A Study of Multimedia Service Delivery in the Home for Femtocells By Kelly Yedinak Bachelor of Science in Electrical Engineering Submitted to the System Design and Management Program in Partial Fulfillment of the Requirements for the Degree of Master of Science in Engineering and Management ARCHIVES at the Massachusetts Institute of Technology May 2009 @ 2009 Massachusetts Institute of Technology All rights reserved MASSACHUSETTS INSTITUTE OF TECHNOLOGY SEP 2 3 2009 LIBRARIES This author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part. Signature of Author Kelly Yedinak / System Design and Management Pr6gram May 2009 Certified by__ Michael Davies, 1hisS ~perisoZ Senior Lecturer, Sloacp-Scool of Management Accepted by Pat Hale J " Director, System Design and Management Program This page has been intentionally left blank A Study of Multimedia Service Delivery in the Home for Femtocells by Kelly Yedinak Submitted to the System Design and Management Program in Partial Fulfillment of the Requirements for the Degree of Master of Science in Engineering and Management This thesis considers the case of Ubiquisys Ltd., a femtocell company, and the ability for its products to provide added services to users in the home. The findings include recommendations for software applications, application delivery, timing, and pricing. The actions that should be taken as a result of this study include a few things in both application architecture as well as long-term strategy. First, the femtocell needs to allow communication between the smartphone, the home network, and other smart devices. Secondly, the femtocell has no self-contained interface to the user, and thus will require platform specific applications sold through the smartphone OS or handset vendor. Lastly, Ubiquisys needs to decide on a strategy, including both place and timing, for rolling out services. Femtocell applications require femtocells, which in the next few years will only reach an installed base several orders of magnitude smaller than the smartphone. It is recommended that mobile advertising based free applications should be provided initially while slowly phasing in paid applications in 2011 and 2012. Through application of system architecture analysis and Design Structure Matrices (DSM) to the current and emerging architectures, this paper provides a template for analyzing ecosystems for home cloud services and content delivery. This is achieved through an in depth analysis of two current product architectures. Information drawn from analysis of these systems is then used to make conclusions and recommendations about how a femtocell can provide the greatest value in the home. Abstract Thesis Supervisor: Michael Davies Senior Lecturer, Sloan School of Management This page has been intentionally left blank Acknowledgements First and foremost I would like to thank my fianc6, who has shown infinite patience and support for the late nights and occasional periods of living in separate zip codes that were necessary to complete this degree. I would like to thanks to my parents, who instilled in me the determination to follow my passions in life. To the System Design Management program and its teachers, administrators, and cohorts, my deepest thanks for introducing me to a world of possibilities. To Michael Davies, my thesis advisor, for keeping me grounded and providing a wealth of knowledge for me to build off of. ...I.11-~~1~I.~_~*I1-VI~LV~III.. This page has been intentionally left blank _~1~~X--~~ Table of Contents Abstract ..................................................................................................................... 3 Acknowledgments ................................................................................................... 5 Table of Contents ..................................................................................................... 7 Table of Figures .............................................. ......................................................... 10 1. Introduction .............................................................................................................. 1.1. M otivation......................................................................................................... 1.2. Research M ethod and Approaches.......................................... 1.3. Introduction....................................................................................................... 12 12 13 14 2. 18 Home M edia Architecture ............................................................................. 2.1. 2.2. 2.3. 2.4. Entertainment, Communications, and Information Overview ....................... 18 Overview of the Landscape ..................................... ...... ............... 20 Smartphones................................................................................................... 20 Home Entertainment System ................................................... 22 2.4.1. Television Screens ................................................................................ 23 2.4.2. Audio............................................ ...................................................... 23 2.4.3. Set Top Boxes ....................................................................................... 24 2.4.4. Video Players and Gaming Consoles................................ ..... ... 26 2.4.5. Personal Computing and Peripherals ........................................ ..... . 27 2.4.6. Data Pipe and the Cloud ..................................... .... .............. 29 2.4.7. Portable Electronics, Peripherals, and Other ........................................... 31 3. Voice Convergence: Technology Overview .......................................... 33 3.1. The Fixed M obile Convergence............................................................. 33 3.2. VOIP Software......................................... ................................................... 34 3.3. VOIP Hardware and Software Combination ..................................... ... .35 3.4. VOIP Using 3G........................................ ................................................... 35 3.5. Femtocells .................................................. ........ ................................... 36 3.6. Application and Advantages in the Home ...................................... .... .. 36 4. Putting It All Together ............................................................................................ 4.1. Overview .......................................... ..................................... ......................... 4.2. Linking Computers and Consumer Electronics ....................................... 4.3. Interfaces: Applications, Web Browser, File Browser .................................. 4.4. Synchronizing: In the Cloud or Through a Device ........................................... 4.5. A Distributed System Architecture......................... ................ 38 38 39 40 42 42 5. Applying the Ecosystem Information to Femtocells ..................................... 5.1. Linking the Ecosystem: A Design Structure M atrix......................................... 5.2. The Femtocell in the DSM ................................................................................ 5.3. Overview........................................................................................................ 5.4. Core Ecosystem Pieces .......................................................................... 43 43 49 49 50 5.5. The Femtocell Market..................................................... ......... 5.6. Recommendations and Conclusions ........................................ 51 55 58 6. Appendices ................................................................................................................ 6.1. Ecosystem Matrices ....................................................................................... 58 6.1.1. Home Data Sources............................................................................... 58 6.1.2. Home Consumer Electronics and Computing Devices......................... 59 6.1.3. Home Devices Functional Description ................................................... 61 6.1.4. Home Devices Applications ................................................................. 63 .......... 65 6.1.5. Home Devices User Interface ........................................ 68 6.1.6. Home Devices Platforms and Software ........................................ ............ 70 6.1.7. Case 1: Apple Incorporated ......................................... 6.1.8. Case 2: Sony Corporation of America ..................................................... 72 ..................................... 74 6.2. M atlab D SM s........................................................ 74 6.2.1. Matlab DSM for Sony Corporation ...................................... ............ ................................ 75 6.2.2. List of clusters.................................................... 6.2.3. Larger view of Excel based Sony ecosystem........................................76 7. Bibliography ............................................................................................................. 8 77 This page has been intentionally left blank - li-~l^ : :'-~~~"lli""*"-~"'-~r;i~-~~~~~~ - ^-----~:"--i~~-~~~T---~-l--"%'~='"~~'i:~ Table of Figures Figure 1: Excel manually partitioned DSM of Apple Incorporated ecosystem....... 45 Figure 2: Matlab automated partition of DSM for Apple Inc ................................ 46 Figure 3: List of products in Figure 2 clusters, starting from left to right........... 47 Figure 4: Excel manually partitioned DSM of Sony Corp. ecosystem.................. 48 Figure 5: Calculation of total number of available customers ............................... 53 Figure 6: Calculation of femtocell application market size .................................... 54 This page has been intentionally left blank 1. Chapter 1: Introduction 1.1. Motivation During the fall term of 2008, I participated in Massachusetts Institute of Technology's Entrepreneurship Lab course. I joined with four other students with varied backgrounds to work on an internship style project for the semester that was unique to the group and start-up company that we were working with. Specifically, we were to solve a problem for Ubiquisys Ltd and their femtocell product. A femtocell is essentially a miniature cellular wireless network that plugs into a broadband connection and is targeted for home or small business use. It allows a user to make phone calls and use mobile data over their own broadband connection rather than using a cell tower signal, or in places where little or no cellular signals are received. Our group was tasked specifically with determining a strategic direction and identifying markets for future enhanced functionalities for the product. Although we ended up identifying and targeting a more pressing need for the company and our project, which was the customer value proposition, a very relevant question was brought to light. In the midst of home network, home consumer electronics, and voice convergence, how can consumer electronics devices such as the femtocell deliver services or content to users. In addition, the question of how services and content can be monetized is a pressing concern for a variety of companies. The convergence of mobile communications with the data rich environment of the internet is providing a wealth of opportunities for content and service providers, application developers, and many others. The emergence of the "always connected" culture, through smartphones and digital media players, has the opportunity to drive integration and changes in the home network. This paper seeks to understand what the product architectures for the home network currently are, and what the trends are for the future. Particular attention will be paid to the new role of the smartphone in the home and the emergence of fixed-mobile convergence (FMC) applications. By applying system architecture analysis and tools such as Design Structure Matrices (DSM) to the current and emerging architectures, I hope to identify characteristics of competing architectures, such as level of integrality or modularity and alignment with customer needs, that provide opportunities for service delivery. 1.2. Research Methods and Approaches As this is a rapidly changing market and technology environment, the most viable resources are unlikely to be published books but rather journal papers, news articles, standards publications, etc. Current and future standards for interoperability will be an important part of understanding the interactions between a wide variety of devices within the system to be examined. Objects, processes, and connections will be represented in matrix format using data gathered through reading and research. Information will be drawn from previous work with Ubiquisys Ltd and other market research whenever possible. In order to create a relevant and specific analysis, two cases will be analyzed that demonstrate real and current home network and entertainment architectures. These are relevant as either one of the two companies presented in the cases are likely to be represented in part in many consumer homes. 