An overview of international activities in 2006 and recommendations on how to advance the market

1. The Current Situation of the Networked
Home Market - Overview of
International Activities
Dr. Susan Schwarze
VP Marketing and Board Member, OSGi Alliance
Marketing Director, ProSyst Software

2. Agenda
• Short introduction of the OSGi Alliance and its technology
• General Overview of the current status and future trends
– North America
– Europe
– Asia
• Recommendations

3. The OSGi Alliance
• The OSGi Alliance is an open organization
– Established in 1999, members worldwide
– Membership spans many industries
– Voting members treated equally
– Membership information available at www.osgi.org
Service Providers
Auto Makers Device Manufacturers
IT Providers
OSGi ISV
Alliance
Solution Developers
Providers
Others

4. OSGi Vision and Technology
• Many devices can run the same applications despite their
differences in hardware, capacity and performance
– The dynamic module system for Java™
• Modular, service-oriented architecture
Bundle
= service interface Bundle
• Defined interfaces
Bundle
exported and Bundle (Application)
• Device Interoperability
imported
by bundles
• Future-proof platform
OSGi
– Connectivity, easy upgrade and extension
Java VM
– Universal Middleware
Operating System
Driver Driver Driver
• Deployments worldwide by Fortune 100 companies
Hardware

5. Mass Market Consumer Requests
• Low pricing
• Simplicity
• Safety and security
• Added value
– Remote device control
– Service bundlings
– Future proof solutions
• Design adaptibility

6. Status quo in the networked home market
• Multi-media content
– Different sources/data, location and access of content
– Traditional content provision over internet does not scale (IPTV)
• “Internet of things”
– Heterogeneous networks and device accesses
– Complex device and network configuration and management
– Isolated service solutions, like Google, Yahoo etc.
– Slow shift to user-centric creation and consumption environment
• Networked home environment
– Monolithic solutions
– Complex user interfaces
• Network infrastructure
– Competing wired and wireless network solutions
• Business Models
– First steps/offers
– Monolithic solutions

7. Broadband access vs. low networked home rate
• 226M broadband users worldwide in 2006
- 170M additional subscribers by 2010
• Networked homes worldwide in 2006 (The Diffusion Group, 05)
– USA 17% (~51M homes)
– Japan 16% (~ 20M homes)
– Germany and Korea: 2% (~ 1,6M and ~1M homes)
• Significant increase in home networks expected
– 2004: 35M / 100M installed devices (TDG)
– 2008: 97M - 160M / 1bn installed devices (In-Stat,04 vs. TDG,05)
– Germany (38% in 2011; ~ 31M home networks)

8. The heat is on …
"The fight between cable operators and phone companies is heating up as
attention turns from the triple-play offering to the quadruple play, a
service bundle that includes high-speed data, telephony, TV, and now
wireless." (CNET News.com)
– Triple Play totaled $535.0 million in 2005 and is expected to reach $755.6
million in 2012. (Frost)
• Actors
– STB vs. Residential Gateway
• Cable operators and phone companies
– Internet / Web 2.0
• Content providers, like Google or Yahoo
• SW providers, like Apple or MicroSoft
– P2P
• Content providers, like Warner Bros. or in2movies.de

9. Global Development - STB and Hybrid Gateway
Gerry Kaufhold, In-Stat 2006

10. Development in North America
• Dominance of cable providers
– High volume of Pay-TV STB and related services
– 2009: 36M devices
• Key driver: entertainment
– Convergence of Pay-TV, internet and mobile services, Web 2.0, e-mail, SMS, IM
– 2010: 30M entertainment home networks (Parks Associates, 06)
• Home networking goes with broadband
– 50 to 60% of broadband customers have home networks (Parks Associates, 06)
– US regulation: The 1996 Telecommunications Act
• Proprietary products (smarthomeusa.com; Cisco et al.)
• US Plug&Play agreements between cable operators and CE manufacturers
• “CableHome” certificate (QoS, DRM, simple navigation) plus triple-play
– Industry collaboration: CABA / IHA (Mealtime pilot; IPTV Phase II)
• Market Volume:
– 2008: 33.3M home networks (In-Stat, 04) and 2012: 63.8M home networks (Frost, 06)

11. Development in Europe
• High competition between the various actors
– First solutions in the market
• White goods, CE, triple-play offers
• Additional interest in energy, e-health and monitoring services
– Open for hybrid STB
• 2009: Between 12 and 14M devices each (Pay-TV; Digital Terrestrial, RG)
• Convergence with key driver entertainment
– EC funded projects (6th program “Ambient Intelligence”/ “Enabling Technology”:
3.625bn Euro)
• TEAHA, AMIGO, ePerSpace, MEDIANET etc.
• CENELEC SmartHouse Program (code of practice), ETSI
– Industrial collaboration
• OSGiA, HGI, NEM, DLNA, UPnP, KNX etc.
• Market volume:
• 2008: ~ 22M home networks (In-Stat, 04)
• Germany 2010: Euro 13.3bn for home networks in total (Soreon Research, 05)

