DEVELOPERS SINGLE CLICK PAYMENTS

APP STORE

CONTENT PROVIDERS USERS

CONTENT STORE

Google and Apple created smartphone Ecosystems and shaped a market that had been only discussed for years

DEVELOPERS SINGLE CLICK PAYMENTS

APP STORE

CONTENT PROVIDERS USERS

CONTENT STORE

End-to-end Ecosystem Incomplete Ecosystem

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✗

✗

✗

Google and Apple simplified transactions between content developers and users

…. which existing dominant players had overlooked

TO BENEFIT FROM EXPECTED GROWTH IN mhealthcare AND mEnergy SECTORS, ERICSSON SHOULD INVEST IN DEVELOPMENT OF AN OPEN STANDARDS ECOSYSTEM FOR CREATION OF DEVICE TO CLOUD SOLUTIONS

Ericsson CloudApplications + Services

Wireless Channel I/O BackboneCarrier

OFFER

• Device to cloud connectivity services across Energy and Healthcare sectors• Cloud services• Content

delivery• IMS services

DEVELOP

• Cloud applications for energy and healthcare data aggregation

• Standardized Communication protocols for Healthcare and Energy devices / databases

PARTNER

• Healthcare: Medical devices: J&J, Medtronic, Philips etc; Service providers

• Energy: NIST, Power companies, sensor manufacturers, government

• Technology: Qualcomm, AT&T, Vodafone, Amazon, Microsoft, Rackspace, Net App, EMC etc

BY 2015, MOBILE USER PENETRATION WILL REACH ~80% WITH ABOUT HALF THE USERS HAVING MOBILE BROADBAND ACCESS

Mobile user penetration expected to grow to ~80% by 2015

~50% Mobile subscribers will be on 3G and faster services by 2015

2009

2010

2011

2012

2013

2014

2015

15%

21%

27%

33%

38%

43%

48%

Worldwide Percent

Source: eMarketer, Ovum 2010; Credit Suisse – Convergence 2010, team analysis

Percent 3G of total mobile subscriptions

2008

2009

2010

2011

2012

2013

2014

2015

59%

67%

71%

74%

76%

78%

79%

80%

ALSO, A SIGNIFICANT PORTION OF MOBILE BROADBAND USAGE WILL COME FROM CONNECTED DEVICES

2009 2010 2015

11 22

271

Worldwide shipments of consumer electronics devices (other than mobile phones) with mobile connectivity

Millions of units

Source: Berg Insight, "Emerging Wireless Consumer Devices" as cited in press release, Feb 1, 2011

SECTORS, LIKE HEALTHCARE AND ENERGY, WHERE PERFORMANCE DEPENDS ON INFORMATION EXCHANGE, WILL SEE FUNDAMENTAL SHIFTS IN THE WAY THEY DO BUSINESS

Healthcare Energy

• Consultations: Patients could immensely benefit from remote consultationso Rural patients in countries like Indiao Expert consultations where current

waiting times are in months!

• Diagnostics: Remote monitoring patients outside hospitals creates additional bed capacity in the delivery network and additional revenues

• Records: Centralized Electronic Medical Records, which are being aggressively pushed by the US govt will create opportunities for –o research and analyticso Consolidated and comparative

information for insurance providers

• Unidirectional network: The energy network has not changed since in structure since it was set up. There is no control loop with data fed back to govern and maintain generation and distribution.

• Increased energy consumption: Energy consumption is slated to increase by 1.4% each year. As energy becomes scarce, the onus to manage power is shared by government, user and businesses. Technology to facilitate power management needs to develop.

• User interactions: Users and devices interact with distribution networks several times through the day. Consumption can be tracked to match supply and demand.