1.3. Introduction There has been a substantial shift from the cellular phone being a tool for mobile communication to being a multi-purpose tool, augmenting and in many cases replacing fixed, wired systems. Mobile communication is shifting to a data-centric rather than a voice centric point of view, as evidenced by Verizon's recent intent to initially launch their fourth generation (4G) Long Term Evolution (LTE) network without a Code Division Multiple Access (CDMA) signal (Patel, 2009). Within this shift to data centric operation, there are some opportunities to be gained by both the consumer as well as the mobile network operators (MNO), consumer electronics (CE) companies, and application developers. Smartphones offer far more opportunities than just mobile internet. The iPhone apps store is giving the public a glimpse of all that can be accomplished with a smartphone for a platform, as well as proving that the smartphone can be popular among the general public as opposed to only business customers. Portability and compactness are key requirements for portable devices, which is probably why so many device functionalities have been integrated into the smartphone. In seeming opposition to the need for mobility however is shift of the mobile phone back into the home. Slowly, many people are dropping the use of landlines in favor of a mobile phone that provides not only a singular point for receiving communication but also a wealth of information such as contacts, calendars, alarms, and more wherever you happen to be. Into this newly data-rich home environment is where the femtocell aims to be. Its primary value is in its ability to provide improved signal coverage or potentially reduced rates for calls and mobile data. In addition, there are two key functionalities that it will likely provide. The first is a secure connection for the smartphone to the home or business network, and the second is presence detection. Presence detection is similar to location services but with potentially more power to automate or trigger services in the home or office. A simplistic example of a presence based application is a program that allows a femtocell to send a text to a parent at work as soon as a child returns home through detection of the child's cell phone presence. (Day, 2008) Other examples within the home are focused on synchronization and automated downloading from a connected network or Internet. The following is a list of potential application categories for femtocells (Kemppainen et al. 2008). Many are not home specific but assume the ability to have a femtocell almost anywhere. 1. Monitoring: The monitoring category encompasses the features of determining and notifying whether a person, pet, or belonging is "home" or not, and may include monitoring in neighborhood or retail locations. 2. Home Automation: This category is based around the idea of the phone and femtocell as the command center for your home, with the ability to monitor or control things like thermostat, garage door, appliances, etc. 3. Security: The security category is similar to home automation but is based around a home or business security systems such as Brinks or ADT (US based) and adds features such as notification and recording of information obtained from nearby cell phones. 4. Social Networking: This category encompasses interaction with social networking sites and applications such as facebook, yelp, Linkedln, etc. to interact and provide updates, especially location based updates that measure who or how many people may be at a certain club, restaurant, or venue. 5. Advertising: The advertising category includes information pushed to phones or pulled by users based on location (ex: nearby retail etc.), applications (ex: calendar), profile info, etc. i 1I._I -_l..^_..il .- )__ ..- . ii.-irl_~_lll--i-~X~-~ll___l_~br~~_l~ 6. Information Reference: This category is quite general and includes the lookup of reference documentation which may be located on the internet or a femtocell networked computer. An example would be a "tour guide" (text, audio, or video) that could be pulled by a user near a historic site or museum. 7. Synchronization: Synchronization through a femtocell should be a largely passive process, where items such as calendars, profiles, settings, video game characters or avatars, etc. are updated and synchronized amongst all devices passively while a user is connected to a femtocell. 8. Micro-Payments: Essentially this category seeks to bring paypal or credit card like functionality to the phone through its connection to a store femtocell. Other behavior which may be enabled through this would be advanced ordering and payment or "be your own waitress". 9. Device Control: The general idea of this category is to turn off ingoing and outgoing call or texting capabilities for nearby cell phones. This is applicable in theaters, schools, and potentially homes as well. 10. Tracking: This category is partially linked with social networking. It focuses on knowing the location of a person, pet, or object within a home, neighborhood, mall, etc. and tracking their movement between femtocell zones. 11. Capacity Utilization: This is another category that could be partially linked with social networking. The idea is to monitor how full a restaurant, venue, or club is, based upon the number of cell phones present, as well as potentially categorizing those people. An example is to link with "Open Table" to find out what restaurants are or aren't full tonight. Especially for the category of synchronization, which is likely the most usable and easily implemented category, there is a requirement to understand both the computer architecture and the consumer electronics products that can link to a phone through a femtocell. Also, there is a larger question of where applications and functionality should reside. Several organizations have been formed specifically with the purpose of identifying future functionality for Fixed Mobile Convergence. Specifically, the Fixed Mobile Convergence Alliance (FMCA) has created a suggested requirements document designed around convergence of mobile phones with the internet and home network ("FMCA Convergence Application Scenarios"). The focus of this document is primarily on synchronization and multimedia delivery and communication services. For the most part, the functionality that is discussed hinges mostly on mobile network capabilities, with some mention of WiFi primarily for pointing out the ability to reduce mobile broadband costs to the user by using WiFi instead. There is very little discussion of how intelligent mobile devices will interact with fixed infrastructure, such as the home network and entertainment systems. In the following chapters I lay out the home networking and entertainment systems as they are today, and mention some of the key points for convergence that is happening now. Following that I provide a brief overview of mobile and fixed voice systems, as well as illustrating the shift of voice from a single method of delivery to multiple ways to deliver voice utilizing data connections. After discussing some of the software and networking infrastructure that connect these systems, I present two specific cases to be analyzed more thoroughly. The first is the product ecosystem of Apple Incorporated, and the second case is the product ecosystem of Sony Corporation of America. Information drawn from analysis of these systems is then used to make conclusions and recommendations about how a femtocell can provide the greatest value in the home. 2. Home Media Architecture 2.1. Entertainment, Communications, and Information Overview Bandwidth to the home is increasing and mobile networks are beginning to converge with fixed infrastructure. Primarily these networks are providing communication, entertainment, and information. These are very broad categories but it is important to note that the consumer purchasing a data plan through their cable, DSL, or fiber optic provider is purchasing a connection to an information network, but has little value in the connection itself. Thus, above a certain minimum level of quality, differentiating the connection among different providers becomes difficult. Services provided over a network, however, provide high levels of value and in some instances, such as cable television, can provide increasing levels of revenue rather than the decreasing numbers commonly found in commodity products. According to the Federal Communications Commission (FCC) cable TV rates have risen at about three times the rate of inflation ("Cable rates' endless rise"). More than one industry has picked up on this trend for offering services to consumers, however in a converging environment an integrated services platform has the ability to offer far more customer value than disparate services for each personal computing and consumer electronics device. Within the home, the size of a data connection has only an indirect correlation with the price of a product. This can be easily seen by going to any cable company's website and reviewing their pricing. For a search conducted in March 2009 in the Boston, MA area cable tv offerings ranged from $63 - $115, voice was $30, and broadband internet was $20 (all prices are per month). On the surface, it appears that price correlates less with the bandwidth of the service provided, and more with complexity and variety of the services themselves. Although this isn't a huge surprise, the long-term implications may surprise cable and voice providers more that they'd like to admit. As users gain access to large amounts of bandwidth at cheap prices, the internet becomes an open platform for communications and media delivery. TV and voice services delivered over the internet will be able to compete using the same cable or telecom infrastructure of the standard cable TV and voice providers. Many established firms, however, have the power to offer multi-play offerings, i.e. offer bundles including more than one service, and also have an established presence in the consumer's home. In the near future, services and content provided to the home will prove to be a competitive and dynamic marketplace for the customer, especially for premium content such as Video On Demand (VOD) and premium movie channels like Home Box Office (HBO) or Starz. Content providers are targeting not only the home but also mobile devices like smartphones as platforms for delivering better and more personalized services. Increasingly, the desire to be "always connected" is bringing the phone into the home and making it a part of the home network. A wide variety of device architectures, software platforms, and connection standards can make the integration of any device into the home network challenging. In the near future there are going to be changes in the architecture of the home network, which will both impact and be impacted by the smartphone. With the range of services and consumer electronics available in the home, a truly open and integrated architecture may be very difficult to achieve. The increased openness of proprietary platforms, such as application stores, may pose a significant challenge to open architecture standards. There are a wide variety of pieces to fit together in order to enable seamlessly converged services and applications. 2.2. Overview of the Landscape There are roughly five components of the home media architecture that have different functionalities yet are integral pieces of the complete home media system. Although any architecture could be broken up in various ways, this manner highlights the connections and interdependence of various pieces of the system. The categories are: A. Smartphones B. Home Entertainment System C. Personal Computing D. Data Pipe and the Cloud E. Portable Electronics, Peripherals and Other Category E, "Portable Electronics, Peripherals, and Other", contains products that are less integral to the home media system, however it is useful to consider items in this category as they may benefit from integrating into one or multiple of the other four categories. Also, they may play a role in how the standards for interoperability in the home. 2.3. Smartphones The smartphones category includes similar devices like PDAs, blackberries, pagers, etc. however the most crucial piece for the home media system is the smartphone itself. For the purpose of simplification, single function devices, i.e. those providing only email 20 instead of email and voice, won't be considered individually in this analysis. Smartphones are increasingly driving an "always connected" culture and are shifting focus away from fixed phones and computers as portals for communication and information access. Increasingly, smartphones are also becoming portals for multimedia delivery. There are several features that are key for integrating into and shifting the home media system. First, the smartphone offers an "always connected" or always accessible feature that was previously absent in the home network. Unlike the cultural phenomenon of losing the television remote control, the smartphone tends to be something a person keeps with them, often in a pocket, on a belt clip, or at the least within reach or earshot. As a connected device, either through WiFi or cellular data, smartphones offer the capability to access applications in the cloud or devices on the home network. It can very easily shift to becoming the primary control and occasional access point for home media. Another important feature of the Smartphone within the home is personalization. A majority of homes for which one household member owns a Smartphone also have at least one other cellular phone or smartphone owner in the house. Moving content and access control to a smartphone allows the owner of that device to personalize his or her content. No longer do "favorites" have to be logged for every member of the household. A user may soon be able to control and prioritize only their own content without having to manage or sort through information from others. A final feature to take note of is the storage capability and portability of a smartphone. This feature allows multimedia, including movies, songs, etc., to be downloaded when a fast wired or wireless connection is available, and played back at a later time. The iPod feature on an iPhone is perhaps the most prominent example of this, allowing users to play back music on airplanes or the iHome docks now found in some hotels. Even with the advent of 4G cellular data technologies such as LTE, price and signal availability may hinder ubiquitous access. Instead of bringing a DVD over to a friend's house to watch, you may simply upload and download it from your smartphone, or stream the movie from its location on your Set Top Box (STB) via a Slingbox from Sling Media. It is unclear how important the Smartphone may be in future media mobility as services and content move into the cloud. Its role as a mobile control and access portal to the home network, however, should not be overlooked. 