12. Development in Asia
• Simple PC networks with broadband access
– Declining pricing, higher data transfer, governmental support, more complex
home networks
• First solutions in the market
– White goods, CE, first triple-play projects
• Additional interest in energy, e-health and monitoring services
– Open for hybrid STB
• 2009: Pay TV STB and RG devices (19.5M and 18.6M)
• Push factors
– Societal aspects
– Olympic Games 2012
• Market Volume:
– 2008: 35.5M home networks (In-Stat, 04)
– 2009: US$ 21 bn for home networks (In-Stat, 06)

13. Development in Asia – Japan & South Korea
• Japan
– Rapid spread of broadband and increasing interest in technology
• ECHONET, DLNA, UOPF, OSGiA, RFID
– First product launches, white goods series based on ECHONET
• Leading Toshiba: Feminity Series: 2500 products since 2002
– First networked home trials (ICT home)
– Rising interest in entertainment and anticipated export to Chinese market
Divergent forecasts: 5M networked homes in 2015 / 30M in 2010
• South Korea
– Up to 90% of the population will have home networks in 2011 (44,1M)
– Rapid spread of broadband and increasing interest in technology
• Web 2.0, OSGiA, DLNA, HNCP, ECHELON, RFID/USN
– Strong interest in entertainment services
• Internet and mobile phones as the main access points - especially for the younger
generation
– Strong governmental support for building automation (Dig.Media City/U-Port)

14. Japan - Next Generation “ICT Home”
OSGi Service Aggregation Platform（OSAP）
Service Providers
External Access
B B
Bundle
PC System
Network
(FLETS, OCN,
B B
NGN, etc.)
B B
Control
Audio-visuall
B B B System
B
ＰＩ
NTT Extension Home Appliance
OSGi System
Framework
Sensor System
Telco System
Service Gateway
B B
Center System

15. South Korea – Digital Media City / U-Port
• Part of Digital Media City
– 20-story IT center to open in Seoul by 2007
– Research and development hub for the international IT industry
– IT center to attract multinational IT enterprises and R&D firms in Seoul by
2007
– Total office space of 19,140 square meters,
• Designed to offer comprehensive support facilities, incl. a joint manufacturing
facility to help save equipment expenses
• U-Port
– Project: KT & City of Busan
– Expectation: US$ 15 bn market and 610,000 jobs by 2010
– Ubiquitous tracking and management of cargo
– Intelligent traffic control system
– U-Convention Center for visitors

16. Conclusions
• Emerging market with high revenue forecasts
– Fierce competition, declining pricing, higher data transfer, broader variety of connecting
devices, more complex home networks
• Divergent governmental support
• Pay-TV STB in North America vs. hybrid STB in Asia and Europe
– Additional service offerings
• Broadband stimulates home network market
– Key driver entertainment
• Content mobility
• Seamless integration of different sources on heterogeneous devices
• User-centric session based services
• Hurdles to overcome:
– Complexity and heterogenity
– Extended home environments (family federation, variety of lifestyles)
– Safety and Security
– Pricing

17. Recommendations
Foster development of services/applications and offer service bundling
– Entertainment
• Audio/Video: today still low consumer involvement
– Health Care
• Interaction between hospital/doctor, pharmacy and patient
– Office
• Access of information in different environments using diverse devices
• Foster security and safety
– Protected privacy vs. remote control/administration
– Flexible security mechanisms
• Dependent on scenario and communication partner
• Improve ease-of-use
– Elderly and disabled people
– Mass market

18. Recommendations
• Flexible solutions that are future-proof
– Modular assembly (HW/SW) instead of monolithic product solutions
• Cost- and time effective development
• Integration of today`s islands
– Universal middleware
– Business concepts
• Regular checkups
– Added value
– Pricing
– Simplicity
• IP flow /Patents
– Establish a joint IP policy for all work products where public funds are used
• Uniform and fair royalty payment system OR
• Code: Apache 2.0 licensing / Specifications: Royalty free declaration

19. Thank You
Dr. Susan Schwarze
VP Marketing and Member of the Board
mailto:s.schwarze@prosyst.com
OSGi Alliance
Bishop Ranch 6
2400 Camino Ramon, Ste 375
San Ramon, CA 94583
Phone: +1.925.275.6625
FAX: +1.925.886.3696
www.osgi.org

20. Future trends
• Multi-media content
– Content mobility
– Seamless integration of different sources on heterogeneous devices
• Open to different network technologies/protocols (abstraction layers)
• “Internet of things”
– Fixed-mobile convergence / networked mobility
– User-centric session-based services
– Multi-provider
• Extended Home environment
– Broader variety of lifestyles
– Family federation
– Uniform and user-friendly interfaces
– Flexible solutions on demand (“roaming”)

21. Future Trends (ctd.)
• Network infrastructure
– Combination of wired and wireless technologies
• Improved wireless technology (longer service life, scalability, ad-hoc networking)
• Further development of wired technologies (KNX, EIB, X10 etc.)
• Business Models
• Service Payment-Concepts
• Application level
• Preference for renting models
• Monthly fix-price, pay-per-use payment or combination
• Device level
• Preference for one-time payment
• Optional additional service fee
– Broad range of portals
• Service Aggregator vs. third parties
– Variety of gateway solutions
• Residential Gateway(s) and Virtual Gateway(s)