CABA Vision

2. CABA Vision “The knowledge-based forum forindustry leaders who advance the use of technology and integrated systems in the global home and building industry.”

3. CABA Board of Directors • Martin Cullum – Bell Canada – Chairman • Leo DelZotto – Tridel Corporation – Vice-Chair • Roy Kolasa – Honeywell International – Vice-Chair • Robert Becker - Leviton Manufacturing Co., Inc. • Jonathan Cluts - Microsoft Corporation • Jeff Cove - Panasonic Corporation of North America • Jonathan Cowper - AT&T • Dennis (DJ) Crane - Invensys Controls • Carin Falconer - CompUSA, Inc. • Trevor Foster - Trammell Crow Company

4. CABA Board of Directors 11.Pete Griffin – RadioShack 12. Robert Huggard - Direct Energy 13. Richard LeBlanc - Siemens Building Technologies, Inc. 14. Steve Nguyen - Echelon Corporation 15. Carol Priefert, Whirlpool Corporation 16. Gene Shedivy – Trane 17. Andrew Stroede - Panduit Corp. 18. Wolfgang Wagener - Cisco Systems, Inc. 19. Ron Wilson - Vantage/Legrand 20. Ron Zimmer, Continental Automated Buildings Association (CABA)

5. CABA Focus • CABA’s Research Council • IHA Originally founded as a non-profit in 2000 • Comprised of most influential companies in North America • Recognized as the ‘go-to’ organization • IHA was integrated into CABA on July 1, 2006 • The Continental Automated Buildings Association (CABA) was formed in 1988 • As a market accelerating research arm for CABA, through large-scale pilots and smaller, faster projects that address pressing needs, the IHA-RC provides a way for members across industries to work together to develop and test new, innovative home and commercial solutions under real-world conditions, executed by its members. • The resulting quantitative or qualitative research reports, white papers and executive summaries are made available to Research Council members and at times, the industry at large to support internal business decisions and plans.

6. Membership Full Advisory Board Members: Affiliate Members:

7. How We Organize Ecosystems Approach Career Help me with my career! Entertainment Entertain me! Family Help me take care of my family! • Health & Fitness • Household Chores • Home Systems • Communications / Scheduling • Audio • Video • Audio / Video • Gaming • Productivity • Work Skills • Communications / Scheduling • Commuting

8. Recently Completed Projects Laundry Time: Designed and built the Laundry Time system, which connects a washer and dryer to a home network and delivers messages about the status of the laundry and washer/dryer to home PCs, TVs, and cell phones. After quality and safety testing, the system was approved for installation, and the Internet Home Alliance commissioned Zanthus to conduct a consumer trial of Laundry Time. Objectives of the Laundry Time in-home pilot study were to gauge consumer reaction to the Laundry Time messaging system and its functionality; obtain feedback on the interfaces (phone, PC, TV screen) and system usability aspects; and understand their impressions of the laundry messages that were delivered. • Whirlpool, Hewlett Packard, Microsoft, Panasonic and Procter & Gamble • Project Completed Fall/06. Microbusiness & Small Business Managed Services Needs Assessment Study: to gain intelligence that enables members to offer/utilize informed research on the total business communication solutions desired by SMBs (1-100 employees). • AT&T, Cisco, Costco Wholesale, HP, SupportSoft and Level Platforms • Final report delivered in early February/07

9. Current Projects in Process IPTV2 Interactive: to learn about potential business models for using advanced television programming; explore new advertising potential and interactive capabilities and new message delivery; and create adjunct experiences to live and recorded programming and interactive capabilities. • AT&T, Cisco, Disney, Campbell Ewald, Digitas & Tandberg TV • Conduct research late February/07 • Final report in late March/07 Senior Housing: to identify digital home solutions for the 50 + market to enhance their lives and encourage them to live more independently. • Whirlpool, AT&T, Echelon, Microsoft, Masco, NAHB • Conduct research late February/07 • Final report April/07

10. Current Projects in Process Digital Family/Entertainment Kitchen:to educate the kitchen and bath industry on digital / entertainment consumer usage in the kitchen; and provide an updated view of electronics, appliances and entertainment in the kitchen as it relates to the home. • Whirlpool, Cisco, Microsoft , Direct Energy, Intel, Bell Canada, HP, NAHB, NKBA, HomeCrest • Research Completed March/07 • Build interactive display for NKBA show, May/07

11. Current Projects in Development Subsidized Media / Location Based Advertising Phase 2: to investigate the most promising concepts that emerged from the first study, likely involving subsidized content delivered via cell phone and/or vehicle-based systems such as GPS. • AT&T, GM/OnStar, Cisco, Disney • Proposed launch in mid to late February/07 State of the Connected Home Market 2007:a collaborative effort between IHA-RC and Information Storage Industry Center (ISIC) at the University of California, San Diego, seeksto generate findings on the state of the market for the three connected home ecosystems of interest (family, career and entertainment); and to provide consumer insights designed to facilitate the generation of new product/service concepts. This program will provide a general understanding of each ecosystem, including emerging trends.