2.4. Home Entertainment System The Home Entertainment System is a relatively large and diverse category. It includes a variety of consumer electronics that often fall into either a video or an audio system category. Television screens, stereo receivers, speakers, Blueray players, and DVD players all fall into this category. Perhaps the most intelligent device in this category is the Set Top Box (STB) that is commonly used to deliver television and other cable TV programming. The distinction between movies and television programming has begun to blur as networks add movies to their programming, service providers add video on demand, and STB's add the ability to record movies and shows for later playback. Among these changes, the commonality is that of shifting the timing of a program. A less common but increasing trend is shifting the place of a program, ie recording or playing a movie or show on one device and then transferring it to another. 2.4.1. Television Screens The trend in television screens is nothing if not larger and wider, with HDTVs having the newer, wider 16:9 width to height ratio than the previous standard of 4:3 for television sets. Channel switching and selection has largely moved off of the television set and onto the set top box, leaving the screen as nothing more than a 'dumb' box which plays whatever is streamed into it. By eliminating functionality now provided by STBs, screens have become less integrated and more modular in the home media system thus allowing multiple screens to be connected in a variety of locations throughout a home. This allows media and recording functions to be centralized yet accessible throughout a home. Shifting to a centralized system for content delivery is not yet entirely realized in most home media systems however. The Set Top Box is evolving while peripherals are increasing its capabilities, however the dominant standard remains as a relatively simple cable box, with DVR functionality becoming an increasing standard with 31%, and growing (Endeavor Partners, 2009) of US households having a DVR. 2.4.2. Audio Audio systems are often closely linked with TV and video systems to provide high quality audio for movies or TV programs, however they operate independently from video systems when providing solely audio content. Systems are usually comprised of a stereo or Audio and Video (AV) receiver and speakers, with a variety of integrated and distributed systems available. Input to the system, either integrated or distributed with the AV receiver, can include CD players, satellite radio receivers, terrestrial radio receivers, or input from digital music players or computers. Constraints on wiring and the inability to run multiple programs (ie play more than one input) means that audio systems are often constrained to a single room in a home. Other rooms often have small radios, iPod or portable device speaker docks for playing music, or separate full audio systems. These disparate audio systems create an inconsistent music experience and add complexity and complication for users due to nonstandard interfaces and the need to store music in multiple locations. Functionality such as hearing the same song throughout a house, or being able to access the same song, CD, or playlist from any point in a home, has traditionally required expensive wiring and high-end custom installations. Shifts in technology are changing the way these systems are implemented however, with the ability to synchronize music through programs like iTunes, integration with home networks, the ability to plug portable digital music players into receivers, and distributed audio solutions such as Sonos. The Sonos system uses WiFi and mesh technology instead of wiring to extend a single audio system throughout a home. 2.4.3. Set Top Boxes Set Top Boxes used to connect a television to a satellite or cable feed are pretty much the equivalent of a black box to most users. Wires go in, wires go out, but the control and interface is through a remote control and the user interface displayed on the television screen. The experience delivered to the user is determined by the user interface and the content delivered. Interfaces have traditionally offered very little in terms of differentiation, making content, price, availability, and bundling keys points for differentiation. Several shifts in the way content is delivered, viewed, and stored are enabling a variety of smarter uses and extended functionality in STBs as well as enabling addition peripheral products. Perhaps one of the most well known products creating a shift has been the Tivo box, which introduced programmable digital video recording (DVR) to mass-market consumers for satellite and cable television. Cable companies noticed the trend and adopted DVR functionality into their STBs. As of 2008, 31% (Endeavor Partnets, 2009) of US households had DVR functionality, up from 25% in 2007. The popularity of DVRs demonstrates that in the busy culture of the modern day American, having control over not only what you watch but when you watch it is important. High-end customers especially have busy schedules and are not willing to dedicate a permanent space in their schedules for a TV show when they can pay for a more flexible option. A more recent trend is to shift the place where television or a video can be watched. The SlingBox from Sling Media allows users to watch streaming or recorded programming from their STB on a variety of other platforms, including computers, smartphones, and other TVs. This allows a person to keep up with a favorite show while travelling, or pause a video and continue watching it in another room. In general, both time and place shifting are set to become essential technologies for the next generation home. Alternate STB and television offerings, such as Verizon's Internet Protocol TV (IPTV) over their fiber optic FiOS network, and STBs like AppleTV and Vudu, may offer some advantages in time and place shifting compared to traditional cable, in addition to other potential advantages in pricing, synchronization, networking, and device interoperability. 2.4.4. Video Players and Gaming Consoles In 2007, 77% of US households contained DVD players (Endeavor Partners, 2009). Although Blu-ray promises to be the next standard in video disks, overall penetration remains low at only 9% of US households (Interpret LLC, 2008). Other than shifting standards, there are no major shifts in the way DVD and Blu-ray players provide content to users. Perhaps a more relevant shift that has already begun is the increasing popularity of video delivery independent of disk players, such as video on demand (VOD), online purchase or rental from applications such as iTunes, and streaming alternatives such as those offered from Netflix. Some of the online and streaming alternatives are very closely linked with STBs, such as those offered by Apple (AppleTV) and Vudu, and also provide High Definition (HD) quality picture and sound, albeit in the 720p (iTunes) format as opposed to the 1080p maximum capable on many Blu-ray devices. Considering the low penetration of Blu-ray however, downloaded and even some streaming media can provide better or equivalent picture and sound quality than the current viewing experience of most households. In most cases though, an STB must be purchased in order to view online videos on TVs. Perhaps more interesting than stand-alone video players are video gaming consoles. Although not every household population has a 'gamer', still, approximately 42% of households in 2008 (Endeavor Partners, 2009) had gaming consoles. These consoles inherently have a relatively high level of complexity driven by detailed graphics and online gaming capabilities, however this complexity also enables the console to be a highly converged device. Sony's Playstation 3 is an excellent example. The Playstation 3 uses the Blu-ray format for games, and so also doubles as a Blu-ray video player. In 26 addition, the device can be hooked up to the internet via WiFi or ethernet, and can access TV and video content from the online Playstation store. Nintendo's Wii is also internet capable, with an Opera web browser and the ability to play videos from YouTube, although videos from newer sites with full TV episodes, like Hulu.com are not yet supported. The Xbox from Microsoft offers users access to streaming content from Netflix and also can be connected to a Windows XP Media Center to play stored content. Though gaming isn't as popular as simply watching videos, there still is a relatively high penetration in US households, and the capabilities of a game console can easily overlap with the functionality of some STBs and home media centers. In addition, there are many free applications and instructions available on the web that can be installed on these consoles to expand their functionality and networking capability, although many of these applications are unsupported by the original equipment manufacturers. 2.4.5. Personal Computing and Peripherals Personal computing is a category that is beginning to overlap with a few other categories, largely due to the need for intelligent processing in order to increase functionality for smartphones, video game consoles, and media players. What started out as a basic desktop computer for applications and data storage has evolved into its own portal for viewing multimedia content, evidenced by the popularity of sites like YouTube, and has seen significant merging with other home entertainment products. The challenge with PCs is that they are used for many purposes other than video, audio, and gaming applications. However, their inherent storage and processing capability makes them excellent platforms for developing multimedia applications. Another key issue is that desktop computers are rarely collocated with a TV and audio system in a home. Recently, 27 i:._~ ;;; however, standards have begun to emerge that link the PC with other home media products, and the ability to share multimedia over home networks is helping to overcome spatial issues. With the increasing trend of home networks, personal computing is moving from a small, wired, integrated system into a dispersed, wireless, distributed system. Content, documents, etc. can be stored on a network drive and accessed by desktop or laptop computers, or even a smartphone (such as the Pogoplug application for the iPhone). Media can be streamed from a media center hub to your TV, laptop, or any other compatible device. High definition content is still largely relegated to wired connections, however the increasing availability of products with the IEEE 802.1 In draft standard and Digital Living Network Alliance (DLNA) interoperability standard means bigger pictures and better product performance is moving towards the convergence standard of being accessible anytime, anywhere. Of course some computers are made with the explicit intent of delivering multimedia to a home entertainment (audio and video) system. Often referred to as media hubs or media centers, these range from storage focused devices to fully functional computer systems and can be used to store and display photos, play stored audio and video, store and play DVD or Blu-ray discs, download or stream online content, and more. Home media centers are far from becoming a standard in US homes however. Although not entirely integrated, the functionality provided through a media hub by and large can already be performed by existing pieces in a networked home, namely a PC, STB, or a gaming console. Other peripherals such as printers, scanners, fax machines, etc. are also part of the PC category but are not as integral to the home media system. The standards these peripherals employ are of interest however, since they may influence which standards succeed and the level of integrality media systems will employ as they become more converged. 