The exhibition
For once got to see all that was on show in the booths as there were four to visit. This was surprising as the show is already in its third year, but also gave a feel of being part of a closely guarded secret

Motorola was showing their 4HOME acquisition of October last year. This is a software platform for service providers including energy companies. The service provides a home-control and monitoring platform residing in the cloud.
The message to telecoms operators is that as VOiP is commoditized, this approach can add value. This idea was echoed during the conference by the Telco speakers like Ann Shaub of Verizon.
Use cases revolve around triggering cameras and door locks for example to let delivery man in or check if the kids haven’t left the lights on or have they arrived home after school.
4Home call this “assisted living” and hope to improve energy management. The platform’s concept is to create “scenes”, like going-to-bed or watching-a-movie.
4Home claim their Unique Selling Point is being able to link the scenes.
The demo on site was of an extremely basic Web interface to create such scenes. Clearly such a system can be useful, but needs to be integrated into an overall offering to really shine. I expect the Moto execs will get some compelling bundles together from their portfolio.

I was surprised to see T&W in another of the sparse booths. They are a Chinese hardware manufacturer of CPL, modems and the like, founded in 1991, they expect a 600M$ turnover for 2011. They have 7000 employees, 1000 of which are engineers. They were showing optical stuff: GPON (mainly for Europe), EPON (for Asia) and what they called point2point (for the connection to the home, to “replace last mile”), but their core business in DSL routers (over 20M units shipped per year). The message I got out of talking to them was that optical is the future I suppose this message comes from DSL margins having been commoditized to smithereens.

Twonky has a far sexier name than anyone else on the show and I had never seen a booth with quite so many goodies on display, but they didn’t give me much in the end. Twonky is a US company with development teams in Berlin and a presence in Basel & Tampere, they are the part of Packet video that Alcatel Lucent strangely didn’t buy almost a decade ago. They now belong to NTT DoCoMo. To position their home connectivity products, think of them as competing with Awox that I have written about a few times.
Like Awox, they are DLNA zealots and have software in the field. Western-Digital Media players constitute their largest installed base. They also equip some routers but they came to the show to target operators of all shapes & sizes.
I was impressed with Leon Chicheporte’s honesty when I told him about the inconclusive DLNA tests I had done in my home (see here). He said that 2 years ago we were only half way to usability for the end user, and that now we’re almost there. Note the ‘almost’. That kind of honesty makes me want to do business with a supplier.

3view is a new kid on the block in the STB-with-a-service-behind-it neighbourhood. Founded in 2009 and running out of central London, they are still independent and run off private funds.
They claim to be the 1st Z-wave enabled STB. The platform runs on the SD8655 chipset with a 500GB HD and twin DVB-T2 tuners. In the UK they are a consumer brand that deliver a YouView experience before YouView is ready, competing with the likes of FetchTV. The motto on the booth was just three words: Watch, Search and Interact which I thought was pretty slick marketing although I didn’t get a chance to check if they deliver on the promise.
The BBC iPlayer is already on board and they plan to have SkyPlayer by Q3 this year. Adaptive Bitrate Rate is supported over IP. Current retail price is £299 and the device has been shipping since Christmas from John Lewis and Amazon. They can deliver a white-label box to this spec for a BOM (Bill of Materials) of around £170.

The conference

I listened in to almost all of day one of this two-day conference and tweeted live from my @nebul2 account. The conference gave me the impression that we may not have peaked yet on the hype cycle i.e. there might still be more hype before this becomes really real. We also still need some more convincing use-cases to see the true value of a connected home.

Operators are taking the connected home seriously. It’s another way to avoid commoditization especially where content-based services are not delivering. Energy control is a promising feature for Verizon. It helps the operator onto the feel-good green bandwagon. But Ann Shaub underwhelmed me with the use-cases Verizon is working on for home automation. Her favourite was “Sleep mode” where you “just hit one switch for all doors to be locked and lights turned off, no more fumbling around in the dark…”. It sounded a bit like using a sledge-hammer to push a drawing pin into a soft wall. She did however make excellent business sense when pointing out that STBs are still very expensive and difficult to keep relevant over the full (accounting) lifespan of the device. Convergence between the STB and other devices still remains to be clarified.
Ann went on to tell us the key marketing messages for Verizon’s connected home initiative: it’s about “Peace of mind” & “ease of use” and not about “saving money”. The current pricing model is a $9,95 subscription with devices being slightly subsidised. Verizon doesn’t want to get into CPE business. The current trial will turn into a soft launch very soon, with a hard launch still a bit further away.

