1. Renesas Electronics America Inc. © 2012 Renesas Electronics America Inc. All rights reserved. Creating New Service Revenue Opportunities Through Connected Devices Joseph Zaloker,Director of Technical Marketing, Arrow Electronics Peter Semmelhack, Founder, CEO Bug Labs Class ID: 8C08B

2. © 2012 Renesas Electronics America Inc. All rights reserved.2 Joseph Zaloker Director of Technical Marketing and M2M Arrow Electronics, Inc. Director of Technical Marketing for Arrow Electronics M2M Business Director of Sales for a M2M wireless design services company 25+ years experience in system level product design and new product development. Create new and emerging business models for clients, and guided client's products into the M2M space.

3. © 2012 Renesas Electronics America Inc. All rights reserved.3 Peter Semmelhack Founder, President and CEO Bug Labs, Inc. Founder and CEO/CTO of Antenna Software, currently the world’s largest independent mobile enterprise software developer.Antenna Software Founding member of Open Hardware Summit, the world’s first comprehensive conference on open source hardware. Graduate of Brown University with a Bachelor of Arts degree in Economics.

4. © 2012 Renesas Electronics America Inc. All rights reserved.4 4 What Is The Internet of Things

5. © 2012 Renesas Electronics America Inc. All rights reserved.5

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7. 7 M2M = Smart Intelligent Systems The connection of sensors, embedded devices, and systems  Machine with embedded intelligence  Hardware to extract data from the machine  Secure wired or wireless network  Middleware to bridge the network to the IT system  Enterprise software application to store and visualize the data Connecting and networking physical assets to solve Business Problems

8. © 2012 Renesas Electronics America Inc. All rights reserved.8 M2M = Smart Intelligent Systems Temp Sensor Embedded Processor Bluetooth Network Bluetooth Stack iPhone App

9. © 2012 Renesas Electronics America Inc. All rights reserved.9  Internet connected devices will reach an estimated 9.6B devices in 2012, growing to 47.1B by 2025  New shipments of IP addressable device will reach 4.2B by 2012 growing to 13.1B by 2025  IPV6 will help drive the adoption of connected devices  Advanced technologies like LTE will drive adoption  Advances in embedded and connection technologies  Data collected from the billions of devices will create endless service revenue generating opportunities Internet of Things – Market Opportunity

10. © 2012 Renesas Electronics America Inc. All rights reserved.10 … Internet of Things IOT is all about the services Equipment represents <10% of the market opportunity New opportunities in all value chains for Services Services require collaborative effort Creating sustainable value beyond ingredient capabilities ~$50B equipment business ~$550B services business It’s All About the Services

11. © 2012 Renesas Electronics America Inc. All rights reserved.11 Social Machines As machines become smarter and more network-aware, entire new classes of applications become possible. The methods and approaches used to drive significant value from online human social networks can now be applied to machine-to-human and machine-to-machine interactions

12. © 2012 Renesas Electronics America Inc. All rights reserved.12 RL 78 Demonstration

13. © 2012 Renesas Electronics America Inc. All rights reserved.13 Demonstration

14. © 2012 Renesas Electronics America Inc. All rights reserved.14 Turn hardware into services, build apps 14 HardwareWeb ServicesApplications HTML 5 Local Apps BUGswarm Management Portal Works with any Renesas device with an Internet connection BUGswarm Management Portal

15. © 2012 Renesas Electronics America Inc. All rights reserved.15 BUGswarm Dashboard 15 Organizes, administers, manages and visualizes all BUGswarms and associated devices.

16. © 2012 Renesas Electronics America Inc. All rights reserved.16 Case Study Example

17. © 2012 Renesas Electronics America Inc. All rights reserved.17 Case Study Example

18. © 2012 Renesas Electronics America Inc. All rights reserved.18 Interaction with customer via Salesforce Map data via Google Maps Real-time data showing machine installations IP Network Other Database feeds LAN OR WAN

19. © 2012 Renesas Electronics America Inc. All rights reserved.19 Its All About The Data! What data is needed to support the business? System data and user data How will data be used? Who will use the data? Can it be extended to other stakeholders? Opportunity for analytical insight? Create data from data?