2.4.6. Data Pipe and The Cloud The biggest driver of change in the home media system is the internet. Perhaps a better term to use instead of internet is the 'cloud' because it implies a wider range of uses and services than what people think of when they hear 'internet'. The term 'cloud' is something that gets used quite a bit although it has no single agreed upon definition, and can imply a variety of capabilities depending on the context of discussion. Here I use the term 'cloud' to imply not only internet content accessed through a browser, but content accessed and interacted with through software applications (ex: iTunes), services that operate over data connections (ex: VoIP), and a variety of other multimedia content and communication functionality that can be accessed through a data connection in a home, such as broadband, or anywhere else, such as a 3G cellular data. The term 'internet' often brings to mind an impression of web browsing, while the term 'cloud' implies much more. In the home, broadband is the major method for accessing the internet, with broadband penetration in the US reaching ~63% in 2008 (Endeavor Partners, 2009). Broadband can be delivered over DSL, cable, or more recently fiber optic cable, and is usually bundled with either voice or cable TV service. Many Cable TV and telephone companies have had well over a decade to build infrastructure for delivering only voice or TV service, however because of the large wired infrastructure that they already had in place, they've become the de facto service provider for internet and data access. Many of the services and content provide by telecom and cable providers can now be delivered through broadband, allowing other companies to compete directly with cable and telecom providers using their own infrastructure. Broadband delivery is essentially becoming a large 'dumb' pipe, through which services and content in the cloud can be delivered to the home, or any other fixed point for that matter. Although television and telephony are currently considered a "multi-play" offering, convergence is beginning to make tv and telecom providers compete head to head as a single merged market. Cable (the dominant delivery method for paid tv programming), DSL, and fiber optics are all established delivery methods for internet, but so far they've each been slow to poach the other's core business. This is partly due to infrastructure, as cable has traditionally been able to support much higher data rates than the majority of the telecom DSL infrastructure. As telecom companies are improving their infrastructure to support more bandwidth for data, they are finding that there are some high value services that they can capitalize on, namely paid television programming. Many cable services have already added VoIP offerings, so adding IPTV services to telecom offerings is a fairly natural progression. Unlike cable TV however, IPTV has no intrinsic monopoly or priority over the bandwidth it occupies, so fierce competition may ensue. Already, paid services like Vudu and AppleTV are gaining traction, while other free (advertising revenue only) services are popping up on TV network websites and sites like hulu.com. Cloud computing, as a concept, has been around for a while, but the hardware and software infrastructure necessary for the home network and entertainment systems to truly take advantage of these enabling technologies is just now starting to gain a foothold in the home of the US consumer. Products are rapidly emerging that converge a variety of home media, computing, and communications services. As access to broadband increases, so does access to a larger and wider variety of services at increasingly competitive costs. Telecom and cable companies won't be losing their business anytime too soon as they have an established presence in the consumer's home as well as a considerable business infrastructure to deliver premium content. They will, however, feel the pressure of competition. 2.4.7. Portable Electronics, Peripherals and Other There are a variety of other intelligent or not so intelligent consumer electronics and products within the home that may conceivably benefit from linking to the home media, network, or communication systems. Also, some devices that are relevant to these systems may fall equally into multiple categories or overlap with other devices and are better discussed here. Of the products that may benefit from linking to these systems, a small but high-end category is home automation and security systems. Adding a control application to a smartphone could allow a consumer to control a thermostat remotely, replace the garage door opener, or receive security alerts from the home security system. There could also be a benefit to linking a home security system with a home audio system, allowing owners or security personnel to speak directly with suspected intruders. More simplistic devices, such as a Roomba robotic vacuum, could benefit from having a WiFi and home network connection, allowing users to start and stop vacuuming in their 31 home while they are away at work through a smartphone application, web browser interface, or any other number of ways. There are many products that could benefit from a converged and interoperable home network, media, and communication system, however most of these products aren't driving convergence. A variety of products focused on portability are, in some cases, helping to drive convergence. Portable gaming devices, digital music players, netbooks, navigation systems, and more are all focused on a user's experience outside of the home, but are helping to shift interoperability within the home. Digital music players especially are driving a shift as, according to a 2009 survey by Piper Jaffray, 92% of teens own a digital media player. The popularity of these devices has driven music away from the CD format and into the purely digital format. A lot of these portable products are already converging with each other. Perhaps the best example of convergence is found in the iPhone 3G smartphone, which has a web browser (providing some of the functionality of a netbook), a digital music player (equivalent to an iPod), a GPS chip and Google Maps navigation application (your personal navigation device), and also allows you to add a wide variety of games and applications to your handset from their application store. Limitations on space and weight help drive convergence in portable products, but the home is much less constrained. Consumer behavior is shifting slightly towards cloud based services, but the major drivers for change and providing customer value have yet to be proven. One last set of services should certainly be mentioned, which are satellite tv and radio. Though not as popular as cable TV, satellite TV still holds significant market share, and companies like DirecTV have already begun to utilize the web for services such as their DVR Scheduler, which allows users to program their DVR remotely. Satellite radio has 32 also taken advantage of the ability to provide services via the web, and offers some of its broadcasting over the internet in addition to its satellite service. It will likely be unable to charge significantly for its online services though, as free services like Pandora and Last.fm have gained significant popularity. Although the hardware products for these services fit easily enough into the previous categories (namely the STB and audio systems) the method for delivery is unique and is not suited to converging services. High latency times, relative to broadband, mean that neither satellite TV nor satellite radio are good means for internet access or communication, and both technologies will likely remain point solutions. 3. Voice Convergence: Technology Overview 3.1. The Fixed Mobile Convergence Currently in the US, many people use their cell phone or smartphone in their home in addition to or instead of their landline. In fact, almost 25% of mobile users in the US do not have a land line, and that number is higher in other European countries (Endeavor Partners, 2009). Multiple reasons exist including a desire to maintain a single contact number regardless of location, as well as simple proliferation. For many age demographics smartphones are about constant and timely communication. This can be seen in the popularity of text messaging via SMS or the regular stream from sites like Twitter.com. Calling a landline to see if someone is there seems a circuitous way of communication if someone almost always has their mobile phone by their side. The way people use mobile phones is changing, and the cloud is brought closer to their daily lives via the shift in focus and customer value. The following technologies represent a shift towards fixed mobile convergence as the telecom and internet industries collide. As the focus of mobile phones shifts to "always connected" rather than a solely mobile connection, technologies such as VoIP, UMA dual mode handsets, and femtocells offer potentially more efficient ways for smartphones to connect and interact with the cloud, as well as the environment around us. 3.2. VolP Software Voice communication has traditionally been a circuit switched rather than a packet based (like the internet) technology, separating it from much of the internet communication advancements. Voice over Internet Protocol (VoIP) using packet based technology has been around for quite a while, but has enjoyed only limited success and has not taken any significant margin away from traditional phone networks, yet. VolP on traditional land lines has yet to show any significant value to the customer, either in terms of quality, functionality, or cost savings. However, the technology is improving, and its use in the high cost area of mobile communications is expanding. In its simplest form, VoIP is being implemented in services such as Skype and Fring, which allow a smartphone user (among others) to talk to other users who are also using the same online service. It is not a fully converged offering, as users cannot transfer between WiFi and cellular voice or data during a conversation. Also, a user must maintain a separate phone number for IP based communication if they want to be able to make calls to other mobile or landline numbers, and comparable fees apply. A successful future VoIP architecture based solely on software, without MNO participation, requires a very powerful network effect that has yet to occur. Customer needs require communication with individuals in a timely manner regardless of their connection to Skype or another similar service. Also, there is an often overlooked hardware component, such as a headset for a computer, required in order adequately conduct a VoIP call although VoIP on smartphones largely overcomes that requirement. 3.3. VolP Hardware and Software Combination In order to overcome many of the drawbacks of traditional VoIP on handsets, dual mode handsets were developed which utilize Unlicensed Mobile Access (UMA) technology. Similar to standard VoIP, a user can make calls over a WiFi connection rather than a cellular signal. Unlike standard VoIP however, the smartphone hardware is configured to be able to switch between the WiFi and a cellular source during a phone call, ensuring that a call won't be dropped due to a user's movement. Also, a user has a single phone number, regardless of whether they are utilizing a WiFi or cellular connection. Essentially, the WiFi signal is abstracted to appear just like any other cellular signal to the handset. 3.4. VolP Using 3G Similar to the way a UMA dual mode handset abstracts data to appear as cellular sources, there exists the option to utilize only cellular data (such as 3G) and WiFi as Internet portals for VoIP, thus routing all calls through an IP based network rather than a cellular network. ZerO 1 is a Mobile Network Virtual Operator (MVNO) in the US that will soon be offering a similar service, offering unlimited calls via VoIP over 3G service, though they will not be able to use WiFi or dual mode handset functionality. There is very little difference between this proposed service and those made available by Skype on mobile handsets, which will soon come standard on some Nokia handsets. The ZerO 1 package will not have any capabilities for voice other than VoIP however, whereas a Skype enabled handset still has a separate voice capability that is compatible with 2G and nondata cellular sources. 3.5. Femtocells Another rapidly developing technology for utilizing wired broadband in the home is through a femtocell. A femtocell, similar to a WiFi router, provides a wireless connection to the internet for a cell phone using a cellular frequency rather than open spectrum (although some in the future may use WiMax). Essentially, similar to UMA dual mode handsets with WiFi, a smartphone sees a femtocell as just another cellular source. Unlike a UMA dual mode phone however, there is no additional hardware or software changes required on the handset. 3.6. Application and Advantages in the Home Although not exhaustive, the list of Fixed Mobile Convergence technologies above encompasses a range of both technically feasible and market viable options for US consumers now and in the near future. Not all of the technologies discussed so far have added value besides a reduced cost for calls or data, and some may not even have that. Femtocells and UMA dual mode handsets offer the most seamless transition for a consumer. Each requires a specialized hardware purchase of a femtocell base station or a specialized handset, however no change in user behavior is required. Other key value propositions include improved signal indoors where cellular signal may be poor or nonexistent, as well as a potential connection to existing home networks. The VolP over 3G data option provides no significant added benefit to customers other than cost, and may potentially have problems with sparse 3G coverage in the United States. If it had capabilities similar to UMA dual mode handsets by having the ability to use WiFi, then its applicability in the home would be almost identical to that of current UMA dual mode handset technology. The only difference would be the carrier, as current UMA dual mode handsets are routed through an MNO's network, while VoIP would be routed through an independent vendor's network. Lastly, the stand alone VoIP option (Skype etc.) provides a very current capability with a high level of value within the product network and an ability to port a phone number easily among different device, however these capabilities are not currently considered major selling points for mobile phone service ("The comScore Wireless Report"), though partnerships with Nokia and applications on successful networking sites like Facebook may give Skype a boost. Unlike the other offerings, however, Skype is already an online platform, providing other internet capabilities in an integrated manner that other voice centric network operators do not. In general there are three wireless mechanisms for data transfer that are commonly found on smartphones: WiFi, cellular (2G & 3G) data, and Bluetooth. WiFi provides the most bandwidth for data transfer, is present on about 44% of smartphones (Ngo, 2009), and is common in most homes where one or more household members owns a laptop. Bluetooth provides a different functionality, and is used to pair to specific devices, like a computer or headset, but in it current form is too slow to be used for large amounts of data or for things like online video. For cellular data, there is no connection to the home unless a femtocell is being used. Here I'm choosing to abstract away the specific connection - - -------- method, frequency, or standard (ie GSM, CDMA, UMTS, CDMA-2000, etc.) assuming merely that 2G or 3G cellular data implies that the data connection is using licensed spectrum from a specific MNO. Each of the discussed convergence technologies has differing implications for wireless data to smartphones in the home. The femtocell allows for the simplest handset hardware for a connection to the home and wireless data, as WiFi isn't required, but consequently the data transfer rates between the phone and base station can be slightly slower. UMA dual mode handsets have WiFi built in, so data connections in the home are easily handled that way for wirelessly networked homes. VoIP software applications provide a greater economical advantage on WiFi enabled smartphones, however the software is independent of the type of wireless data connection. None of the technologies utilize Bluetooth on a handset, and independent of pricing, its not immediately obvious which of these methods, if any, provide additional value to the smartphone user at home. A deeper understanding is required of the home network as well as the products and services fixed mobile convergence can provide. 