THE Connected Home Opportunity Jean-Pierre (JP) Abello Director, Research & Development Nielsen Global Engineering Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of Nielsen

MAKing my home smart HOW DO I CONNECT MY HOME?

Shopping for Smart products Source: Home Depot

REGULAR (non connected) PRICES SMART (connected) vs. REGULAR (non connected)

Thermostats , Door Locks SMART REGULAR Source: http://www.homedepot.com

Wall Switches , Outlets , LED BULBS (60W) SMART REGULAR Source: http://www.homedepot.com

Smart Bridges Sources: http://www.homedepot.com, http://www.smarthome.com

Monthly fees NO Monthly fees

Smart Thermostats can Save 10-15% on Energy costs but many Smart Home products don’t pay for themselves in cost savings Sources: https://nest.com/blog/2015/02/02/the-nest-learning-thermostat-saves-energy-heres-the-proof/ http://www.techradar.com/us/news/world-of-tech/forget-the-internet-of-things-the-internet-of-data-is-where-it-s-really-at-1302978

Consumer benefits tend to be primarily Convenience and Security Sources: http://www.icontrol.com/wp-content/uploads/2015/06/Smart_Home_Report_2015.pdf

High prices and Long lifespans means market growth will Likely be slow Source: http://www.businessinsider.sg/the-american-smart-home-market-2015-slide-deck-2015-8

Another issue is the limited interoperability and lack of a universal IoT standard Sources: http://techbeacon.com/state-iot-standards-stand-big-shakeout http://www.dispatch.com/content/stories/business/2015/06/29/troy-wolverton-smart-homes-require-devices-to-be-compatible.html

Consumers are increasingly Concerned about Privacy Risks and protection of their personal data Sources: http://www.consumerreports.org/cro/magazine/2015/06/connected-devices-and-your-privacy/index.htm https://www.trendmicro.com/us/security-intelligence/research-and-analysis/internet-of-things-connected-life-security/

EMERGING TECHNOLOGY STILL IN ITS INFANCY Source: Gartner August 2015 https://www.gartner.com/newsroom/id/3114217

Product SALEs and Consumer interest are already slowing down Sources: http://www.argusinsights.com/connected-home-2015/ http://fortune.com/2015/06/17/consumers-smart-home/

What could be done to re-ignite growth?

One key factor is that smart homes generate lots of data about their users Source: http://www.nytimes.com/2015/01/08/technology/personaltech/ces-security-risks-from-the-smart-home.html

“ ” The data rush: information about you is 21st century gold CNN - Nov 13, 2014 Source: http://www.cnn.com/2014/11/04/tech/gallery/big-data-techonomics-graphs/

“ ” The Internet of Things is really an Internet of Data. Tech Radar- Sep 10, 2015 Source: http://www.techradar.com/us/news/world-of-tech/forget-the-internet-of-things-the-internet-of-data-is-where-it-s-really-at-1302978

That data can be cross-referenced and analyzed to generate valuable insights about consumer lifestyles Source: http://www.techradar.com/us/news/world-of-tech/forget-the-internet-of-things-the-internet-of-data-is-where-it-s-really-at-1302978

Lifestyle Data could Produce more accurate audience segmentation Source: http://www.nielsen.com/us/en/solutions/segmentation.html

And audience segmentation is used to target advertising to consumers Source: http://www.nielsen.com/us/en/solutions/segmentation.html

Could better ad targeting be One way to extract more value from The Connected Home?

That captured value could be used to subsidize the product costs consumers have to bear today

A lower Price barrier would likely appeal more to The mainstream consumer and accelerate Adoption

And pave the way for an Ad-supported Connected Home ecosystem

This has happened before with tElevision then the Web and now mobile

This is already starting to happen with some Connected HOME products

Amazon LAUNCHED “special offers” to subsidize Part of the COST of Kindle Source: http://www.amazon.com/gp/product/B00I15SB16

Insurance companies ARE Starting TO offer Free Nest Protect Smoke detectors AND monthly discounts Sources: http://blogs.forrester.com/category/connected_home http://fortune.com/2015/06/17/nest-protect-insurance/

Device Manufacturers could offer Similar pricing options “supported by ads” THAT leverage personal lifestyle data

different types of subsidies might emerge depending on device Use cases and types of collected data

example: Connected Coffee Machine

example: Connected toothbrush

example: Connected Washer & Dryer

example: Face Recognition Camera

There are opportunities to further explore AND INNOVATe AROUND ad-supported models for the connected home Market

Comments & Questions