Results of the Latest Market Research on Connected

Results of the Latest Market Research on Connected Homes Ronald J. Zimmer CAE President & CEO Continental Automated Buildings Association http: //www. CABA. org Linked. In Profile

LANDMARK RESEARCH “State of the Connected Home Market” Emerald Sponsors Diamond Sponsors

U. S. Households with HANS and i. REM Nets CABA Connected Home Roadmap 2010

Corning – A Day Made of Glass

Summary: Benefits & Barriers Remote control, lower energy bills, safety & security drive interest in the connected home; ease of use matters to those who like the connected home Top Connected Home Benefits Total Online Consumers 18 -64 (% Range for US & Canada) Remote control and having an easier way to control are related concepts Remote control from anywhere 44%-47% Matters most to: Saving money on energy bills 43%-48% Safety & security 42% Those with the most interest in the connected home Everyone Women Source: CABA’s State of the Connected Home Market 2011 (Those least interested in the connected home care most about saving energy) Easier to control 19%-29% Those with the most interest in the connected home Men

Among energy consumers, the list of benefits is the same as for the general consumer population—remote access, saving money and safety/security Top-3 Connected Home Benefits Total Online Energy Consumers 18+ Control & monitoring (net) Energy (net) Ability to control locks, alarm, temperature and/or lights while away from home Saving money on energy bills Reducing the amount of energy your home uses Easier way to control & monitor home systems/devices Enhanced safety & security More convenient way to control locks, security, temperature and/or lights while at home More comfortable/pleasant home environment Access to desired entertainment content on any device Simplified management of home maintenance/repairs Source: CABA’s State of the Connected Home Market 2011 Ability to know when household members have arrived or left Nothing US 2011 (n=618) Canada 2011 (n=209)

• Deadline for submission of presentation for the proceedings: January 14, 2011 • Please ensure that you bring a copy of your power-point slides with you on a thumb drive the day of your presentation – if you change your slides please email the organizers ASAP with the updated copy Data from 2009 CABA State of Connected Home

Among energy consumers, potential demand for smart appliances is relatively robust Interest in Smart Appliances • Potential demand is roughly even across device types, though furnaces stand out in Canada. Top-2 Box; % Definitely Buy At a ‘Reasonable’ Price Online Energy Consumers 18+ *Discounted Thermostat Likelihood to Purchase a Smart Appliance Air conditioner At a ‘Reasonable’ Price, When in the Market, Online Energy Consumers 18+ % ‘Definitely’, Top 2 -box Water heater Furnace US 2011 (n=614) Home security system Refrigerator Range, cooktop or oven Canada 2011 (n=209) US 2011 (n=185 -219) Canada 2011 (n=62 -85) Click here for concept description Source: CABA’s State of the Connected Home Market 2011 Dishwasher Washing machine/dryer Demand 36% 30% 37% 35% 34% 32% 33% 41% 31% 27% 31% 23% 30% 26% 30% 25% 30% 27%

In US, both homeowners and renters, young and old are interested in smart appliances; in Canada, older homeowners have highest interest Summary: Target Markets Those very interested in smart appliances: • Own home (79% US; 97% Canada) • Median age (41; 56) • Women (54%; 60%) • Annual HH income $50 K+ (55%; 59%) Women somewhat more focused on laundry & kitchen • Have smartphone (66%; 55%) • Have tablet PC (23%; 39%) • Use/interested in dynamic pricing (55%; 58%) • Use equipment maintenance program (18%; 23%) • Use fiber-optic Internet (17%-US) Those very interested in Home Dashboard/HEMS (US): • Have smartphone (73%) and/or tablet PCs (28%). • Are more likely to participate in a clean energy (16%) or energy management program (17%) with their electric utility than those not interested (4%, 5%). Source: CABA’s State of the Connected Home Market 2011 All consumer types are interested in dynamic pricing– but tablet PCs are more common among those who are (23% in US).

The top motivator for smart appliance purchase: saving money • • Reducing energy usage is less important than saving money in the US, while in Canada, it is nearly as important. Ability to get maintenance alerts and remote access are of lower importance. – Users of alarmed security systems are the most interested group in maintenance/repair alerts (US). * – Smartphone owners are more interested in remote control and monitoring than other consumers (US)* Smart Appliance Feature Importance Online Energy Consumers 18+ Mean Importance Based on 100 -Point Allocation Ability to save money on energy costs US 2011 (n=618) 51. 4 Canada 2011 (n=209) Source: CABA’s State of the Connected Home Market 2011 Rebates or other cost incentives Reduced home energy usage Ability to to get monitor or maintenance/ control repair alerts remotely