4. Putting It All Together 4.1. Overview All of the pieces fall into three general categories: entertainment, computing, and communication. There are different ways that each of these consumer needs can be implemented in the home. Many of the established solutions are point solutions, that is, they address only a single need. Convergence is being driven by the increasing need to have an intelligent processing capability on many consumer electronics and communication devices. Once this improvement starts, it opens the door for rapidly increasing functionality based on software rather than hardware devices. Before all that can happen however, products not only need to get smarter, they also have to be made more compatible in order to be able to network with other devices and computers. 4.2. Linking Computers and Consumer Electronics Unfortunately, even smart devices cannot always talk to one another, let alone single or limited function devices. If one has a Linux based machine, a Macintosh, and a Windows based machine all on one network its more than likely they will have to do a bit of tweaking and find a few different software package in order for them to be able to communicate. In the home network and entertainment system there are primarily two solutions. The first is to build a product network and architecture based on a single company or group of companies' proprietary software and networking protocols. The second is to build an ecosystem based on a well-recognized and accepted standard. Proprietary product architecture lacks the easy interoperability with a wider range of products that are available in standards based architecture. What it lacks in variety however, it can often make up for in integral functionality and seamless performance. Devices can easily recognize other products that are attached directly or to the same network, and each device can access all available resources. In the home network, the most recognized standard is from the Digital Living Network Alliance (DLNA). It's a standard that is supported by a wide range of computing and consumer electronics companies and is partially based on the Universal Plug and Play (UPnP) standard. DLNA can be found on a wide array of products, from televisions to mobile devices, computers, --;;--.i:;-w;:~~; -~-~i;^l- i;;-l ~i- ~~"i~~l---;~l-ii~;;;;;-il-;:- and more. This standard allows devices to interact and provide access to application and files on each device that has been certified. Devices that are not DLNA certified however may or may not be compatible or supported for interoperability, based on the manufacturer and software. A DLNA networked home environment allows users to have distributed content use and storage, yet allows a centralized method for accessing and sharing content. 4.3. Interfaces: Applications, Web Browser, File Browser In addition to devices interacting with other devices, there is a need for software and applications to talk with one another as well. When the same function becomes available on multiple devices, synchronization can become an issue. At the same time, when a person becomes familiar with an interface or service on one device they are likely to want a similar experience on another device. In the current converging environment, single point hardware solutions are beginning to phase out in favor of software functionality. In this transition, ownership of the software or the content provided by the software is becoming more valuable. When information needs to be shared between devices, whether via a direct wired or wireless connection or via a network connection, the available content needs to be viewed and selected. Computers usually do this with a file browser or finder. Sometimes devices require a specific software device driver or application to connect with a device, though this often means that the device is only able to connect to a computer and may not have the capability to interact with other products, like a TV screen for example. This is where standards like DLNA come into play by allowing interoperability with a wide range of products. Applications often have their own browsers in order to search specifically for compatible files, or to store a network location where content is often stored. For online content, a web browser is the main portal for user interaction. Similar to file browsing, some applications have their own ability to browse specific online content or sites, however the range of sites or content that is accessible through an application is often very small and specific. A web browser is often equipped with various plug-ins that allow multimedia content to be accessed within the browser. To a large extent, a web browser application determines the user's experience with the web, coupled with the quality of the sites accessed. Applications that access the web and local or networked files are able to better control the entire user experience of accessing and playing media content, while access through a web browser may be an inconsistent experience due to differences in browsers, or limited functionality. Apple's iTunes is a good example of a software application as a platform. The service can be used on Windows PCs, Macs, smartphones, an AppleTV set top box, and an iPod Touch digital media player. A good example of a multimedia content delivery service that is relatively independent of hardware or software is Amazon.com's TV and movie download service, which can be accessed through a web browser. One last example of a method for content delivery is Last.fm, which offers plug-ins to a web browser so that cloud based music can be streamed to a computer or other compatible device, thus eliminating the need to open a specific application or remain at a given webpage. These software pieces are essential to multimedia delivery in a converged home environment and should be taken into account as either potential partners or potential competition for other service or content delivery platforms. 4.4. Synchronizing: In the Cloud or Through a Device Synchronization is seen as a potentially high value service for the converged environment. Two good examples of synchronization solutions are the MobileMe service from Apple and Ovi.com from Nokia. They have made an architectural decision that instead of constantly synchronizing between multiple devices, it makes sense to keep all updated information in one place, the cloud. By maintaining information online, a user has a variety of methods for access without having to have any of the synchronized devices in the same place or physically connected. 4.5. A Distributed System Architecture Ironically enough, converging consumer electronics, computers, and communication devices allows for a more physically distributed system rather than a tightly integral one. A review of the interfaces used in these systems (see Appendix 6.1.5) reveals nothing unusual but does offer some insight. Users interact with applications and many products through sight, sound, and touch, or screens, speakers, and keyboards etc. Devices such as STBs, computer consoles, and WiFi routers do not contain their own interfaces but work through other devices. A quick review of some of the screens in the home brings up: smartphones, which have the advantage of providing the user 'always connected' functionality; computer monitors, which are fairly large and collocated with other computing assets; laptops, which provide an easy form factor and portability; and TV screens, which generally provide the best viewing experience. Of these, the desktop monitor seems to provide the most redundant functionality, as networked devices no longer require collocation, while the laptop and smartphone overlap in their ability to provide a portable user interface. The inference from this array of hardware and software interface architectures is that convergence is serving to remove redundancy in systems, and implement hardware solution in software on smart devices. Stationary systems are comprised of smart interface devices and black boxes (devices with no user interface), except for the case of the television screen, which is not a smart user interface but is built primarily for size and performance in image display. While the black boxes may continue to converge and functionality to increase through software, the user interfaces are likely to change less quickly, while still increasing the overall capabilities of the system through connections to the black boxes and cloud. The distributed home architecture has laptops, TV screens, and wireless keyboards with access to STBs, computer consoles, and hard drives all through one network. Within this distributed home architecture it is important for a new product or device to fully understand its path to the user, the network, other devices, and the cloud. 5. Applying The Ecosystem Information to Femtocells 5.1. Linking the Ecosystem: A Design Structure Matrix (DSM) In order to better analyze the femtocell's place in the home environment, I have chosen to map out the ecosystem as well as two specific cases (Appendix 6.1) that demonstrate current technology and ecosystems. A basic description and mapping of products provides an excellent overview of core functions within the home media system. There is a wide array of functionality, as well as potential function overlap between devices. To analyze this media ecosystem, a design structure matrix was chosen as a tool so that, when optimized, modular and integral parts of a system would be highlighted. The DSM also provides an excellent graphical description of the links between products. Smart devices within the ecosystem have the option of a wide range of functions, but most products only contain a subset of the range of possibilities. Therefore, two specific cases, i.e. the product architectures from two different companies, were used in the DSM analysis in order to provide a realistic snapshot of current systems. The first case is from Apple Incorporated, which is chosen due to their relatively closed and controlled architecture, in addition to their very successful smartphone and a highly successful application store. The second is Sony Corporation, which provides an excellent contrast due to their use of the DLNA standard as well as their leadership position with Bluray disc technology. The inputs to each matrix are specific products currently being sold by each respective company, with one product for each device in the media system list (Appendix 6.1.2, second column), when available. Initial comparison of the Apple and Sony input reveals two things. First, Sony has a much more diversified offering, with a much wider range of products. Secondly, while Sony has the upper hand in gaming and Bluray devices, Apple has a much stronger software offering. - - ------ ' -- I Apple Ecosystem DSM 11 2 2 3 4 Task Name SD Memory Card Earphones 30" LCD Flat Panel Display Apple TV DVD CD USB Thumb Drive User Cellular Voice Cable Data Wireless Keyboard "Mighty Mouse" wireless mouse Blutooth Cellular Data IPod Touch Mac OS X iPhone OS Safari 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16x 171 181 ITunes 19 IPhone 3G Wired 20 21 5 6 7 81 9110111121131415 |16|1718119120121 : x is X X 2 x X XX X X X x x x x x x x x x X X X x11 X X xx X % 314 XX X 5 13 14 X x x x x X X X x I--_ x IX X X xX Ix ix Ix I I Ix Ix x x x x 3 6 7 8 X 141X X X x X X x 16 x X 17 789 X 19 X xxxxx 21 91"0' "112113141"5 16 17 18 19 20 21 Figure 1. Excel manually partitioned DSM of Apple Incorporated ecosystem In the first DSM matrix for Apple Inc. the DSM@MIT (Cho, 2001) excel macro was initially used but the algorithm failed to significantly cluster the matrix. The program was then used to aid with manual partitioning of the DSM to achieve the matrix seen in Figure 1, with four items removed due to their immediately apparent bus like structure (i.e. they interfaced with a majority of the matrix). The four items are the MacBook Pro, Mac Mini, Time Capsule (wireless), and the Airport Extreme Base Station and would have been shown as part of the core system in the matrix above, as well as connecting to a majority of the other products. These items were included in the subsequent automated partitioning using a Matlab algorithm (Thebeau, 2001) and, although there are slight differences, the automated matrix is largely similar to the manually partitioned DSM (see Figure 2 and Figure 3). 