A Hands-On Intro to Today's Connected Home

Ric MilesPrincipalRachio

John WebsterDirector of New

Residential Construction Lennox Industries

Mollie CarmichaelPrincipal

John Burns Real Estate Consulting

Glenn RennerCEO

HomeSphere

Learning Outcomes

Explore consumer research and the technology that today's buyer will pay to have.

Identify the most sought-after connected products and systems on the market and how they can be used in current and future projects.

Discover leading-edge technology and how it can be applied to future planning.

2013 2014 2015 2016E 2020E0

3.03 3.75 5.066.4

Connected Objects in Use

IoT Explosion

IoT for the Home = A Booming Market

2014 2015 2016 2017 2018 2019$0

Connected-Home Revenue (in Billions)

IoT for the Home = Highly Desirable

Smart thermostatWearable fitness

Connected security Smart fridgeSmart watch

Self-driving vacuumWearable display

Smart clothing

0 5 10 15 20 25 30 35

Projected New Adoption by Consumers

5 years1 year

Percentage that own/plan to own

IoT for the Home by Category

2012 2013 2014 2015 2016 2017 2018 20190

Smart Home Energy

Smart Home

Security Smart Home

Security

Smart Home

Security

Smart Home

Security

Smart Home

Security

Smart Home

Security

Smart Home

Security

Smart Home

Security

Smart Appli-ancesSmart

Appli-ances

Smart Appli-ances

Smart Appli-ancesOther Sys-

Other Sys-tems

Global Connected-Home Device Shipments

Source: The Connected Home Report, BI Intelligence, 2014

Mollie Carmichael, PrincipalJohn Burns Real Estate

Consulting

The Sample is Perfect for Builders!

New Home ShopperRespondents:

21,065

Audience: Shoppers from New Home OfficesFocus: “What do they want in their next home?”

Source: Consumer Insights 2016

Valid for New Home and Resale Shoppers

92% New

77%Resale

Consumers were shopping both new and resale.

More Time.

More Savings.

More Comfort.

The key ingredients to good technology?

85%want energy-efficient home

products

if it will save on their monthly

expenses.

Buyers Will Pay to Save. Prove It.

$5k for $50/Mo

$10k for $$100/mo

$20k for $250/Mo

$30k for $250/Mo

No interest

0% 5% 10% 15% 20% 25% 30% 35% 40%

What will they pay…by Monthly Savings

Top Energy-Efficient Features

1. Lighting2. Temperature Control3. Tankless Water Heater4. Insulation5. Clean Air6. Solar Panels

65% want a smart home

monitoring system for $2,500.

57% want to manage their

energy bills. Make them comfortable physically and

financially.Source: Consumer Insights 2016

What smart-home products generatesales and deliver benefits for

builders/homebuyers?

John Webster, Director of Residential New Construction

Lennox Industries

Ric Miles, Head of Strategy and Business Development

Rachio

Smart Systems that Intelligently Manage People’s Living Environment

iComfort S30 3.1 smart communicating thermostat

Control from smart device

Smart Away Mode

• Geo-fencing technology uses the GPS on your mobile phone to detect if you are home or away

• Automatically adjusts your temperature when you leave the house and come home

• You’re always comfortable and always saving money – without thinking about it

• Adapts to your Life

Leaving the HomeAutomatically sets the

temperature back to save energy

Returning HomeAutomatically returns system to normal

schedule

Smart Away

Feels Like Temperature

• Comfort is a combination of temperature and humidity

• Just like the weather report, Feels Like factors in temperature and humidity

• When you set it to 72, and it Feels Like 72 – all year long

• With Perfect Temp – Set one set point and the system will heat or cool to keep it exactly where you want it

Allergen Defender Monitors air quality by

zip code Automatically turn on

fan to clean the air Allergy relief when you

need it

2016Enhancements

iComfort S30 3.1

Automatic Detection

Automatic Equipment Setup

Introducing the iComfort S30 Installation Report

Verify Installation

Review Settings

Remote Troubleshoot

Day View

Hour View

Toggle On/Off

Cursor10/16/15

See total runtime hours

Performance Reports

Advanced Warnings• Truly proactive system

diagnostics• Prevent problems before they

occur• Alerts homeowner and dealers

about potential issues before they become problems

Smart Alert

Your system is experiencing a problem. Please contact a service technician

Buyers Pay to Save

What is the current adoption rate for connected products in the industry?

At your company?

Why do consumers adopt?

97% want

the lowest operating costs.

90% want to

prepare for rising energy costs.

ranked a functional layout over

energy-efficient features.

