Shaping the Digital Future

OnHub – the Conquest

of Smart Home Data How Google tries to maximize its relevance by

entering the consumer’s home

March 2016

FLASH INSIGHT

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Even without voice control OnHub already is a mature Wi-Fi router and provides numerous Smart Home features to compete with Amazon’s recently launched Echo. OnHub – Industry Comparison

Source: Mücke, Sturm & Company; 1) Example 2) Amazon DRS = Dash Replenishment Services

Google Amazon

Use Case1 Shopping via “Alexa” voice control

and Amazon DRS2

Control of Nest products via

remote control

Retail Price $ 179.99 $ 199.99

Core Function Voice control, speaker and

Smart Home integration Wi-Fi router with SH functionality

Technical

Details

Protocols: Wi-Fi, Bluetooth

Operating System: Fire OS

Protocols: Wi-Fi, Bluetooth Smart

Ready, Thread, Weave

Operating System: Brillo

Dual-band router with 13 antennas

for optimal coverage

User Interface Voice control “Alexa“ Google On-App

USP Voice control for Amazon services.

Extendable for external use

Fast, save and reliable Wi-Fi

Strategic

Rationale

Developing new distribution

channels for shopping

Defend e-Commerce market

dominance

Ecosystem expansion

Gateway to customer

Quality of personal data

Central positioning in the living

space

Consumer data analysis

Establish new partnerships

Open source approach

Target Group Mass market with tendency to

young digital affine consumers

Average technical affine Wi-Fi user

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Google OnHub – Product Description

Source: Mücke, Sturm & Company; 1) The additional antenna extends the Wi-Fi range in one direction, 2) Waiving with one hand over the OnHub to prioritize a device

Google OnHub is a new SH-hub combined with a Wi-Fi

router of the latest generation

OnHub is available from TP-Link with an additional

antenna1 and from Asus with “Wave Control”2

Google tries to position the new device in the middle of

the everyday life, in the kitchen or in the living room of

modern Smart Homes as a central control station

OnHub provides an excellent Wi-Fi range, the ability to

prioritize Wi-Fi devices, as well as the capability to transfer

data via different frequencies

Google OnHub

Google On is the corresponding smartphone app for

OnHub to control every OnHub-connected device

Installation and control of the OnHub (e.g. passing on the

Wi-Fi key), as well as Wi-Fi problems can be solved by

using the integrated manual

Google On

App

OnHub “Asus“ OnHub “TP-Link“

Google’s OnHub is a modern designed router combined with Smart Home functionality and an easy to use control app.

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Google tries to establish an open source IoT infrastructure for brand-overarching devices and services to orchestrate and control the data at home. OnHub – Ecosystem

Nest

Protect

Nest

Dropcam

Nest

Learning

Thermostat

Smart

Lock

Smart

Lock

LED

Lightbulb

Android based operating system

Open source approach

High energy efficiency

Network & communication protocol

Wi-Fi, Bluetooth and infrared

alternative

Google devices such as nest

External accessibility for devices

ranging from TVs to lightbulbs

Source: Mücke, Sturm & Company

Communication Operating System

Connected Devices

…

…

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The launch of a Smart Home hub was a logical consequence for Google to connect existing services and products. More activities in this area will follow. Google – Activity Roadmap

Web mapping service

that offers street maps,

satellite imagery, real-

time traffic conditions

and route planning

Product launch:

February 2005

Production of SH-

devices: Nest Learning

Thermostat & Nest

Protect

Acquisition: January

2014: $ 3.2 bn

Streaming-device for

the connection of

cellphones/ notebooks

etc. with a TV

Product launch:

July 2013

Google Maps Google

Chromecast

2013 2012 2005

Today

Wi-Fi router combined

with a SH-hub

Market launch: August

2015 (TP-Link),

October 2015 (Asus)

Android based OS for

SH-devices developed

on GitHub

Provides Bluetooth,

Wi-Fi and Weave

Market launch:

2016

IPv6 based

communication protocol

for SH-devices

Market launch:

July 2014

Project Brillo

Producer of SH-security

cameras

Acquisition: June 2014

by Nest Labs:

$ 555 mn

Dropcam (Acq.) OnHub

Thread Nest Labs(Acq.)

