1. Vision of the future – ROADIBROM Summit Shanghai Convergence Digital Broadcasting-Mobile CONNECTED PLANET A vision of the future Yongqin Zeng Philips Research Shanghai Arthur Weyns VP Global Affairs Eindhoven

2. 2 Vision of the future – ROADIBROM Summit Shanghai 11 What does the future look like? End-user needs Technolog y trends FUTURE Disruptiv e events

3. 3 Vision of the future – ROADIBROM Summit Shanghai Disruptive events Timing of disruptive events are unpredictable by definition, however most events are known already: –Global warming energy efficiency, home office, lower mobility, trade regionalisation/localisation –Migration focus on regional development –Terrorist attacks cocooning, security vs privacy –Cyber crime central protection, off line archives –China & India the 2 superpowers –….

4. 4 Vision of the future – ROADIBROM Summit Shanghai End user Needs & Trends Consumers are increasingly looking for: –Personal empowerment ( freedom, control, simplicity) –Engaging in experiences (multi-sensorial) –Creating experimentation and discovery (creativity) –Fluid & open social grouping (sharing, belonging, privacy) –Personal care & well being (monitoring, security) –Environmental neutral footprint (sustainable planet)

5. 5 Vision of the future – ROADIBROM Summit Shanghai Technology Trends. Future technology landscape largely defined by: –Law of Moore (integration level) & Edholm (data rates) –Broadband roll-out –Progress of compression techniques –Progress of wireless –Digitalisation –Peer-to-peer –Sensing and sensor networks –…–… … leading to: –Internet: all encompassing information source –Ubiquitous (wireless) broadband access always online –Appliance & service interoperability –Ambient intelligence –Central & off line personal archive companion –…–…

6. Vision of the future – ROADIBROM Summit Shanghai Markets & Industry follow these trends Replacement of Wired with Wireless Example: Number of European homes with networks 100% Wireless Wired % of wireless vs. wired 50% 25% 75% Year Source: DisplaySearch, IDC, ABI research, CMI World Market forecast (April 2006) Shift from Connected Devices to Services 54% 55% 56% 58% Services as % of total CE market increase Year On Year Year Importance of managing the Ecosystem Example: Apple managing the ecosystem for iPod experience 6 Growth in Connected Devices

7. Vision of the future – ROADIBROM Summit Shanghai Internet & Digital Content exploit these trends more More content leads to high need for personalization Explore & Locate Select / Playlists Acquire Change Share Content Personalization Internet Content & Services Conventional Content & services More Content Available Personalize and give me my content so I can enjoy and share it where & when I want Personalized Content Anywhere, Anytime 7

8. 8 Vision of the future – ROADIBROM Summit Shanghai ICT- CE Applications converge gradually IT / PC CE Telecom Gaming CRT -TV Fax Fixed voice ADSL Laptop CRT- Monitors LCD- Monitors LCD- TV/Monitors Home Audio LCD- TV DVDR Multifunctional printer Desktop PDA Mobile compaignon Portable Audio DVD STB Home Console Portable Console CRT -TV VCR

9. 9 Vision of the future – ROADIBROM Summit Shanghai 14 Fundamental rules of the game change 1.Markets get redefined -from stand-alone TVs to connected display functions everywhere -from portable A/V to personal expression -from video systems to entertainment hubs 2.Media value chains are redefined -Media democracy - Info controlled & created by consumer 3.Industry value chains are redefined -Deverticalisation & commoditisation -Key added value in Software & Application Services only 4.Speed gets increasingly critical -product lifecycle shortens to months -Modular & upgradable products

10. Vision of the future – ROADIBROM Summit Shanghai 1010 Our Vision of the FUTURE: Connected Planet A connected world where everybody can seamlessly and intuitively access and share his preferred entertainment, information and services, independent of time and location

11. Vision of the future – ROADIBROM Summit Shanghai Source: PCE CMI, Based on international consumer research 2004 Ease of experience No tripping, no hassle This is idiot proof User friendly, made for me Right content offering, anytime, anywhere Access to the right music and movies to match my mood… Access in the car to all the music I have at home Wherever I am in my house, or even on the move, I can get my favourites; cool! Instantly share and connect with friends & family This is the future, everything will be wireless and connected Sharing these moments is just great I instantly send a picture of what we are talking about.. 11 CP vision resonates with consumers expectations

12. Vision of the future – ROADIBROM Summit Shanghai Lets create this peoples dream together !

13. Vision of the future – ROADIBROM Summit Shanghai Scenario 1 - 2010 Nothing new under the sun Users carry different devices for different applications. No system approach to Combos Users pay different service providers even for connectivity: extrapolation of todays scenario. Incumbent telco / monopolist position (i.e. heavily regulated spectrum policy) prevails (more likely in Europe, China?) Consequences: fragmented markets, convergence holds up, vertical products dominate, user has to carry different devices for different applications, services handover means device handover, no economy of scale,.. Many people subscribe to different operators for cellular, ADSL, Pay TV Congestion and interference affect user experience

14. Vision of the future – ROADIBROM Summit Shanghai Scenario 2 –2015 (citizen perspective) Application & services are King Users have a Personal Identification contract with their operator to get a SIM card: –Operators provide location-based services: information, security, identification, e-cash, –Communication is for free (EU: SIM-device centric, US: Microsoft, user centric) People buy mobile devices according to their lifestyle Interoperability affects user experience All devices have build-in radio and are connected, –Users expect to be able to access info without being tethered. Internet (anarchist) position (i.e. no regulation) prevails (more likely in the USA?) Consequences: –start-ups spring up, high product innovation speed, but wild business models –product performance unpredictable, best effort services only –countless applications, but no end-to-end interoperability, –bulky expensive multi-functional devices, because of no incentive to invest in SDR technology,..

15. Vision of the future – ROADIBROM Summit Shanghai Scenario 2 –2015 (citizen perspective) Application & services are King Scenario 2A – connectivity is not free: –Users pay for connectivity and applications, maybe to two different service providers or in some cases one service provider offering both connectivity and applications. Scenario 2B – connectivity is free: –Connectivity is invisible to the user. User pay for usage of application, different application and type of service command different fees.

16. Vision of the future – ROADIBROM Summit Shanghai Scenario 3: Citizens perspective Triple-play (VoIP, TVoIP, Internet access) via one network and one wireless provider Locked in to operator/wireless ISP: You buy your PDA/Phone/navigation from operator World-wide harmonized cognitive/agile radio position prevails Consequences: –SET (Simple, Efficient, Trust) vision comes true. –Ubiquitous connectivity: convergence and interoperability accelerate. –SDR renaissance: smart compact cheap multi-functional devices everywhere –global roaming for any service, always best connected and served –sound value chains consolidated for all.

17. Vision of the future – ROADIBROM Summit Shanghai Scenario 3: Business perspective Unclear about whether the market goes vertical or horizontal: –3A: Operators (= Wireless ISPs) making money of basic communication services Horizontal markets ?? –3B: Infrastructure may be too expensive for horizontal market, government or service providers may subsidize or control set up op networks, cf energy market and air time retailers There has been a consolidation into only one or at most a few business models for operators. –Can the investment is infrastructure be recovered? (may need services business to pay back) Operators dictate the design of handheld devices Unification of communication standards More licensed spectrum, spectrum is still auctioned, and 3 tier business models (own, lease, reuse) apply Limited number of standards What if Sc2 in EU, Sc3 in China, then Sc3 captures the world