The Future of Smart Technology

Presented by:

The Future of Smart Technology

What Consumer’s Want

www.parksassociates.com | © Parks Associates | [email protected] | 972.490.1113 | @ParksAssociates

Two Paths to Market

2

Products Systems

2


Presented by:

Smart Home Market

Overcoming Barriers to Smart Home Adoption


Barriers to Smart Home System Adoption - Awareness

62% 62% 72% 69%

10% 11% 8% 9%

80%

70%

60%

50%

40%

30%

20%

10%

0%

10%

20%

Smart home services Smart home products Where to buy smart home services

Where to buy smart home products

Very familiar (Rating 6-7) Not familiar (Rating 1-3)

% o

f R

esp

on

den

ts

Source: American Broadband Households and Their Technologies Q2 2014 | N=10,000 broadband households, ±0.98% | © 2014 Parks Associates

Smart Home Familiarity (Q2/14)

4


Barriers to Adoption – No Concise Value Proposition

5 5

21% 26% 26%

28% 29% 29% 29%

30% 30% 31% 31%

32% 34% 34% 34% 35%

36% 39%

39% 41% 41%

43% 45%

51%

0% 10% 20% 30% 40% 50% 60%

Open a pet door

Turn on/off or check the status of appliances in your laundry area

Receive a daily summary of your home's energy usage

Understand your home's energy performance

Open and close your garage door

Turn on/off or check the status of appliances

Let you know if energy use is within budget

Monitor your home's total electricity usage in real time

Identify ways of improving your home's energy efficiency

Identify if there is a problem with any major appliances

Have appliances automatically minimize electricity usage

Monitor, program, and adjust your home's thermostat

Receive alerts when energy usage is high

Use sensors to know occupancy and automatically turn off lights and …

Monitor indoor security cameras

Monitor outdoor security cameras

Turn on/off the lights

Lock and unlock doors

Receive alerts when motion detectors are triggered

Receive alerts when there is a water leak

Receive alerts when there is a medical emergency

Receive alerts when doors or windows are opened

Receive alerts for carbon monoxide or a gas leak

Receive alerts for smoke or fire

% "Very Appealing" (6-7 on 7pt. Scale)

Most Appealing Smart Home Use Cases (Q2/14)



Barriers to Adoption – Upfront, Recurring Fees

6

Q7098. In a few words, tell us why you decided not to get a home security system in the past?

Source: Homeowners with Broadband at Home Q2 2013 | N=4,000 U.S. Broadband Homeowners | © 2013 Parks Associates


Barriers to Adoption - Interoperability

51%

58% 60%

0%

10%

20%

30%

40%

50%

60%

70%

1st device purchased (n=736, ±3.61%)

2nd device purchased (n=573, ±4.09%)

3rd device purchased (n=520, ±4.3%)

% R

epo

rtin

g "V

ery

Imp

ort

ant"

(R

atin

g 6

/7 w

ith

7=

"Ext

rem

ely

Imp

ort

ant"

)


Importance of Interoperability (Q2/14)

7


Barriers to Adoption – Privacy and Security

8

39% 38%

24% 20%

0%

10%

20%

30%

40%

50%

60%

70%

Concern over unauthorized access Concern over historical data

Concerned (Rating 5) Very concerned (Rating 6-7)


% o

f R

esp

on

den

ts

Smart Home Privacy Concerns (Q2/14)


Presented by:

Smart Home Service Providers

Competition in the Smart Home

www.parksassociates.com | © Parks Associates | [email protected] | 972.490.1113 | @ParksAssociates 10

Smart Home Competitors

Monitoring and Fees

Professional Monitoring

Fee Based Self Monitoring

Self Monitoring



Sales Approach

Face to Face Call Center Retail Vignette On line



12

Installation Approach

Staff Technicians DIY / 3rd Party Contractors Dealer Channel DIY

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&docid=Q8oDu7vxQyi5qM&tbnid=ObCk-b9-yWnqXM:&ved=0CAgQjRwwAA&url=http://www.burkeinstalled.com/Testimonials.html&ei=D5UHUr3OKYjw2QWrjYHIBA&psig=AFQjCNEPULE5irTSJ-aNMaUUNbM82UNwrg&ust=1376315023779819



Monitoring

Sales Approach

Installation

Professional DIY



Self Monitoring

Security

Face to Face Call Center Retail

Vignette On Line



Monitoring

Sales Approach

Installation

Face to Face Call Center Retail

Vignette

Professional DIY



Self Monitoring

On Line

Low Cost


Self Installation is Growing

15

26% 16%

12% 6%

10%

5% 4%

5%

16%

11%

7% 6%

47%

65% 75%

79%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Less than one year (n=608, ±3.97%)

1-2 years (n=454, ±4.6%)

3-4 years (n=280, ±5.86%)

5+ years (n=579, ±4.07%)

% o

f B

B H

Hs

I don't know

The security system provider

A contractor that I hired

Friend or family

Myself

Home Security Installation by Length of Ownership (Q3/14)

Source: American Broadband Households and Their Technologies Q1 2014 | N=10,000 Broadband HHs ± 0.98% | © 2014 Parks Associates


