •  Japan

–  Rapid spread of broadband and increasing interest in technology •  ECHONET, DLNA, UOPF, OSGiA, RFID

–  First product launches, white goods series based on ECHONET •  Leading Toshiba: Feminity Series: 2500 products since 2002

–  First networked home trials (ICT home) –  Rising interest in entertainment and anticipated export to Chinese market

Divergent forecasts: 5M networked homes in 2015 / 30M in 2010 •  South Korea

–  Up to 90% of the population will have home networks in 2011 (44,1M) –  Rapid spread of broadband and increasing interest in technology

•  Web 2.0, OSGiA, DLNA, HNCP, ECHELON, RFID/USN –  Strong interest in entertainment services

•  Internet and mobile phones as the main access points - especially for the younger generation

–  Strong governmental support for building automation (Dig.Media City/U-Port)

Japan - Next Generation “ICT Home”

Service Providers

B B

B B

B B

Home Appliance System

Sensor System

PC System

Audio-visuall System

Service Gateway

OSGi Framework

ＰＩ B

Center System

OSGi Service Aggregation Platform（OSAP）

External Access

NTT Extension

B B B

B B

Network (FLETS, OCN, NGN, etc.)

Control

Bundle

Telco System

South Korea – Digital Media City / U-Port •  Part of Digital Media City

–  20-story IT center to open in Seoul by 2007 –  Research and development hub for the international IT industry –  IT center to attract multinational IT enterprises and R&D firms in Seoul by

2007 –  Total office space of 19,140 square meters,

•  Designed to offer comprehensive support facilities, incl. a joint manufacturing facility to help save equipment expenses

•  U-Port –  Project: KT & City of Busan –  Expectation: US$ 15 bn market and 610,000 jobs by 2010 –  Ubiquitous tracking and management of cargo –  Intelligent traffic control system –  U-Convention Center for visitors

Conclusions •  Emerging market with high revenue forecasts

–  Fierce competition, declining pricing, higher data transfer, broader variety of connecting devices, more complex home networks

•  Divergent governmental support •  Pay-TV STB in North America vs. hybrid STB in Asia and Europe

–  Additional service offerings •  Broadband stimulates home network market

–  Key driver entertainment •  Content mobility •  Seamless integration of different sources on heterogeneous devices •  User-centric session based services

•  Hurdles to overcome: –  Complexity and heterogenity –  Extended home environments (family federation, variety of lifestyles) –  Safety and Security –  Pricing

Recommendations Foster development of services/applications and offer service bundling

–  Entertainment •  Audio/Video: today still low consumer involvement

–  Health Care •  Interaction between hospital/doctor, pharmacy and patient

–  Office •  Access of information in different environments using diverse devices

•  Foster security and safety –  Protected privacy vs. remote control/administration –  Flexible security mechanisms

•  Dependent on scenario and communication partner •  Improve ease-of-use

–  Elderly and disabled people –  Mass market

•  Flexible solutions that are future-proof –  Modular assembly (HW/SW) instead of monolithic product solutions

•  Cost- and time effective development •  Integration of today`s islands

–  Universal middleware –  Business concepts

•  Regular checkups –  Added value –  Pricing –  Simplicity

•  IP flow /Patents –  Establish a joint IP policy for all work products where public funds are used

•  Uniform and fair royalty payment system OR •  Code: Apache 2.0 licensing / Specifications: Royalty free declaration

Recommendations

Thank You Dr. Susan Schwarze

VP Marketing and Member of the Board mailto:s.schwarze@prosyst.com

OSGi Alliance�Bishop Ranch 6�

2400 Camino Ramon, Ste 375�San Ramon, CA 94583�

Phone: +1.925.275.6625�FAX: +1.925.886.3696�

www.osgi.org

Future trends •  Multi-media content

–  Content mobility –  Seamless integration of different sources on heterogeneous devices

•  Open to different network technologies/protocols (abstraction layers) •  “Internet of things”

–  Fixed-mobile convergence / networked mobility –  User-centric session-based services –  Multi-provider

•  Extended Home environment –  Broader variety of lifestyles –  Family federation –  Uniform and user-friendly interfaces –  Flexible solutions on demand (“roaming”)

Future Trends (ctd.) •  Network infrastructure

–  Combination of wired and wireless technologies •  Improved wireless technology (longer service life, scalability, ad-hoc networking) •  Further development of wired technologies (KNX, EIB, X10 etc.) •  Business Models

•  Service Payment-Concepts •  Application level

•  Preference for renting models •  Monthly fix-price, pay-per-use payment or combination

•  Device level •  Preference for one-time payment •  Optional additional service fee

–  Broad range of portals •  Service Aggregator vs. third parties

–  Variety of gateway solutions •  Residential Gateway(s) and Virtual Gateway(s)