12. IPTV – Consumer PerspectiveDigital TV Demand Study, Jan. 2006 : IPTV Overview • Worldwide Subscribers • 2006: 8.0 million • 2010: 50.7 million • (Multimedia Research Group) • Biggest deployment: Europe • Next biggest: Asia • Trailing: U.S. 2006: 350,000 subscribers (Infonetics Research)

13. Goal for Consumers - IPTV TV Channel Package Preferences (Top-2-Box; Very Desirable) • Better TV programming choices for less money • A la carte or flat rate channel selection is desired Á la cartechannel selection Flat rate channel selection Base TV channel package, plus á la carte Tiered channel selection

14. Goal for Consumers Desirability of Video-Related Functionality (Top-2-Box; Very Desirable) HD channels Search program guide Parental Controls • The most desired aspect of IPTV is HD channels, followed by search-engine-like program guide. Video customization Program guide thumbnails Program advisor Multiple Picture-in-Picture

15. Profile of Likely Adopters - IPTV • College-educated men age 35 and older • Dual-income households with annual incomes of $75K or more • More likely than non-adopters to... • Use an Internet-based phone service • Subscribe to a premium satellite TV service • Have access to PPV programming • Own an HDTV • Own a standalone DVR

16. Home Networking Study This research was conducted during Spring 2006, in two phases: Phase 1 –Channel Interviews • Installers/integrators. • Tech home builders. • PC service providers. • Other sellers of network systems, components and services. Phase 2 –Consumer Focus Groups • Decision-makers from multi-PC broadband households. • DIY network owners. • Advanced network owners. • Integrator “intenders.”

17. Home Networking StudyConclusions & Recommendations Consumers don’t think of networks as “networks,” but rather, as devices that happen to link to the Internet or each other. HDTV and digital audio are the most desired future applications. Interest in home energy managementis growing. Users want “experts” to help with decision-making and installation. They also want (but rarely get) personalized help with learning how to use their systems once they are installed. Customized, intuitive user interfaces help users get the most from their systems. Consumers are willing to tolerate security risks and relatively slow wireless speeds for the convenience of access to the Internet and to digital entertainment.

18. Home Networking StudyConclusions & Recommendations • Educate consumers about home networking benefits while addressing concerns about price. • Avoid term ‘network,’ focus on solutions instead. • Offer service and support for installation and maintenance. • Collaboratewith customer, cable and Internet service providers to minimize installation issues. • Offer solutions with intuitive, customizable user interfaces, and train customers in their use. • Offer modularsystems that allow easy add-ons as interest and budget allow.

19. Digital Youth Study Youth Influence on Technology Buys Laptop computer DVR Subscription Broadband Internet HDTV TV Color laser printer Desktop computer External hard drive Standard color inkjet printer All-in-one inkjet printer Child made purchase by themselves (8) No influence (1) Some influence (2-5) Great influence (6-7) QK. How much of the decision to purchase these products was influenced by children aged 8-18 in the family? (Base=both survey respondents and non-respondents who own the item)

20. Broadband Internet Frequency of Broadband Use by Family Members Most days Several times per week Once per week to once per month Rarely/never Mother (A) Father (B) Age 8-10 (C) Age 11-14 (D) Age 15-18 (E) Parents Children Q39. How often is the item used by these family members? Letters denote statistically significant differences among segments.

21. Youth Technology Interests Recent Video Related Activities Done in Past 12 Months Purchased a DVD On TV, watched a free Video on Demand program/movie From the Web, downloaded or streamed a free video Child did it On TV, purchased a Video on Demand program/movie (not free) Parent did it for child Has not done From the Web, purchased a video and downloaded it Q45. In the past 12 months, has a child in the household aged 8-18 done any of these? (n=805)

22. Conclusions Trends in Families with Kids • Address Mom the decision-maker for kid-specific items – iPod, cell phone • Address Mom for standard technology equipment: desktops, printers, broadband • Focus efforts towards Dad who chooses the latest technology items – laptop, Media Center PC, External hard drive, DVR • PCs proliferating with each-person PC ownership. • Laptop ownership growing by household. They belong to parents though (Dad). • Plan for broadband and PC stations in bedrooms.