Presented by:

Smart Products

Competition in the Smart Home


Smart Product Requirements

17

16%

20%

26%

30%

37%

40%

40%

42%

42%

42%

43%

49%

54%

0% 10% 20% 30% 40% 50% 60%

None of the above

Have a specific type of network technology

Not use excessive bandwidth

Not cost more than a non-smart product

Work with other smart products

Keep the data generated from the product private

Keep communication with the product secure

Be able to install it by myself

Be removable, so you can take it with you when you move

Offer technical support for product

Be upgradable when new software releases are available

Have long battery life

Have no monthly service fees


Essential Features of Smart Products (Q2/14)

% Selecting


Smart Product Adoption

18

Yes, 13% No, 83%

I’m not sure, 4%


Adoption of Smart Home Control Products (Q2/14)


Smart Product Adoption

19

3%

3%

4%

4%

4%

4%

5%

5%

5%

5%

6%

6%

6%

6%

6%

0% 2% 4% 6% 8%

Water leak detectors

Sprinkler system

Blinds or drapes

Combination sensor

Home or Kitchen appliances

Power strip

Door bells

Outlet/plug

Carbon monoxide detectors

Garage door openers

Door locks

Security camera

Smoke detectors

Programmable thermostat

Lights


% Owning Product

Adoption of Smart Home Devices (Q2/14)


Architecture for Smart Products

Virtual Device

Connected Product

Gateway

Device Monitoring and

Control

Device Analytics, Modeling and Control Data Services

20


Value Added Service Bundles

21

58% 42%

Smart Thermostat: Preference (Q2/14)

$99—A programmable thermostat that can: -Be monitored for status or controlled from a smartphone, tablet or computer

$299—A programmable thermostat that can: -Be monitored for status or controlled from a smartphone, tablet or computer -Display the current weather forecast -Use weather forecast to save money by running your air conditioner or furnace when it is most efficient -Increase your home’s energy efficiency by “learning” your daily routines and temperature preferences -Automatically make minor adjustments to save money by operating your system when electricity prices are low



22

47%

53%

Smart Smoke Detector: Preference (Q2/14)

$29—A smoke detector that can: -Be monitored for status or controlled from a smartphone tablet or computer

$129—A smoke detector that can: -Be monitored for status or controlled from a smartphone, tablet or computer -Send you alerts when the battery needs to be replaced -Send you alerts when the alarm is triggered telling you about the event and location -Automatically shut off the furnace or air conditioner in the event of a fire



23

While it’s still working properly,

61%

Only when it stops working properly,

39%

Advanced Smart Smoke Detector: Likelihood of Replacing Functioning Unit (Q2/14)


Stand Alone Smart Products, Part of Smart Systems

24

58% 58% 52% 48% 50% 46% 48% 42% 42% 39% 36% 37% 32%

9% 8% 9% 11% 9%

10% 7% 12% 10% 12%

10% 8% 13%

32% 34% 39% 41% 41% 44% 45% 47% 48% 49% 54% 55% 55%

Do

or

lock

s

Secu

rity

cam

era

Co

mb

inat

ion

se

nso

r

Wat

er

leak

det

ect

ors

Car

bo

n m

on

oxi

de

d

ete

cto

rs

Smo

ke d

ete

cto

rs

Do

or

be

lls

Ligh

ts

Gar

age

do

or

op

en

ers

Ou

tlet

/plu

g

Pro

gram

mab

le

the

rmo

stat

Blin

ds

or

dra

pe

s

Po

we

r st

rip

Product Integration with Smart Home Systems

...stand alone devices, not part of any system

...part of a home control system that controls multiple devices

...part of a home security system


Presented by:

Evolution of the Smart Home

Scenarios of the Future


Key Dimensions of Change

26

Who Pays - Monetization

Wh

o C

on

tro

ls -

Ch

oic

e

Consumer

Ven

do

r

Vendor

Co

nsu

me

r

Choice

This dimension relates to who controls the

ecosystem, including the hub, the

operating system, the applications,

peripherals, communication, channel, and

services associated with the ecosystem.

Monetization

This dimension relates to who pays for the

hardware, software and services

associated with the ecosystem[s] that are

used by the consumer.


Data from Smart Products Unlocks Value for Partners

27

The Internet of Things

Security Energy Media Insurance Electronics Retail Health Care

Ind

ust

ry P

artn

ers

Sm

art

Pro

du

cts


Scenarios

28


Who Controls System - Choice

Consumer

Vendors

Vendors

Build-it-Yourself Systems

Build-it-Yourself Systems with

Incentives


Control with Incentives

3

1 2

4


Control the Ecosystem


Scenarios

29


Who Controls System - Choice

Consumer

Vendors

Vendors

Build-it-Yourself Systems

Build-it-Yourself Systems with

Incentives


Control with Incentives

3

1 2

4


Control the Ecosystem


Tom Kerber Director of Home Systems and Energy

Parks Associates

15950 N. Dallas Parkway, Suite 575

Dallas, Texas 75248

Office: 972.490.1113

Fax: 972.490.1133

[email protected]

Thank You.

Documents

The Future of Smart Technology