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

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

6. Membership Full Advisory Board Members: Affiliate Members:

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

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

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

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

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

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

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

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

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

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

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