2 6 7 8 9 NewDSM Matrix; 12-May-2009 18:16:34; Total Cost: 3412 Element 13 14 16 17 18 20 22 23 24 25 11 19 21 5 15 4 10 1 3 12 0 Figure 2. Matlab automated partition of DSM for Apple Inc. The takeaway from the two matrices (Figures 1, 2 and 3) is simply that Apple Incorporated has a very tightly integrated ecosystem. The tightly clumped system of core Apple products and software (see the solid line box in the lower right hand corner of Figure 1) has more of the nature of a bus than a tightly integrated system module. The areas surrounded by dashed lines illustrate the level of interaction these core system pieces have with other point solutions. There are very few products in the ecosystem that don't have the capability to interface with most other Apple products. When considering the matrix in context of the larger converged system there is a noticeable focus on computing and a much lesser focus on consumer electronics and traditional home Cluster Member List 12-A.y-20 8.18:16:34 Cluster #1 Cluster *3 MacBook Pro (2) DYD (6) 30" LCD Flat Panel Display (5) Apple TV (15) CD (7) USB Thumb Drive (8) Cellular Data (9) Mac OS X (13) iTunes (14) Safari (16) "Mighty Mouse" 'wireless mouse (17) Cable Data (18) iPhone OS (20) Blutooth (22) Wireless Keyboard (23) Airport Extreme Base Station (24) Time Capsule ('wireless) (25) Cluster #4 Cellular Yoice (4) iPhone 3G (10) Cluster #5 Mac Mini (1) SD Memory Card (3) Cluster #6 Wired (12) Cluster #2 Earphones (11) iPod Touch (19) User (21) Figure 3. List of products in Figure 2 clusters, starting from left to right entertainment products such as TV screens. That means in order for Apple to fully converge, it will likely need to incorporate parts of standards like DLNA in some of their products in order to interface with products from other vendors. Apple's complete dominance in the digital music player, evidenced by a survey showing -100% of teens wanting to buy an iPod as opposed to any other device (Jaffray, 2009), has made the iPod into a standard, so visual multimedia more than audio should be the key focus area for integrating Apple products with devices from other manufacturers. I a -- -- -- - ~ I --u Sony Ecosystem DSM T ak N Ime a& Name /ideoGname Disk iu-ray Disc Player HomeTheater A/V Receiver (7.1-channel) I'- II 4 5 6 7 8 9 10 Playstatlon*Store 171 Bluray CD 22 Bluetooth Mouse VAIO Wireless Keyboard Blutooth 23 24 25 USB Memory Stick 26 High Definition HandycamO Camcorder Walkman W Series MP3 player headsets SD Memory Card 27 28 29 WIFI 30 PlayStation Portable (PSP) WalkmanS Video MP3 Player D tal Camera Cber-shot User eReader 31 32 Xperla 36 Sony Valo P serles 37 VAIOFWSeries Laptop 38 RT Series AI-In-One PC x x x x x x _u x X xx x x x X x XC11 xY2 x1 x xI14 x ix x xl x x x x xxI xx xxx xxxx x xx X K xxx X xxxx xxxx x x x x xxx x x 40 XXX 41 42 x x x x xxx xxx 39 Home Entertainment Server (HES) X x x x x x xx 2 xxxx xxxxx x x S x x X X xxx x x mxxxxx x X xx xxx x 34 35 4 II X x x xx I Mx HS1 Home Server VAIO Cable Data Wlrdu V I ..... x I TO 1l8x 19 VAIQ x 12 13 14 15 161 Platrt-nn3 yla lon319' xx 3 )VD/SACD/CD 400 Disc Changer Jnlversal Remote 3RAV1A@ Internet Video Unk Module 52" BRAVIAS S Series LCD HDTV ellular Voice ellular Data Stereo Bluetooth@ Headset 5-AIR Speaker System1 Noise Canceling Earbuds Home Theater Completer Speaker Package Nav-u Sony Portable DVD Player Dualshock3 Wireless Controller Playstaton3 Web Browser L ~~~~~dz~~~d~~~dddda~ddddddd~~dddddad~~~~ ---- - 1 2 x xx xxxxxxx x xxxx x xxxxx x xxxxx xxx xxxxx xx x x xx xxx xxxxx X X X X XX x xxx x x xxx XXX x X XX xxxxx XXXX x XXX X XX XXXXX/XXX x xx x xxx .4, j 14. IJ JA:Id -dd d dd:1d d A$ 1W d9 1d4 t A 1td&I N !"-I xxx x ...... l J Figure 4. Excel manually partitioned DSM of Sony Corp. ecosystem The resulting Design Structure Matrix for Sony's ecosystem shows a considerably different picture from that of Apple (see Appendix 6.2.3 for a larger view). Matlab automated clustering was applied to the matrix (see Appendix 6.2.1 and 6.2.2) however the results were similar but less informative than the matrix shown above. The core products represented in the lower right hand corner of Figure 4 do not include software but instead include a wide range of multimedia devices. Similar to the Apple Inc. DSM, the core products show more of a networking bus type architecture rather than true modularity, which means the ecosystem is fairly integrated, though not quite as much as Apple's ecosystem. The other solid boxes represent other more modular systems, though 48 as can be seen in the enclosed dashed boxes, even these systems have bus-like elements to them. The top left corner box represents the standard entertainment system including the flat panel display and AV receiver. The middle box roughly encompasses the Playstation3 gaming system. 5.2. The Femtocell in the DSM Within the DSM matrices, a femtocell would connect Cellular Voice and Cellular Data with Cable Data (or any other DSL source in a home). In both matrices, these are regarded as generic inputs with neither Apple nor Sony branding, and in both resulting DSM matrices (Figures 1 and 4) these inputs are not part of the core products making up the heart of the system. A femtocell by itself is a point solution. It does not have to be a point solution however. By converging femtocells with WiFi and wireless routers, as Ubiquisys is already experimenting with (NETGEAR to Demonstrate Live 3G Femtocell, 2009), the femtocell is then able to access the core network to provide additional value. It should be noted, however, that the connection to the network is redundant for WiFi enabled mobile phones. 5.3. Overview Ubiquitous availability of femtocells allows an imaginative person to come up with many potentially unique add-on applications. Unfortunately, the core customer value proposition for these devices does not yet support widespread adoption beyond the home or business. The larger market is thought to be the home, and one of the anticipated technology pushes for value delivery is delivering services. In this case, services can mean everything from personalization to synchronization and system integration. When i ~"l'r- -~;--------;;r--;.r. . . --- li;ii_;;- --;:-----------~l--il'-'-i~'~-li?"-- ^-;;~-F--r-ril;;-- r-^------- looking at the ecosystem and where the femtocell lies in the home network and entertainment systems, its fairly clear that the femtocell provides connectivity and functionality similar to a WiFi router, although it connects wirelessly with considerably fewer devices. It connects a cellular device or mobile broadband modem to a wired broadband connection, and potentially a home network. Except for setup or troubleshooting, the device works transparently and thus has no inherent interface to the user. Also, its unique value is in automation of services due to presence information, but not necessarily in the service delivery itself. Thus it becomes apparent that any connecting smartphone will be the primary interface, and thus an application, application plug-in, or website is required in order to effectively utilize functions. While not necessarily a huge technical hurdle, it brings up immediate concerns about the ability to gain revenue on a product developed for a separate platform. 5.4. Core Ecosystem Pieces In terms of service and content delivery in the home, there is the ability to design for many different point solutions. However there are core products in each of the systems analyzed, and likely to be similar ecosystems for other companies and mixed ecosystems. A challenging question is whether to focus on an ecosystem like Apple's, which is relatively closed but rich with software application developers, or target systems like Sony's using DLNA standards and opening up possibilities to a much wider variety of products and companies. DLNA devices provide more market share but may still pose difficulties with varying software platforms for devices. The answer lies more in a companies' internal expertise and external business, as either option helps to expand the customer value of femtocells but may require significantly different competencies. -- lr 5.5. The Femtocell Market The question of whether or not femtocell based applications can generate significant revenue has yet to be answered. Market need is a vital component of a successful product, and is crucial information to know before allocating resources to building software. In order to create some rough estimates of the future market, it is important to know some basic information about the femtocell market. As it is an emerging and barely established market, there is very little historical data to be used so market predictions, though notoriously inaccurate, are probably the best source available for analyzing the future markets for femtocell application services. According to a 2008 report by IDC, femtocells will have almost 6 million users in Western Europe by 2012. A separate report by Gartner lists 15 million users worldwide by 2012, but only 2.5 million femtocells in residences. The Gartner report roughly assumes 6 users per femtocell even though the average number of residents per household is only 2.6 in Europe and peaks at 4.7 in Africa and the Middle East, which are unlikely markets for femtocells (Baumann, 2007). It is likely that Gartner is assuming many of these femtocells will be in small businesses or large enterprises. The IDC numbers seem slightly more conservative and are specific to Europe, where Ubiquisys is located, so further estimations will be based on their calculations. Since there are so many unknowns for the future of the femtocell market, it makes sense to create some assumptions and use some numbers from current products to make some market estimates. The most successful example is the iPhone application store, for which there is a wealth of current data available. * Assumption #1: The average iPhone owner will download approximately 34.5 applications in a year. This is calculated from the April 2009 estimate of one billion applications downloaded with an installed base of 37 million iPhone and iPod touch devices, which averages to 27 applications per user from the iPhone store in 9 months and 12 days. (Elmer-DeWitt, 2009) * Assumption #2: No more than 11% of applications downloaded by an iPhone user would be femtocell applications. This is a very rough assumption based on two sets of information. First, users are nine times more likely to download a game than any other iPhone application (Ziberg, 2009), and second, gaming is not a category identified as a significant need for femtocell applications (Kemppainnen et al, 2008). * Assumption #3: Femtocell applications will be primarily paid applications with average revenue of $1.95 for the application developing company. The average price of an app is currently $2.78 with Apple charging application developers 30% of the posted price. (Zibreg, 2009) These assumptions, along with information on the femtocell and smartphone markets, allow for a realistic scenario to be built of the future market size in Western Europe for femtocell applications. To the best of my ability I have explained all assumptions made so that the calculation can be modified in the future as information becomes available. Figure 5 illustrates the market size for potential applications in terms of total numbers of users. Number of Available Platforms Year Number of Users in Western Europe Scalar for Smartphones Percentage Smarphones Number of Available Users 2008 10,000 1.5 33 4,950 2009 2010 2011 2012 90,000 650,000 2,000,000 6,000,000 1.4 1.3 1.1 1.0 46 54 64 76 56,925 438,750 1,440,000 4,560,000 Number of Available Users by Software Platform Research In Microsoft Windows Mobile Linux Motion Symbian Year 2008 % Market Share 57.1 17.4 12 2008 2,826 861 594 2009 32,504 9,905 6,831 Palm OS Mac OS X 7.3 361 4,156 2.8 139 1,594 2.3 114 1,309 2010 250,526 76,343 52,650 32,029 12 285 10 091 2011 2012 822,240 250,560 172,800 105,120 40,320 33 120 2,603,760 793,440 547,200 332,880 127,680 104,880iI Notes: Number of Available Users The number of users who have both a femtocell and a smartphone on which to place applications Number of Users in Wester Europe Forecast of the number of femtocell users until 2012, based on numbers from IDC, 2008 Scalar for Smarthphones Assume that femtocell owners are one and a half times as likely to own smartphones initially (lead users). This figure is uncertain and could be improved once data is obtained from first year femtocell sales information. Percentage Smartphones Estimate and forcast of the percentage of all cell phones worldwide that are smartphones based on information from Endeavor Partners, 2009. 