Source: Mücke, Sturm & Company

Intelligent voice control

assistant

Product launch:

October 2012

Google Now

2015 2014 2016

Activities

… 2017

Smart Home specific

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The future OnHubs will be characterized by connecting more devices and services via voice control by assistant and artificial intelligence to improve everyday life. OnHub – Next Generations

Source: Mücke, Sturm & Company

2025

2015

Google OnHub

Control via On-App

Hub controls different

systems

Control across systems

through standardized

protocols

No data storage of personal

information

Data analysis and storage

of only necessary device

information

Integration of a few existing

Google services and

software (Thread, Weave,

Brillo, Nest) 2017

Google OnHub n

Control of connected

home via brain waves

Automated home control

via artificial intelligence,

including robotic systems

Completely automated

analysis and real-time

implication via AI and

robots

AI being able to empathize

with humans through dialog

reasoning, planning and

natural language

understanding

Google OnHub 2

Microphones are

Integrated

Control via Google Now

Access to and analysis of

personalized, contextual

data

Artificial intelligence

recognizes repeated

patterns and atomizes first

control procedures

All Google services are

connected with the OnHub

First AI connections of

services

Most important changes

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Google strategy for an overarching connected living service will enable an orchestrated customized life and provide a daily companion for all requests. Google Services – Potential New Services

Customer orders a car for the

way home

Autonomous car arrives in

time. The price depends on

supply and demand

Fastest way home based on

real-time traffic data

Punctual and energy efficient

ventilation as well as heating

of the home

When coming home, music

starts playing and lights turn on

based on individual preferences

Alarm is set and the next day

destination is provided by

personal calendar

Alarm clock rings dependent

on sleep cycles and traffic

information

Car arrives automatically,

measures temperature, starts to

heat and takes owner to work

Integrated voice control

assistant in the car. Assistant

gives overview about today‘s

dates

Desired arrival time at

destination

Cooking instructions through

speakers and hologram

integrated in the cooker hood

Go

ing

to

wo

rk

Co

min

g

ho

me

Co

ok

ing

se

ss

ion

Google analyzes consumer

behavior to gain insights into

individual preferences

Google Contact Lens supports

shopping by listing nearby located

retail stores and the corresponding

available goods with their price

Recipe suggestion based on

the purchases and the

content of the fridge at home

Recipe transfer and

automated preparation of the

kitchen appliances

Source: Mücke, Sturm & Company

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The envisioned connected portfolio can lead to an all-in-one digital solution of Google’s existing and future services and devices. OnHub 2 Smart Home Ecosystem Framework – Vision

Personalized

Insurances

Dynamic

Energy Mgmt.

Health

Mgmt.

…

Smart Home

Mgmt.

Google

Shopping

Express

Smart

Oven

nest

Protect

Google

Glass

nest

Thermostat nest

Dropcam

Smart

Locks Car

Smart

Mobility

… … …

Home

Security Home

Control

Hybrid

Open

Platform

Closed

System

OnHub

Source: Mücke, Sturm & Company

Google Now Google

Music

Google

Calendar

Google

Alarm

Google

Maps

Google

Wallet

Google

Hangouts

Google

Translate

Internally sourced capabilities Mostly external

Google

Contacts

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Google’s move to push OnHub into customer’s houses is part of a greater service strategy to position them as the single point of contact for all requests. The Google Service-Strategy 2025

Source: Mücke, Sturm & Company

Emphasis of the Google Smart Home/ IoT

business will be placed on software

development

Counteraction of search business decline

to remain its leading search provider position

Expansion of services regarding artificial

intelligence and interconnection among

existing services

Objective to become IoT service platform

provider with the corresponding network- and

communication protocols for third-party

providers

Cooperation in alliances to commit final

product oriented producers in the long term

Google will try to unite single services to a

few overarching services

In the long term, Google will economically

exploit contextualized, situational and

personalized data, based on a coordinated

and clean data collection

Strategic background OnHub

market launch

Google service-strategy

2025

High competition among the biggest

competitors (Amazon, Samsung and Apple)

leads to offensive market positioning

Fast market entry with only a few SH-

functions, but the opportunity for potential

future software updates

Commercialization of other existing Google

services through automatic connected SH-

services

Demonstration of the functionality of existing

software (Thread, Weave and Brillo)

Ensuring competitive platforms for previous

Google-developments like Chromecast, Nest

and Nexus

Early establishment of a Google Smart Home

unit to increase acceptance of future

developments in the Smart Home area

Waiving of data storage to increase OnHub

acceptancy

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The launch of OnHub is only the beginning of Google’s revolutionary attempt to unite all of its single solutions to one overarching connected living service. Key Take-Aways

1 Increase consumer data quality and relevance The first hardware move into the midst of home has a major impact on the general

perspective towards potential future Smart Home services and devices to generate

contextualized, situational and personalized consumer data.

2 Support of core business model Google launched OnHub as a gateway to customers to support its core business

model as a search engine provider by introducing a device, that connects its existing

solutions and therefore increases the utilization of their services, especially its top

priority - keeping Google as single source of information.

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Creation of new business models With a holistic digital strategy, complemented by connected services and devices,

Google continuously pushes the boundaries of connectivity to revolutionize the

everyday life of their customers. The overarching connected living service as part of a

IoT-platform will enable multiple digital opportunities like autonomous mobility that

increasingly rely on generated data and artificial intelligence.

Source: Mücke, Sturm & Company

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