Only 15%

said energy efficiency was not important to them

Most Desired Smart Home Devices

Source: 2015 State of the Smart Home Report – iControl Networks

Most desired – Self Adjusting Thermostat

Optimistic GrowthM

• Acceptance of smart control products has been increasing at a rapid rate, driven by smartphone penetration and increased consumer awareness.

• Lennox adoption rate has increased significantly.

• Over half the high-end systems sold are controlled by smart thermostats.

• Smart technology is a major driver for the HVAC industry.

• Wi-Fi thermostat sales will double by 2017; 10X by 2020.

Smart Controls = Smart $• If it ain’t broke don’t fix it: historical

sprinkler controller turnover rate has been around 6%.

• But when it comes to smart, 86% of customers updated a working controller for a smart controller.

• Market forces like drought, rising water prices and growing channels like Amazon are expanding the turnover rate.

What does the future hold?

Solutions on the Market Today

1. Security2. Temperature control3. Lighting4. Entertainment5. Appliances6. Measured performance7. Better health8. Community

The FutureHeated floors?

42% will pay $1,500 for heated bathroom floors.

Another 8% will pay $4,500 for a heated driveway.

Advantage?Comfort.

The Future

60% will pay for built-in speakers at $1,500.

58% will pay another $1,500 for a Bluetooth sound system.

Advantage?Entertainment and Comfort.

The FutureSmart Grid AppliancesTurn appliances on remotely.Start dinner as you are leaving the office.Wash a load of laundry while on vacation.Monitor energy usage — from ANYWHERE.Turn your appliances on during non-peak times.What’s next? Tell your robot vacuum to have the house cleaned before you get home!

Advantage?Performance. Longer-term savings.

Source: CNBCPhoto: LG Electronics

The FutureHealth devices as the Boomers get olderTelehealth links doctors and patients to track health and safety.

Videoconferencing with a physician for a scheduled checkup.

Track diabetics by transmitting daily glucose levels via tablet.

Updates on heart rate and weight with a step on the sensor-equipped treadmill in your home gym.

Advantage?Comfort. Time. Potentially Savings.

The FutureVirtual ViewNot everyone is blessed with the pocketbook to have an apartment or home with stunning view.

Advantage?Views sell. Emotion. Comfort.

Source: CNBCPhoto: The Sky Factory Source: Consumer Insights 2016

The FutureHow will the driverless car/Uber impact the garage?…or future transportation?

Advantage?Time. Money. Comfort. Connection.

Moving beyond Early Adopters Homeowners purchasing/installing

smart-home products to help sell the house faster

Most popular smart-home technology currently installed: smart entertainment systems smart security smart temperature controls

Source: Coldwell banker survey

Half of Americans will have smart-home tech by end of 2016

1950’s

1970’s

2000’s

Expanding core thermostat functionality to a ‘lifestyle’ tool

… integrating other apps and services

Source: IMS Research Worldwide Shipment Forecast for Remote Access and Control Thermostats (Millions), Gartner

Future: An Open Platform

Prognostics Smart Diagnostics

Performance Metric

“Prevent problems before they occur”

“Provide better information on what broke and how to fix it”

“Provide information on system performance against baseline”

Wireless connectivity iOT enablement“Provide wireless connectivity to

HVAC equipment”“Provide seamless integration

with other devices in the home”

Controls“Stay cutting edge in design and

development of controls”-connectivity of all HVAC

components

By 2020, 30 billion things will be connected … every product >

$100 will be smart• New technology will be a “Game

Changer”• As new technologies emerge

prices will drop for smart products (i.e., mobile phones)

• As prices drop adoption rates for smart home products will soar

Future of Smart Sprinklers

The Early Years: DIY Market

Growing Up: Remodelers and

Landscape Professionals

Maturation: Customer Demand

in New Builds

Conclusions Now is the time to capture your share of the market, expected to reach $490 billion by 2020. Demand for IoT for the home will continue to grow, driven by: Full penetration of smartphone usage. A growing IoT market with smart home technology at the top of

consumers’ minds, particularly: Increased comfort and security Cost savings, which remain top priority for consumers Opportunity for energy savings and “being green”

Advances in technology that will overcome security and pricing concerns, lowering prices.

Glenn RennerHomeSphere720-974-6183grenner@homesphere.com

Mollie CarmichaelJohn Burns Real Estate Consulting 714-317-4488mcarmichael@realestateconsulting.com

John WebsterLennox Industries972-497-6232john.webster@lennoxind.com

Ric MilesRachio303-947-7559 ric@rachio.com

Today’s handouts are available for download at www.homesphere.com

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