1. Slide 1 CABA’s Connected Home Research Council, Confidential The Connected Home State of the Market Past and Present Technologies Ecosystem Alex Detre Research Director November 23, 2009 Consumer Segments

2. Slide 2 CABA’s Connected Home Research Council, Confidential The Realities Note: Remember the consumer adoption curve. Innovators and early adaptors will purchase technology that others will not until it becomes more mature and consumer friendly

3. Slide 3 CABA’s Connected Home Research Council, Confidential Three distinct Ecosystems The entertainment ecosystem refers to the technology and content designed to address consumer needs for audio, video and game related entertainment. Technological innovation has changed the face of entertainment by drastically lowering the cost of production and distribution, while increasing demand. The convergence of media like television and the Web as well as the emergence of new interactive media and delivery mechanisms ensure that consumers will have more and more entertainment options at home and on the road. The family ecosystem refers to the ways in which family members interact with each other and with home technology in securing basic needs like food, clothing and shelter as well as in meeting higher-order emotional needs. The family is one of our main and most important social institutions as it serves to socialize people to be productive members of society. The family provides guidance, support and a sense of belonging. Technology plays a central role in this ecosystem. From helping families put nutritional meals on the table to streamlining household operations, technology offers families time-savings, peace-of mind and other critical benefits. The career ecosystem refers to the people, environments and technologies that enhance career productivity and potential. Historically, in Western society, work has been considered a central source of personal meaning or self-identity. Although work may take on characteristics of home and vice versa, we distinguish between the work and family spheres for the purposes of categorizing and researching various home technologies

4. Slide 4 CABA’s Connected Home Research Council, Confidential What Ecosystem is most interested in Smart Home/Connected Home? Answer the Career Eco System. This is a Eco System of people who work from home at least part time or tele commute The use technology differently they are more likely to be using technology in a early web 3.0 environment to solve problems. 47% Works at Home Outside Regular Business Hours 52% B 43% U.S. 2008 Total Online HHs (n=618; A ) Canada 2008 Total Online HHs (n=215; C ) U.S. 2005 Total Online HHs (n=604; B ) 15% Self Employed 15%14% Today, which Ecosystem is most interested in the Smart Home/Connected Home?

5. Slide 5 CABA’s Connected Home Research Council, Confidential Past & Present Technologies In 2003, market opportunities were: Home Automation, Energy Management, Lighting controls, Security In 2005, market opportunities were; digital audio, flat panel TVs and home theater systems. More specifically digital video recorders (DVRs) to Internet Protocol Television (iPTV) services, MP3, gaming, etc. In 2008, market opportunities were: personal multimedia player, wireless memory card, Computer-linked HDTV, Wireless home theater ‘in-a-box. Where are we going with all of this stuff? Energy Management, Security, User Interfaces, Home Management. iPTVWeb Device Smart Phone Widget

6. Slide 6 CABA’s Connected Home Research Council, Confidential Connected Home Market Consumer Segments Offer Insight on Promoting Connected Home Technology Households in the U.S. and Canada can be profitably divided into six distinct segments based on their interest in and engagement with connected home technology. The first two segments represent the ‘beachhead’ groups necessary to generate positive word-of-mouth. Once these segments are saturated, companies will find it easier to convert mass market consumers, who presently lack context for appreciating the connected home concept. Seeing lead consumers with meaningful solutions will prompt them to take a greater interest in the market and broaden adoption of key products. Active Connected Seekers are the most interested and engaged of all segments, and include significant number of minorities, especially Hispanics (8% in U.S., 4% in Canada). Aspiring Home Connectors have a high interest in the connected home, particularly family and career applications. However, they are less engaged with digital entertainment media than other segments (5% in U.S., 4% in Canada). Involved Followers have only moderate interest in the connected home, but are active users of home technology and home networks. They are more interested in entertainment than family or career applications (24% in the U.S.,19% in Canada). Satisfiers are engaged with technology, but don’t necessarily strive for more (19% in the U.S., 28% in Canada). Trend Trailers are less engaged and interested in connected home technology (27% in the U.S., 28% in Canada). Entrenched Resistors are the least interested in and engaged with technology (17% in both the U.S. and Canada). Consumer Household Segments Involved Followers Active Connected Seekers Satisfiers Trend Trailers Aspiring Home Connectors Entrenched Resistors U.S.Canada

7. Slide 7 CABA’s Connected Home Research Council, Confidential State of the Market Significant growth in : Broadband adoption, Wi-Fi adoption at home, and availability in public places. Video gaming—including growing numbers of female and adult players. Mobile entertainment devices and ‘converged’ devices – such as portable multimedia players and phones that play both music and video. Online social networking. On-demand content availability, both on the Internet and through traditional cable and satellite TV providers. High-definition content availability. Another factor potentially driving interest in connected home technology is increased consumer concern about managing energy costs in light of steadily rising fuel prices. Inhibitors to Adoption: Digital rights Lack of solution awareness Economy Overwhelmed with technology Costs and complexity

8. Slide 8 CABA’s Connected Home Research Council, Confidential Insights, recommendations and conclusions 1.Entertainment ecosystem is your foothold into the “Connected Home” 2.Focus on new construction home (www.sohowest.ca) and retrofitswww.sohowest.ca 3.Make it fun for families…stimulate the imagination 4.Minimize new behaviors (Family) 5.Simplify a solution... Bundles: energy efficiency package, security package, digital living package 6.Products and services that emulate expressive emotions I.e Wii 7.Balance of passive and active technologies – status quo vs. customization 8.Must be multifunctional 9.Greater social impacts 10.Capitalize on remote workers technologies 11.Remote workers need to bridge home and work – easy on-demand communications 12.Leverage work technology to gerner interest in the “Connected Home’

9. Slide 9 CABA’s Connected Home Research Council, Confidential State of the Connected Home Market Study Download the Executive Summary: www.caba.org/2008connectedhomestudy Alex Detre Research Director Continental Automated Buildings Association (CABA) Office: 613.686.1814 x228 Toll Free: 888.798.2222 Fax: 613.744.7833 detre@caba.org