2008 % Market Share Gartner report on the worldwide market share of smartphone OSs Improvement Possibility Adding estimates in the change in market share for each OS over time would improve the accuracy of the market size Figure 5. Calculation of total number of available customers This relatively optimistic scenario for the maximum possible market size shows that fewer than 1 million customers will even be available before the year 2011. In 2011 and 2012 the rate of adoption for femtocells appears to speed up, thus enabling a larger customer base, however the market share for a single company may drive a much lower percentage of the total customer base. Another point to consider is that the installed base for any one application on any platform will be one to three orders of magnitude less than the installed base for a non-femtocell applications, thus visibility within an application store could be more of a challenge. Market Size for Femtocell Applications on Apple Handsets 2008 2009 2010 2011 2012 Revenue per App w/ Femtocell Apps Inflation Applications per device Mac OS X 139 1,594 12,285 40,320 127,680 Revenue - 34.5 34.5 34.5 34.5 11% 11% 11% 11% $1.9! $1.9! $11,771.06 $1.9! $297,766.02 $942,925.74 $1.9! $90,725.58 Total Market Size for Femtocell Applications on Handsets All Sma irtphones Applications per device Femtocell Apps 2008 2009 2010 564,925 2 56.925 438,750 2 2011 1,440,000 2012 4,560,000 11 22 34.5 Revenue per App w/o Revenue Inflation 11% 11% 11% 11% 11% 1.95 $1.95 $1.95 $1.95 $1.95 $24.370 $24,370.73 $1,033,107.08 $6,781,420.80 $33,675,919.20 Notes: Applications per device Improvement Possibility The average number of applications for all smartphones is unknown but estimated to be very low. The assumption made here is that all smartphones will reach the current rate of app sales for Apple by 2012. The estimated increase is linear. A forecast for rate of purchasing Apple apps until 2012 could improve the accuracy of the estimate Improvement Possibility Improvement Possibility The average number of applications per device for all smartphones is unknown, but a web search provides various estimates in the low single digits. The estimate here is 2, but this could be improved by a better market prediction. The above calculation could be improved by adding inflation information to the revenue per app numbers. Figure 6. Calculation of femtocell application market size In Figure 6, the market for femtocell enabled applications for iPhones is estimated using current metrics from the iTunes application store. As the number of downloaded applications per user for the iPhone has been touted as an unprecedented success, an assumption for the larger market is made that all smartphones will be able to achieve this same rate of success by 2012. In this scenario, the total size of the femtocell application market for Western Europe in 2012 would be $33.7 million. Even for a small company of between 50 and 200 employees like Ubiquisys (Linkedln.com, 2009), a percentage of the total market share is not likely to bring in significant revenue before 2012. The primary driver in the market for femtocell applications is the sale of femtocells themselves. With only a very small installed base, there are very few available users and a variety of smartphone platforms being used. Although the application store for Apple Inc. has gained rapid success, the installed base is still relatively low compared to Symbian based phones, which are mostly found on Nokia handsets. The upcoming opening of Nokia's Ovi.com application store will likely improve the ability to get applications to Symbian smartphone users. For 2009 and 2010 especially, developing applications for Symbian based smartphones makes the most sense, as it will provide the highest number of available customers per application in a very small market. Initial penetration is so low that, in order to drive adoption of basic femtocell services, it may prove more fruitful to provide free applications bundled with mobile advertising rather than paid applications. A 2009 report from AdWhirl (Kincaid, 2009) suggests that free applications can make significant money, with the 100 top selling free iPhone applications earning from $400 to $5,000 per day. While getting to the top 100 is an unlikely feat for initial femtocell based applications, the opportunity exists to earn revenue to offset costs of application development. 5.6. Recommendations and Conclusion As devices grow smarter, many functions that used to be provided by single hardware devices are being integrated into multi-function devices. The smartphone is perhaps the best example of this. It is a personalcommunication device, as opposed to a landline phone that often serves multiple users. Portability is a key concern for mobile phones, and as such the functions of many other portable devices have been integrated into the smartphone. Within the home, the personalization offered by the array of applications on 55 I C~ ____(II~_I_ _~~_1 the smartphone serves to benefit the heavily networked home computing and consumer electronics environment. For multimedia delivery and online services, the ecosystems analyzed in Figure 1 and Figure 4 showed clearly that while some devices provide access to a very confined and limited number of products, other devices provide the ability to link with and access a range of products. As the need for presence based services is untested and can likely face competition from more established location based services, it is still unclear whether there is a clear user need for these services, or whether a critical mass can be gained to drive application development for a diverse array of home entertainment and networking products. Considering the assumption that Ubiquisys Ltd wants to truly create a Fixed Mobile Convergence environment through femtocells, they need to focus on a few things in both their application architecture as well as their long-term strategy. First, applications need to be able to interact with the bus-like core elements in the Design Structure Matrices. Essentially, the femtocell needs to allow communication between the smartphone, the home network, and other smart devices. The products highlighted in the two cases presented provide insight into what are likely to be the key pieces from other companies as well. Secondly, the femtocell has no self-contained interface to the user, and thus will require platform specific applications sold through the smartphone OS or handset vendor. The success of iPhone applications through a single portal, iTunes, demonstrates the importance of a closely integrated and well-designed user interface. Lastly, Ubiquisys needs to decide on a strategy, including both place and timing, for rolling out services. The ability to demonstrate services may provide additional value to users and thus provide a competitive advantage for Ubiquisys branded femtocells. An 56 application market, though, is not nearly the size of the hardware market it is based on. Femtocell applications require femtocells, which in the next few years will only reach an installed base a couple orders of magnitude smaller than the smartphone. Since applications are likely to remain a small source of revenue Ubiquisys should try to determine, by polling their installed base, whether or not applications do actually provide competitive advantage. If there appears to be no competitive advantage, then delaying development of services until 2012, or when the installed base increases significantly, will allow Ubiquisys to conserve resources. On the other hand, if applications can provide immediate advantage to Ubiquisys, then mobile advertising based free applications should be provided initially while slowly phasing in paid applications in 2011 and 2012. Femtocell based smartphone applications can be successful, however the market will continue to be limited by the size of the installed femtocell base. L~ ~ lii;:iiiiili_~~ . i.i-i.-~.~-.. -.-~-.. 6. Appendices 6.1. Ecosystem Matrices 6.1.1 Home Data Sources Standard Inputs TV Broadcast Satellite Cable Radio Broadcast Satellite Voice Landline Cellular Data (Cloud) Dial up DSL Cable Fiber Optic Cellular Data Hardware CD DVD Bluray Video Game Disk USB Thumb Drive Digital Media Player SD Memory Card Network Wired WiFi Blutooth Alternatives WiFi(mesh) WiMax Data over Power Line 6.1.2 Home Consumer Electronics and Computing Devices Standard NonStandard/Alternatives Home Entertainment System Video System Standard Screen (4:3) HD Screen (16:9) DVD Player Bluray Player Projector Receiver Speakers CD Player Wireless Speakers (Sonos) Set Top Box DVR Media Streamer Place Shifter (Slingbox) VHS Player Audio System Set Top Box Gaming Gaming Console Controllers Remote Control Universal Remote Game Specific Controllers Device Specific Remote Phone Landline Cordless Phone Mobile Phone Cell Phone Smartphone Accessories Headset Headphones Phone (w/ cord) _i ~~____.14____1__ ____Ill__l II____F ^i-Ti-?~lj_^__l(~--l-li-~-~ ----- i---l__~______^)^_l.i__i~_i__i-i_- i~;i~ ----i-eii-ill__ilI-llii-i-li_~/_~i-:-ii^CI--^---Y_1_-~---~-^--C-lnli--( L~~ Home Consumer Electronics and Computing Devices Continued Personal Computing Desktop Monitor Console Keyboard Mouse Speakers Webcam Laptop Laptop Storage Hard Drive Server Media Center Media Center Console Wireless Keyboard Networking Modem Router WiFi Printer and/or copier Fax and/or Scanner Peripherals Portable Electronics Digital Media Player Portable Gaming Device Netbook Personal Navigation Device Camera Video Camera Other Thermostat Robotic Vacuum Home Security System Garage Door Opener Washer Dryer Refrigerator Oven Microwave Universal Power Supply Ultra-Mobile PC (UMPC) eReader 6.1.3 Home Devices Functional Description Categories Device Main Function Alternate Functions Converging Functions Home Entertainment System Video System Video Input Video Input A/V Input A/V Input Play Audio Input Play Audio Input Standard Screen (4:3) HD Screen (16:9) DVD Player Bluray Player Display Display Stream Stream Receiver Speakers CD Player Stream Audio Input Play Audio Input Stream Audio Input Set Top Box Stream A/V Input View A/V Input Channels Select A/V Input Channels Stream Stored A/V File (Video On Demand) Record A/V Input to File Gaming Console Play Video Game Online Users Play A/V Input Audio System Set Top Box Transfer A/V Streaming Location Transfer A/V File Location Access Cloud Purchase and/or Download Content Stream Media from Cloud Stream Media from Network Gaming Play Video Game with Stream Media from File Stream Media from Network Access Cloud Browse Internet Purchase and/or Download Stream Media from Cloud Provide User Input to Controllers Remote Control Console Provide User Input Multiple Universal Remote Devices Mobile Phone Landline Wireless Voice Cordless Phone Communication Cell Phone (Basic) Mobile Voice Communication Communication Take Pictures Mobile Phone Text Message Smartphone Text Message Mobile Voice Communication Communication Take Pictures Email Access Cloud Browse Internet Store A/V Files Play A/V Files Chat Video Chat Video Calling Purchase and/or Download Run Applications A/V Files Purchase and/or Download Stream Media from Cloud Accessories Change Audio Input/Output Headset Headphones Location Single User Audio Listening i Home Devices Functional Description Continued Personal Computing Desktop Monitor Keyboard Mouse Speakers Console Display Visual Input Provide User Input to Provide User Input to Console Play Audio Input Process Data Create Data Files Store Data Files Create Applications Store Applications Run Applications Write Data to External Storage Laptop Mobile Computing Hard Drive (Includes all functions from Monitor, Keyboard, Mouse, Speakers, and Console) Store Data Files Storage Email Access Cloud Browse Internet Chat Store A/V Files Play A/V Files Video Calling Purchase and/or Download A/V Files Voice Over Internet Protocol (VOIP) Video Chat Stream Media from Cloud Stream Media from File Stream Media from Network Play Video Game Play Video Game with Online Users Media Center Media Center Console Wireless Keyboard (Same as console with reduced ability to create data files or applications, and write to external storage) Wirelessly Provide User Input to Console Networking Modem Router WIFI Translates Data Input Signal (Analog to Digital and Digital to Analog) Connect Devices with Network and Cloud Wirelessly Connect Devices with Network and Cloud Portable Electronics Digital Media Player Portable Gaming Device Store Audio Files Play Audio Files Play Games Personal Navigation Device Camera Video Camera Real Time Navigation Take Pictures Record Video Store Video Files Stream Video Files Play Video Play Audio View Maps Access Cloud Search Businesses Notes A/V = Audio and Video Applications here refers to applications that are able to be added to the system (as opposed to integral to it) Example: Microsoft Word can be downloaded and run but applications to run a game on a PS3 are integral I I I 6.1.4 Home Devices Applications Standard Basic Visual Software Cloud Control Stand Alone Connected Web Interface Applications Applications Browser Home Entertainment System Video System Standard Screen (4:3) HD Screen (16:9) DVD Player Bluray Player x x x x Receiver Speakers CD Player x Set Top Box x x (limited) x (limited) x x x (limited) x (limited) x x x x (limited) x x (limited) x x Audio System x Set Top Box Gaming Gaming Console Controllers Remote Control Universal Remote Phone Landline Cordless Phone Mobile Phone Cell Phone Smartphone Accessories Headset Headphones I _ In__i___~l____l__i____llj~i~_l _li Home Devices Applications Continued Personal Co puting (PCs) Desktop Monitor Console Keyboard Mouse Speakers x x x x x Laptop x x x x Hard Drive x Media Center Console Wireless Keyboard x x x x Modem Router WiFi x x x x x (limited) x x (limited) x x x Laptop Storage Media Center Networking Portable Electronics Digital Media Player Portable Gaming Device Netbook Personal Navigation Device Camera Video Camera Other Thermostat Robotic Vacuum Home Security System Garage Door Opener Washer Dryer Refrigerator Oven Microwave Universal Power Supply x x x x x x x x x x x x (limited) (limited) (limited) (limited) (limited) Home Entertainment System Interface Type: Interface Connections: Video System Standard Screen (4:3) HD Screen (16:9) Visual interface to user Visual interface to user DVD Player Interface with user through: Screen Remote Bluray Player Interface with user through: Screen Remote Device Control Panel Device Control Panel Receiver Speakers Interface with user through: Audio interface to user Speakers Remote Device Control Panel CD Player Interface with user through: Receiver Speakers Remote Device Control Panel Set Top Box (STB) Interface with user through: Screen Remote Device Control Web Browser Panel Controller Online Device Control Connection (Cloud) Panel Audio System Set Top Box Gaming Gaming Console Controllers Remote Control Interface with user through: User Interface to console Screen Universal Remote User interface to AV and STB Systems Cordless Phone Interface with user through: Device Speakers Device Keypad Cell Phone Interface with user through: Device Screen Device Speakers Smartphone Interface with user through: Device Screen Device Speakers Headset Headphones Audio interface to and from user Audio Interface to user Phone Landline Mobile Phone Accessories Device Keypad Device QWERTY Keypad Touchscreen Smartphone Application Personal Computing Desktop Monitor Console Keyboard Mouse Speakers Visual interface to user Interface with user through: _User interface to console User Interface to console Audio interface to user Monitor Speakers Keyboard Mouse Network Connection Online Connection (Cloud) Device Monitor Device Speakers Device Keyboard Touchpad Network Connection Online Connection (Cloud) Router Computer Peripherals WiFi Router Laptop WIFI Router Any Media Streamer (STB, Gaming Console, etc.) Router Online Connection (Cloud) Remote Device Screen Receiver Speakers Wireless Keyboard Wireless Remote Control Device Mouse Laptop Laptop Interface with user through: Storage Hard Drive Interface with user through: Media Center Console Wireless Keyboard Wireless Mouse Interface with user through: User interface to console User interface to console Media Center Networking Modem Router WiFi No user interface (except for setup) No user interface (except for setup) No user interface (except for setup) Portable Electronics Digital Media Player Interface with user through: Device Screen Headphones Speakers Portable Gaming Device Interface with user through: Device Screen Netbook Interface with user through: Device Monitor Headphones Device Speakers Speakers Device Keyboard Personal Navigation Device Interface with user through: Device Screen Camera Interface with user through: Device Screen Video Camera Interface with user through: Device Screen Thermostat Interface with user through: Robotic Vacuum Interface with user through: Home Security System Interface with user through: Garage Door Opener Interface with user through: Washer Interface with user through: Dryer Interface with user through: Refrigerator Interface with user through: Oven Interface with user through: Microwave Interface with user through: Universal Power Supply No interface/smart functions Other Device Control Panel Device Control Panel Device Control Panel Remote Control Device Device Control Panel Device Control Panel Device Control Panel Device Control Panel Device Control Panel Notes: a "-" can be replaced by the words "then" to denote the path to a user Speakers Touchscreen Device Control Panel Device Control Panel Device Control Panel Device Control Panel Network Connection Computer Device Control (Setup and Panel update only) Touchpad Online Connection (Cloud) ;';:'-------------1--~-l ll'---X11~-r^r- ^I--X-;_~__~l---~i~iiL~-lli:iiiLi~-iii r:l;~--- i----i--l^--^l--l~l'lil~-X~'~~" 6.1.6 Home Devices Platforms and Software Category Current "Smart" Products Stand Alone and Cloud Connected Applications, and a Smartphone Phones Personal Computers (PCQDesktop Computer Portable Electronics Digital Media Player Media Center Netbook Laptop Current "Semi-Smart" Products Limited Stand Alone and Cloud Connected Applications, maybe has a Web Browser Home Entertainment Phones Portable Electronics Gaming Console Set Top Box Cell Phone Portable Gaming Devic Personal Navigation Device Important Convergence Functions Purchase and/or Download Content Stream Network Audio or Video Input Stream Cloud Audio or Video Input Record A/V Input to File Transfer A/V File Location Transfer A/V Streaming Location Browse Internet View Streaming Files in Web Browser Listen to Streaming Files In Web Browser Portably Store A/V Files Run applications with cloud access Add applications Communicate with Voice, Video, and/or Text Home Devices Platforms and Software Continued Company Hardware Windows Mac OS X Linux Microsoft Apple (Various) PCs PCs (Apple) PCs Symbian Nokia RIM OS Windows Mobile Research In Motion Microsoft IPhone OS Linux Apple (Various) Smartphones Smartphones (RIM) Smartphones Smartphones (Apple) Smartphones SSoftware Operating Systems Platforms Applications Purchase and/or Download Content ITunes Apple PCs SPlayStation@Store Sony Xbox Marketplace Microsoft Devices Windows Media Player Microsoft PCs Quicktime Apple PCs (Apple) Real Player RealNetworks PCs Adobe Flash Player Adobe PCs Internet Explorer Microsoft PCs Safari Firefox Apple Mozilla PCs (Apple) PCs Amazon SonicSolutions Blockbuster PCs PCs PCs Starzplay ovi.com Starz Nokia PCs PCs Rhapsody.com RealNetworks PCs Digital Music Smartphones Players (Apple) (Apple) STB (Apple) Hardware Specific Gaming Devices Gaming Applications Stream Cloud Audio or Video Input Smartphones (Microsoft) Smartphones (Nokia) Web Browsers Smartphones (Apple) Websites Purchase and/or Download Content Amazon.com CinemaNow.com MovieLink.com mp3.walmart.com Smartphones Walmart PCs Digital Media Players (Limited STBs Websltes Stream Cloud Audio or Video Input Netflix.com Netflix PCs Vudu.com Vudu Inc. STB (Vudu) Joost.com hulu.com Joost Hulu LLC PCs PCs Last.fm Last.fm PCs Smartphones Pandora.com Pandora Media PCs Smartphones Gaming Notes: This is a list of common products, not an exhaustive list. These are all supported applications. Software hacks are not Included. 6.1.7 Case One: Apple Incorporated Current Apple.com Home Entertainment System Apple Product Notes Video System Computer 24" Flat Panel Display, DVI input only (no HDMI) Computer 30" HD Flat Panel Display, DVI input only (no HDMI) Standard Screen (4:3) HD Screen (16:9) DVD Player Bluray Player Mac laptops and desktop computers No standalone product None Audio System Receiver None Speakers None - Compatible speakers sold in Apple Store CD Player Mac laptops and desktop computers Set Top Box Apple TV No standalone product Set Top Box Gaming Computer based games only Gaming Console Controllers Remote Control Universal Remote Apple Remote and Remote App for iPhone and iTouch Phone Landline None Cordless Phone Mobile Phone Cell Phone Smartphone None iPhone and iPhone 3G Accessories Headset Headphones White in-ear headphones (iPhone Bluetooth headset discontinued) Provided with iPhone and iPod Case One: Apple Incorporated Continued Personal Computing Desktop Monitor Console Keyboard LCD Flat Panel Displays Mac Mini or Mac Pro Wired or Wireless Mouse Mighty Mouse wireless mouse None - Compatible speakers sold in Apple Store Speakers iMac Integrates the Monitor, Console, and Speakers into one flat panel device *** Laptop MacBook, MacBook Pro, MacBook Air Laptop Storage Time Capsule wireless hard Hard Drive (Servers excluded) drive Media Center Console - Wireless Keyboard Wireless Keyboard available Modem Modem usually provided by Apple USB Modem for dial-up broadband provider Airport Extreme Base Station Router (includes WIFI) Media Center No media specific computers Networking Airport Express Base Station (no wired router support) WIFi Portable Electronics Digital Media Player iPod (Shuffle, Nano, Classic Touch) and IPhone Portable Gaming Device - Software games provided for Pod Touch and IPhone Netbook Software navigation provided for iPod Touch and iPhone Personal Navigation Device Camera Video Camera Other A variety of non-Apple branded products and accessories are available. Software and Cloud Platforms Operating Systems Mac OS X, iPhone OS Content Applications iTunes Stream Cloud Audio or Video Input Applications - Enables Cloud Access Web Browsers Safari, Safari for iPhone Purchase and/or Download Content Websites Purchase and/or Download No sites are owned, but sites are accessible Stream Cloud Audio or Video Input None (online access through Tunes) No sites are owned, but sites Websites I are accessible i ____ ..._il-lii.i 6.1.8 Case Two: Sony Corporation of America Current Sonystyle.com products Home Entertainment System Sony Product Notes Video System Standard Screen (4:3) HD Screen (16:9) (Sony projectors omitted) DVD Player (VHS player ommitted) Bluray Player None BRAVIA and OLED TVs A variety of DVD players and portable DVD players (notebook style) A variety of Bluray players Audio System Receiver Speakers CD Player *** *** (Casette and tumtables ommitted) Limited stereo receiver options Wired and wireless speaker systems available A variety of CD players and with multi disk changing A/V disk changers with both CD and DVD storage and play A/V Receivers Set Top Box Set Top Box Bravia Link and Internet Link Modules Gaming Console Controllers Playstation3 Dualshock3 Wireless Controller Universal Remote A variety of universal remotes are available Gaming Remote Control Phone Landline Cordless Phone Mobile Phone Cell Phone Smartphone A wide variety of semi-smart Sony Ericsson mobile phones Limited Selection Windows Mobile OS (Xperia, P9901, few others) Accessories Headset Headphones Limited bluetooth headsets available (audio input and output) A wide variety of headsets including wireless and noise cancelling techology Personal Comp ting Desktop Monitor Console Speakers All VAIO desktops are all-in-one flat ***panel displays Keyboard Mouse Included with VAIO desktop, also available separately Wired and wireless mice available Laptop Eight different VAIO notebook series Hard Drive Limited hard drive options Laptop Storage (Servers excluded) Media Center Media Center Console Wireless Keyboard Sony Home Entertainment Server (HES), Home Media Servers VAIO wireless keyboard Networking Modem usually provided by broadband provider Alternate brands provided on sonystyle.com Alternate brands provided on sonystyle.com Modem Router WiFi Portable Electronics Digital Media Player *** Portable Gaming Device Walkman MP3 players Walkman W Series MP3 player headsets PSP Netbook Personal Navigation Device Sony Valo P series nav-u systems Camera A variety of cameras Video Camera A variety of video cameras Not officially described as a netbook, but falls roughly Into this category Other eReader Sony Reader Digital Book Portable DVD Player Sony Portable DVD Player A variety of other products which are mostly peripherals or specific components of the above products Software and Cloud Platforms Operating Systems Purchase and/or Download Content Applications Stream Cloud Audio or Video Input Applications Enables Cloud Access Web Browsers Playstation3 Web Browser Websites Playstation@Store Purchase and/or Download Content Stream Cloud Audio or Video Input Websites .- I I I I I __ ------ I_ 6.2 Matlab DSMs 6.2.1 Matlab DSM for Sony Corporation NewDSM Matrx; 12-May-2009 17:39:18; Total Cost: 9050 Element 0 0 5 4 2 0 1 11 12 14 15 19 20 22 24 26 27 28 29 30 31 32 33 34 35 37 38 39 40 41 8 9 36 6 42 16 25 1 18 3 13 43 23 21 17 7 11 12 14 15 19 20 22 24 26 27 28 29 30 31 32 33 34 35 37 - 38 - 40 41 8 36 6 42 16 25 18 18 3 13 43 23 21 17 7 5 4 20 - 6.2.2 List of clusters (left to right) for Matlab DSM for Sony Corporation Cluster Member List 12-Am y-2009 17:39:18 Cluster #1 Cluster #2 Stereo Bluetooth Headset (10) S-AIR? Speaker System (11) Noise Canceling Earbuds (12) Nay-u (14] Sony Portable DYD Player (15) PlayStation3 (19) DYD (20) CD (22) VAIO Wireless Keyboard (24) USB Thumb Drive (26) High Definition Handycam Camcorder (27) Walkman W Series MP3 player headsets (28) SD Memory Card (29) WFi (30) PlayStation Portable (PSP) (31) Walkman Video MP3 Player (32) Cyber-shot Digital Camera (33) User (34) eReader (35) Sony Yaio P series (37) VAIO FW Series Laptop (38) VAJO RT Series Al-in-One PC (39) Home Entertainment Server (HES) (40) VAO HS1 Home Server (41) Cellular Voice (8) Cellular Data (9) Xperia (36) Cluseer n BRAVIAInternet Video Link Module (6) Cable Data (42) Cluser #4 Dualshock3 Wireless Controller (16) Blutooth (25) Clueler #5 Video Game Disk (1) Playstation3 Web Browser (18) Cluser 6 Home Theater AV Receiver (7.1-channel) (3) Home Theater Completer Speaker Package (13) Sony Ecosystem DSM T I ask ri I~a~d~add~l~adtd~~~~ddddd~dS-0 Il Name Video Game Disk T Blu-ray Disc " Player Home Theater A/V Receiver .- channel) DVD/SACD/CD 400 Disc Changer Universal Remote BRAVIA® Internet Video Unk Module 52" BRAVIA® S Series LCD HDTV Cellular Voice Cellular Data Stereo Bluetooth@ Headset S-AIR'" Speaker System Noise Canceling Earbuds Home Theater Completer Speaker Package Nav-u Sony Portable DVD Player lalshnrk3 Wireless Controller Dualshock3 i less Controller--Playstation@Store Playstation3 Web Browser PlayStatlon3 DVD Bluray CD Bluetooth Mouse VAIO Wireless Keyboard Blutooth USB Memory Stick High Definition Handycam® Camcorder Walkman W Series MP3 player headsets SD Memory Card WiFi PlayStation Portable (PSP) Walkman@ Video MP3 Player Cyber-shot@ Digital Camera User eReader Xperia Sony Valo P series VAIO FW Series Laptop VAIO® RT Series All-in-One PC Home Entertainment Server (HES) VAIO@ HS1 Home Server Cable Data I I I -- 2 S 4 5 6 7 8 9 10 11 12 13 14 15 16 - x x x x x x xxx x x x x x x x x x 17' 18 x 19 20 x 21 x x 22 23 24 x 25 26 27 28 29 30 x 31 x 32 33 x x 34 35 xxx 36 x 37 xx x 38 SXX 39 x x x 4 x x x 41 x 42 x x x x x x x xx Ix xxxx xx xxxx xxxxx xx xx Lx xx x x xx x mx xxxx xxxx 224 xxxxx x xx x x x xxxX EX XXXXX xxxxx x X X x xxxxx x x xxxxx x xx x xxxxx x x x x x x x XX xx xxx xxxxxxx x x x XXX 2r 21 2; x x x x XXX xxx XXX xxxx x x xxxx 4 x x x XXX x x xxx XXx x xx _ _ _ xx xxx _ _ xxxxxx xx xxxxx x xxxxxxxx _ _ _ 7. 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