Family Ecosystem Forum 2007 Ecosystem Review

Slide 2 CABA IHA-RC 2007 Family Forum Outline Who is Zanthus? Connected Home Ecosystem Overview State of the Connected Home Study – Key Findings

Slide 3 CABA IHA-RC 2007 Family Forum Automotive Digital entertainment Digital kitchen Home PC networking Telecommunications and Internet Video gaming Zanthus has a long-term relationship conducting research on behalf of the Internet Home Alliance Research Council (IHA-RC), now part of CABA (Continental Automated Buildings Association).

Slide 4 CABA IHA-RC 2007 Family Forum Outline Who is Zanthus? Connected Home Ecosystem Overview State of the Connected Home – Key Findings

Slide 5 CABA IHA-RC 2007 Family Forum A market taxonomy provides a common reference, encourages comprehensive analysis, reveals opportunities A market taxonomy is a conceptual framework used for analyzing business opportunities. It should: Provide a common language or series of reference points. This facilitates communication with consumers and other members, and can lead to shared business strategies. Help ensure that complete information is analyzed. It should be broad enough to cover the entire marketplace, while providing a convenient way to divide the market. Provide a unique perspective on the market, revealing opportunities previously hidden.

Slide 6 CABA IHA-RC 2007 Family Forum Ecosystems Connected Home ‘Ecosystems’ map to consumer needs at home and beyond, is platform-independent Family “Help me take care of my family” Career “Help me with my career” Entertainment “Entertain me”

Slide 7 CABA IHA-RC 2007 Family Forum Ecosystems Each Ecosystem reveals insights about consumer evolution Family “Help me take care of my family” Career “Help me with my career” Entertainment “Entertain me” Promises the greatest immediate return. Music Video Gaming Has the most unmet demand. Home Systems Family Communications Scheduling Health & Fitness Community Mobile workers are key. Productivity Communications Scheduling Commuting Work Skills Work/Life Balance

Slide 8 CABA IHA-RC 2007 Family Forum Ecosystems Zanthus IHA-RC research covers all three ecosystems FamilyCareerEntertainment iPTV Demand (I & II) Digital Entertainment Needs Assessment Digital Kitchen Laundry Time Pilot Mealtime Pilot Health & Wellness Safe Secure & Comfortable Asset Management Future of Collaborative Work Mobile Worker Pilot SMB Needs State of the Connected Home 2003 State of the Connected Home 2005 Home Networking Digital Youth Senior Living Custom Mobile Advertising

Slide 9 CABA IHA-RC 2007 Family Forum Outline Who is Zanthus? Connected Home Ecosystem Overview State of the Connected Home – Key Findings

Slide 10 CABA IHA-RC 2007 Family Forum The features of the connected home exist today; they are not dreams of tomorrow. This home is connected in the sense that normally independent systems are linked into one centrally controlled system, which is called a home network. For example, your PC, television, lighting and heating controls, and home security system can all be linked to a home network. You can control various parts of your home through your home PC or a variety of mobile devices, including your TV remote control. For example, in a connected home you could turn up the heat using your TV remote control. Or you could see your phone’s caller ID on your TV screen. When you’re away from home, you can control your home network using any device with Internet access, like a cell phone, or by going to a special, secure Web site. Right now, manufacturers and service providers are developing products and services for the connected home. In general, these are products and services designed to provide entertainment programming, automate common household tasks, and let people communicate with each other more easily. The connected home will be reliable, easy to control, and easy to upgrade. You will not have to rewire or spend an extravagant amount of money to start setting up a connected home. In 2005, about one-in-five online consumers considered the connected home concept ‘very appealing’

Slide 11 CABA IHA-RC 2007 Family Forum Career Family Q39A-Q39E Cross-Ecosystem Interests % Very Interested, 6-7 Ratings Among Total HHs (n=1,834) Mainstream consumers interested in entertainment technology; leading consumers also interested in family, career Media Entertainment for the Home Automate Basic Home Systems Streamline Routine Tasks Improve Work Productivity at Home Improve Work Productivity While on the Road Entertainment Source: Zanthus IHA State of Connected Home Study, 2005 Total Online HHs (n=612) Primary Market Consumers (n=318) Mass Market Consumers (n=294)