23. Conclusions Trends in Families with Kids • Plan for digital music downloading, watching video on the Web, downloading games. • Continued high interest in console/handheld games (especially boys). • Cell phones everywhere, carried by youth 11-up – and maybe younger.

24. Microbusiness & Small Business Managed Services Needs Assessment Study: Change Initiatives The product mentioned most often as part of a potential change initiative is the PC. This category is followed in popularity by Web hosting, WiFi networking, VoIP and local & long distance telephone service. • Small businesses are more likely than their microbusiness counterparts to express an interest in a VoIP-related change initiative. Q43. Regardless of current initiatives at your company, which of these is your company most interested in implementing, restructuring, or upgrading? Letters denote statistically significant differences among segments

25. Change Initiatives Most potential change initiatives involve the installation or set-up of IT or telco products; generally, target companies are split on the merits of internal vs. external services.

26. Change Initiatives The top-ranked vendors tend to be original equipment manufacturers (OEMs) or alternately, primary service providers (in the case of telco). Target companies mentioned Dell most often, followed by HP, Verizon, Best Buy/Geek Squad and Staples. Q46. When you think about these vendors, which ones provide the best service experience?Letters denote statistically significant differences among segments

27. Conclusions & Recommendations Target small businesses—organizations with ten to 100 employees. For a variety of reasons, small businesses represent a better target market than microbusinesses. Compared to microbusinesses, small businesses tend to have a larger geographic reach, higher revenues and are more likely to own the requisite IT or telco products. Perhaps most importantly, small businesses spend twice or three times as much as microbusinesses on products of interest and accordingly, are more likely to outsource maintenance and/or repair services. Promote key managed services. The five most popular managed services consist of Web hosting; email/messaging services; servers, routers and LAN installation and maintenance; data backup and other, related services; security services; and storage services. These services are typically beyond the ability of small businesses to manage given that many have few, if any, dedicated IT/telco support personnel. Establish a local presence and/or partner with an OEM. In the main, target customers prefer to work with local specialty service providers, or alternately, with manufacturer’s directly. Speculatively, these preferences are likely due, in part, to the fact managed services are a nascent market and target customers consider these two outsourcing alternatives the most reliable options. Small businesses are generally risk-averse. This orientation means they tend to gravitate to known quantities, especially in the case of emerging markets. Strong customer service, that is, prompt service combined with demonstrable technical expertise, is of paramount importance to small businesses. Offer compelling annual contracts. Small businesses have a distinct interest in annual contacts provided there are clear, substantial cost-savings compared to a pay-as-you-go arrangement.

35. State of the Connected HomeEntertainment: Media Interests at Home Media Entertainment at Home % Very Interested (Total Online HHs n=618) 2006 Brings: DVRs in 25% of homes Internet access HDTV prices drop and sales are up Movies Nielsen: Anytime Anywhere Media Measurement TV programming Recorded Music Google Buys YouTube Personal photo (view on computer or TV) Comcast to sell movie downloads to PC/TV/Portable. Home video/movies Q42; Letters denote statistically significant differences among markets.

36. State of the Connected Home Entertainment: Media Interests “On The Go” Media Entertainment On-the-Go % Very Interested (TOTAL Online HHs; n=618) 2006 Brings: Slingbox AV & Pro Slingbox DS? Recorded music Internet access Audible.com Radio music programming Music Phones You-Name-It Phones Movies TV programming Video iPod Zune Audio books Q44; Letters denote statistically significant differences among markets.

37. State of the Connected Home Family: Interest in Home Automation 2006 Brings: Home energy prices jump Rising concern about effect of energy consumption on environment Advances in control technology (centralized, Web, wireless, voice) Home Automation % Very Interested Home energy consumption Heat/ventilation/ air conditioning Outdoor Lighting Indoor Lighting Total Online HHs (n=612) Primary Market Consumers (n=318) Mass Market Consumers (n=294) QY41

38. American Digital Dream Asset Management Digital Entertainment Migration Digital Entertainment Needs Assessment (home & in-vehicle) Digital Youth Energy Management Future of Collaborative Work Health & Fitness Needs Assessment Health and Wellness Portal Home Automation Hub Home Network in a Box Home Networking Barriers & Opps. Home Structured Wiring Internet-Enabled Education IPTV Phase I Laundry Time Needs Assessment Laundry Time Pilot Mealtime Mobile Worker Needs Assessment Mobile Worker Online Family Calendar OnStar at Home Personal Media Storage Safe, Secure and Comfortable Subsidized Media and Location Based Advertising Phase I TV Advisor Video Experience POC   Sampling of Past Projects & Pilots