Whirlpool Smart Device Network Architecture

CABA Connected Home Roadmap 2010 Willingness To Pay For several high opportunity areas, many of those dissatisfied with their current situation are willing to pay for improved capabilities – Programmable lighting controls – Eliminating phantom energy drain – Individual room temperature and lighting control • 70% Percent Very/Somewhat Likely to Pay 68% 60% 64% 67% 65% 58% 57% 58% 62% 55% 53% 54% 52% = Solid Opportunity Score US Canadian 50%48% 50% 47% 43% rio pe ak pe ps ce m an te en st s nt ad ju m ai er ve ov id ec ei er gy pr R You appear to be most dissatisfied with your ability to perform the following activities. How willing would you be to pay for a better solution to each? Base are those very/somewhat dissatisfied with their current ability to perform each capability ds ns io ic tif no ff ro fo es ia nc pl ap le du Sc he En JLA Strategic Research at ak pe m su co n ity ic tr ec el ck ra r/t ito on M hr io pt gr ro tp en em ag an m y rg En e s n am y ie fic e nc ia pl ap ze na ly A se co n er W at ef g rin ito on m n/ at io rv am m gr Pr o nc em sy st rin ve co w do le ab al du vi di in ol tr C on g s ht w in om ro ph e at im in El og Pr lig p/ to an g ht in lig le m ab ra m te m m co n tr dr ai ol s n 33% 30% Very Strong Willingness >75% Strong Willingness >65% Mild Willingness >50% Weak Willingness <50%

Smart Grid Video Consolidated Edison Co. of New York

Smart Meter and HAN

Canadians are generally more familiar with dynamic pricing and smart meters than Americans—though most still know little if anything about HEMS or HANs • Dynamic pricing and smart meters are more familiar to energy consumers in both the US and Canada than other smart grid concepts. Smart Grid Familiarity Total Online Energy Consumers 18+ US 2011 Never heard of it Heard of it, but not much else Know something about it Never heard of it Know a lot about it Dynamic Pricing (n=618) (n=209) Smart Meter (n=618) (n=209) Demand Response (n=618) (n=209) Home Energy Management System (HEMS) (n=309) (n=110) Home Area Network (HAN) (n=309) (n=99) Source: CABA’s State of the Connected Home Market 2011 Canada 2011 Heard of it, but not much else Know something about it Know a lot about it

US: Energy & Green Living Opportunity Landscape There is a substantial market opportunity for energy reduction products/services: Systems that track where and when energy and water is being consumed • Programmable lighting controls Products that schedule and control appliance usage • Analyze appliance efficiency Products that allow users to centrally control room temp and lighting electricity consumption • Monitor/ track • Water conservation/ monitoring system • Off-peak appliance scheduling • Energy management program Over-Served Table Stakes 0 • Automatic maintenance notification • Programmable window covering • Eliminate phantom drain • Individual room control Hi gh So lid O pp or tu n ity >1 Allowing energy provider to remotely adjusting temps Limited Opportunity O Ex pp or O tre pp m tu ni or e ty tu ni >1 ty 2 >1 5 • • • Appropriately Served CABA Connected Home Roadmap 2010 Under-Served Percent top 2 box Satisfaction and Importance scores JLA Strategic Research

CABA’s Energy as a Managed Service Study Member Participants 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 3 M Company Bell Canada Best Buy Direct Energy Freescale Semiconductor Honeywell International Ingersoll Rand/Trane/Schlage Intel Corporation Landis+Gyr Microsoft Corporation TELUS Tyco Electronics Whirlpool Corporation Research Supplier: POCO Labs Project Manager: Direct Energy

CABA’s Energy as a Managed Service Research • Consumers would change behavior based on TOU. • TOU pricing on consumer behavior compared. • Preferred data sampling rate was cost/day. • Consumption behavior would change if energy savings were met. • EMS adopters are also into “green” behavior. • Five key segments of consumers were identified.

The Home and Beyond from a Telecom perspective Courtesy: Zig. Bee Alliance

Broadband Enables Intelligent MTUs

The Verve High Rise Condominiums – Energy Savings Model Lights 12% Energy Savings 35% Receptacles 15% Space Heating 18% Domestic Hot Water 5% Fans & Pumps 12% Source: CABA’s Convergence of Green and Intelligent Buildings 2008 Space Cooling 3%

Source: Evaluation of the Impact of Sub-Metering on Multi-Residential Electricity Consumption and the Potential Economic and Environment Impact on Ontario

Lighting Systems Proportion of Projects by overall integration Multioccupancy residential, 0% Source: CABA’s Intelligent and Integrated Buildings Technologies: Market Sizing in North America 2011

Fire Detection Systems Market size by end user vertical market High end multioccupancy residential, 6% Source: CABA’s Intelligent and Integrated Buildings Technologies: Market Sizing in North America 2011

Security Systems Market share distribution by end user, 2008 High end multioccupancy residential, 1% Source: CABA’s Intelligent and Integrated Buildings Technologies: Market Sizing in North America 2011

Environmental Controls Integration by building type in the North America 2008 High end multi-storey residential Source: CABA’s Intelligent and Integrated Buildings Technologies: Market Sizing in North America 2011

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