Slide 12 CABA IHA-RC 2007 Family Forum U.S. household ownership of top growing consumer electronics entertainment products (CEA, April 2007) Other growth areas: Replacement TVs Mobile satellite radio Key drivers of adoption are interest in: Time-shifting. Ease of control. ‘Anywhere’ access. Customization. Interactivity. High-definition content. MP3 players HDTV DVRs Digital entertainment achieving mass market potential Mass Market Threshold: 16%

Slide 13 CABA IHA-RC 2007 Family Forum Personal photo (view on computer or TV) Movies Recorded music Internet access Media Entertainment at Home % Very Interested (Total Online HHs n=618) TV programming Home video/movies Source: Zanthus IHA State of Connected Home Study, 2005 Internet is most desired source of home entertainment

Slide 14 CABA IHA-RC 2007 Family Forum Movies Radio music programming TV programming Recorded music Audio books Internet access Media Entertainment On-the-Go % Very Interested (Total Online HHs; n=618) Source: Zanthus IHA State of Connected Home Study, 2005 Internet is near top of list for mobile entertainment

Slide 15 CABA IHA-RC 2007 Family Forum Source: Zanthus IHA State of Connected Home Study, 2005 Online HHs with Online HHs Likely to Have Home Network (n=491)Home Network Interest Current Use Future Use(n=100) Listen to PC music on a stereo22%18%36% View PC video on a TV9%19%31% Access Internet streaming audio via stereo17%15%24% Consumers want to distribute entertainment via home network (especially audio)

Slide 16 CABA IHA-RC 2007 Family Forum Consumer Needs Career Ecosystem Interests Update or develop new work skills Communicate with family and/or friends Remotely access business Remotely access electronic files on your network/computer Get directions while driving QC53_1_15; Letters denote statistically significant differences among markets. Career Ecosystem Interests Top-5 Responses, % Very Interested, 6-7 Ratings Total Online HHs (n=604) Primary Market Consumers (n=296) Mass Market Consumers (n=308) Updating skills, communication, access are key career interests

Slide 17 CABA IHA-RC 2007 Family Forum Top growth areas (CEA): Network routers or hubs Replacement phones (including web-enabled cell phones) Mobile GPS devices Networking & portability spur sales of top career products

Slide 18 CABA IHA-RC 2007 Family Forum Routine Tasks (Top-2 Box; % Very Interested) QY42-QY43Q Streamlining routine tasks appeals to leading consumers Cleaning (general) Running car maintenance diagnostics Drying clothes Communicating with other HH members Paying household bills Washing clothes Total Online HHs (n=612) Primary Market (n=318) Mass Market (n=294)

Slide 19 CABA IHA-RC 2007 Family Forum Indoor Lighting Outdoor Lighting Heat/ventilation/ air conditioning Home energy consumption Home Automation % Very Interested Total Online HHs (n=612) Primary Market Consumers (n=318) Mass Market Consumers (n=294) Source: Zanthus IHA State of Connected Home Study, 2005 Home energy automation and monitoring are appealing to leading-edge consumers

Slide 20 CABA IHA-RC 2007 Family Forum Source: The Diffusion Group (2004), and Zanthus. A critical mass of consumers is poised to take advantage of connected home technologies. Among online households: About 55% have broadband 53% have multiple PCs 28% have a home network Key Technologies Among All U.S. Households Mass market threshold is 16-17% of all households Connected home foundation reached critical mass in 2005

Slide 21 CABA IHA-RC 2007 Family Forum Hype Curve Adoption Curve Time Innovators Early Adopters Moore’s Chasm Early Majority Late Majority Laggards However, foundational technologies not enough – further convergence of networks, devices, content is needed

Questions? Carole Wiedmeyer Zanthus 115 S.W. Ash St., Suite 610 Portland, OR