Paul Berriman, the industry veteran from PCCW in Hong Kong, gave a broad talk about the overall strategy there. The journey from Fixed line to TV to PC to Mobile phones to Tablets & Games consoles now has to go through the connected home so as to get it all to work together. I agree when he says that getting all the devices to interoperate is going to be a real challenge, but that interoperability will become a USP once it does work. He spoke of a special focus at PCCW on enabling the free flow of content throughout the home but I think that may still be out of reach for premium content as rights owners stay too picky on DRM. “NOW 360” tries to capture ALL the screen usages of PCCW customers whatever the screen. Paul finished with one of those simple “why didn’t I think of that?” questions: health has been targeted BY operators for years and they have already spent a lot on it, but as fitness requires the same kind of infrastructure and has an early-adopter target market to boot, why not start there? Makes sense, so maybe will see Runkeeper types of apps from operators …

The conference organisers then did a strange thing. A video of a presentation from IPTVWF a few months ago was shown. In the audience we all looked at each other wondering what was going on. I doubt anyone listened to much of the Telecom New Zealand presentation, we were so bemused by this strange process. I am green, but this was pushing recycling too far.

Raoul Wijgergangs of Sigma Designs came on next to say that the key to the connected home is already here in the form of the G.hn standard. He promised products with a bandwidth 2,5 times faster than today’s HomeplugAV, before the end of the year. The prototype devices he showed looked so small that even if the STB remains part of the ecosystem we’ll have to stop calling it a box. I agree with his view that home automation is the “low-hanging fruit” of the connected home, but I wish he’d told us what SD think lies on the higher branches, out of sight.

Thomas Kleist of Native made an interesting point during the next panel session: exclusivity is an OK entry point for operators, but over time openness (i.e. apps) will be the winning strategy.
On the same panel Steve Koenig of the CE Association in the US illustrated how energy is creeping into CE purchasing decisions (85% of buyers care about it compared to 95% for price & only 57% for brand). He went on to say that Americans are driven to reduce energy consumption only because of cost. Doh! That got me wondering if taxing energy, as we do in parts of Europe, will slow down the connected home…

The next panel on "Monetizing the digitized home" had just 2 panellists, which poses the question of whether the subject is addressable yet. Swisscom was pessimistic on the connected home business model because the telecoms budget is fixed for most homes, so revenues has to come out of an existing spend. The question is what’s going to give?
As a vendor, Twonky was much more upbeat on the connected home’s business prospects, pointing out that as the TV will remain the best screen, and other devices will always be better for interaction, the secret to raising ARPU will be linking these two champions CQFD.

Tim Wright, one of the two Sony speakers, told the conference that the Ultraviolet common file format (CFF) contributes to interoperability within connected home and is complementary to DLNA. He made the case that this new industry initiative will reduce costs and not increase them for operators. I have yet to witness anything from the security industry reducing costs, but I do live in hope.

We then moved on to standards for the connected home. Rami Amit from Jungo was refreshingly honest in stating that DLNA streamers almost work, but not quite yet. Guilhem Poussot of Vodafone said that the next decade is going to be about user experience. When prompted from the audience about “whether standards are for losers” he boldly retorted that standards are for winners and in any case we have to beat Apple.
Another issue raised from the audience was on the openness of standards "the more open a standard, the easier it is to hack, so do we want an open standard in the living room at all?” When the chairman pushed even further by asking the panel if he’d ever get a virus on his TV, the question was politely ignored.
Helen Anders, a lawyer on the panel, reminded us that there have ALWAYS been competing standards like Beetamax vs. VHS, and she saw no reason that this will be any different for the connected home.
On the down side for standards Roger Blakeway of the SCTE couldn’t see Sky moving away from their box to any kind of open system.
This pessimism was countered by Sony’s Renaud Di Francesco who said that barriers put up by operators would soon be overcome by Wifi or LTE or some other pervasive technology.
Karl Tempest Mitchel from AirTies seemed less committal stating that the jury is still out as to which one it’ll be, but that one device will control content in the home.

Andrew Ladbrook an Informa analyst closed day one with some figures from the latest study on the connected home that he urged us to buy.
Games consoles will not grow as fast as Connected TV or Blueray, although they will become mainstream and be VERY connected (contrary to connectable Blu-ray that will most often not be connected in the home). Informa believes that Media-streamers à la Apple TV will remain niche.
Ladbrook made an interesting and controversial point on "Video not needing QoS" as seen by OTT boxes like those from Telstra (Netgem) or Telecom Italia (Cubovision) that he says are doing fine. Less QoS means less CAPEX & less OPEX. I’m not sure if this is linked to the connected home debate, but we’ll be seeing very soon if this strategy pans out over more than a quarter or two.
Informa wrapped up with some strategic advice, on defensive opportunities with multi-room offerings that enable connected home and reduce churn towards OTT providers. He finished by suggesting that the next-best defensive opportunity is improving home networking because that too enables the connected home as seen by Apple’s Airplay.