20. © 2012 Renesas Electronics America Inc. All rights reserved.20 Its All About The Data! What data is needed to support the business? System data and user data How will data be used? Who will use the data? Can it be extended to other stakeholders? Opportunity for analytical insight? Create data from data?

21. © 2012 Renesas Electronics America Inc. All rights reserved.21 It is all about new models for services Revenue opportunities: Device maintenance/management Content, apps, services Marriage of presence, location & context Mobile players can offer insights… Experience in consumer touch – retail channels, monthly billing, call centers… Experience with application and content deployment - app stores, music & video portals, IPTV… Insight into behaviour based on handset usage, billing and purchases etc. New Revenue Streams

22. © 2012 Renesas Electronics America Inc. All rights reserved.22 Efficiently, safely push automated software/firmware updates Remote activation / operation. Mobile/web application to interact with the device in a secure fashion Geofencing/time fencing travel. Providing restricted area or restricted hours for device use Operational limitation: Setting maximum thresholds for device-specific functions Personalization. Allow end customer to change certain device characteristics through OEM offered services/packages. Theft disabling. Ability to remote disable the device in case of theft. Other Revenue Opportunities

23. © 2012 Renesas Electronics America Inc. All rights reserved.23 Usage-mode billing. Log device usage modes and offer mode-based business models “Rent-an-app”. Allow an application to be used for a specific period of time Geo-sensitive services. Applications that only work within country/state/province/regional boundaries, but are disabled outside. Patent compliance. Ability to remove/restrict application features if patent violations appear. Diagnostics. Pull diagnostic logs for real-time diagnoses of device and take pre-emptive action Other Revenue Opportunities

24. © 2012 Renesas Electronics America Inc. All rights reserved.24 While standing in front of vending machine, customer navigates to specific Facebook URL and “Likes” the page. In return, vending machine vends free goodie. BUG coordinates all 3G network activity and interfaces with vending machine. Social Vending Opportunities

25. © 2012 Renesas Electronics America Inc. All rights reserved.25 Social Vending How It Works - #1 25 Coupon Benefits: - Consumer gets free product and coupon/special offers - Pepsi delivers sample, receives “Like” and gets usage data Navigates to special URL Data

26. © 2012 Renesas Electronics America Inc. All rights reserved.26 Social Vending How It Works - #2 26 Benefits: - Distributors and operators get operational/diagnostic date Coupon Navigates to special URL Data Distributors Operators

27. © 2012 Renesas Electronics America Inc. All rights reserved.27 Ford Motor Co + Bug Labs

28. © 2012 Renesas Electronics America Inc. All rights reserved.28 Ford Motor Co + BUGswarm

29. © 2012 Renesas Electronics America Inc. All rights reserved.29 Arrow Electronics Update Major investment in Smart Connectivity 3 Business Development Managers BU created to support IOT Over 50 new franchises added Focus is on solving business issues M2M Website http://www.arrownac.com/solutions-applications/machine-to-machine/ http://www.arrownac.com/solutions-applications/machine-to-machine/ Offer a vast array of services Cellular data plans Paas/Saas Cloud Services Design Services Billing Solutions Compliance testing

30. © 2012 Renesas Electronics America Inc. All rights reserved.30 Bug Labs Introduction  Who are our customers?  - Companies of all sizes - OEMs, ODMs and product developers  - Three key verticals  * Smart Retail  * Health  * Automotive  What to we do for them?  - Help them take advantage of the market opportunities emerging in the Internet of Things  How do we do it?  - The Bug System - A turnkey hardware + software platform that includes everything necessary to prototype, pilot, produce and deploy innovative new networked products and applications.

31. © 2012 Renesas Electronics America Inc. All rights reserved.31 Customers

32. Questions? Questions?

33. © 2012 Renesas Electronics America Inc. All rights reserved.33 Please utilize the ‘Guidebook’ application to leave feedback or Ask me for the paper feedback form for you to use… Please Provide Your Feedback…

34. Renesas Electronics America Inc. © 2012 Renesas Electronics America Inc. All rights reserved.