Healthcarestrategies

HEALTH STRATEGIES

FUTURE HEALTHCARE ECOSYSTEM WOULD BE INTEGRATED SEAMLESSLY AMONG ALL STAKEHOLDERS

HOWEVER THE CURRENT ECOSYSTEM IS DISCONTINOUS AND COMPLICATED

WHILE SEVERAL INDIVIDUAL SOLUTIONS HAVE COME UP, UPTAKE EXPECTED TO BE LIMITED WITHOUT A HOLISTIC ECOSYSTEM

THIS MAKES ALL PLAYERS STARVED FOR RELEVANT INFORMATION

Stakeholder Information Gaps

Patients Segregated and incomplete informationNo action-based feedback

Healthcare Providers Dis-continuous data on patient’s healthNo information sharing for patient’s complete health profile

Insurance Providers Information for optimal plansInformation for cost saving with healthcare providers/pharmacies

Pharmacies Demand-supply management

Pharmaceutical Companies

Demand-supply managementResearch/clinical studies

ERICSSON IS IN A UNIQUE POSITION TO DRIVE THE FUTURE OF THE ECOSYSTEM BY FACILITATING INTEROPERABILITY

Specialized hardware for connected smart devices

Communication protocol

Schemas for electronic health records

Cloud based services and applications

ERICSSON WILL NEED SEVERAL PARTNERSHIPS TO LAUNCH THIS SOLUTION

Offerings Partnerships

Hardware for smart devices

Medical device companies such as J&J, Medtronic, Philips Healthcare

Schemas for electronic health records

Bodies such as ANSI, IEEEMedical device companiesHealth IT providers and software providers such as Microsoft, IBM

Communication protocol Other network equipment providers such as Siemens, Cisco

Cloud services and applications

Telcos such as AT&TApplication developers

Energystrategies

USER INTERACTIVITY IS KEY TO THE SMART GRID. USERS SAVE UPTO 15% ON ENERGY COSTS WITH MUCH BETTER SERVICE QUALITY

Data

Power1. Utilities turn off

appliances during high stress times

2. Appliances reduce consumption at high price periods

3. Users control appliances remotely via mobile devices

4. Users access prices data in real time to make consumption decisions

A NETWORKED GRID WOULD RESULT IN OVERALL RESOURCE SAVINGS

•Power generated from different sources is seamlessly passed to the grid •Generation forecasts are made from prior usage dataGeneration•Demand Variations are managed through smart load allocations in the energy marketplace•Proactive maintenance increases efficiency and prevents outagesTransmission

•Power is bundled with broadband and other utilities•Advanced metering systems increase security and prevent energy fraud

Distribution

•Imports of fuels reduce•Businesses and communities reduce carbon footprint

Regulator (Government)

Data flows seamlessly between all stages of the energy grid

THE PLAYING FIELD IS CURRENTLY OPEN FOR AN INTEGRATED MOBILE SOLUTION

Ericsson CloudApplications + Services

Wireless Channel I/O BackboneTelco Network

COMMUNICATION OFFERINGS

• Cisco• GE • Silver Springs

SYSTEM SOLUTIONS CLOUD OFFERINGS

• Amazon Web Services• Google• Microsoft

• Cisco• GE • IBM• Google • Microsoft

POTENTIAL COMPETITORS• Alcatel Lucent• Nokia Siemens

ERICSSON WILL DEVELOP AN ECOSYSTEM FOR ENERGY COMPANIES TO GET ‘CONNECTED’

•A robust technology backbone for devices to communicate with the cloud will increase efficiency and reliability.•Inter-operable standards and protocols will increase data portability across grids and allow integration of micro-grids and alternate sources.

Seamless Communication Infrastructure

•Current Ericsson products like Ericsson Money Services can be leveraged to offer rich, seamless user experience.•Users and power companies can both use real time consumption an prices information to match supply and demand.

User services

•Ericsson can participate in maintaining a power usage pattern database on the cloud.•Cloud applications will allow seamless integration across other clouds and databases.

Databases and applications

ERICSSON WILL NEED SEVERAL PARTNERSHIPS TO LAUNCH THIS SOLUTION

•The National Institute of Standards and Technology(NIST)•Department of Energy•ANSI, IEEE

Interoperable Standards

•Texas Instruments, Qualcomm, Nvidia, AMD•Sears, LG, Remington, OsterSmart Devices

•Generation and distribution companies•Micro-grids, alternate energy sources, individual user

Power Companies

•States such as Texas, California, Ohio, New Jersey, Illinois, New York and others are already actively exploring the smart grid.

Government

BUSINESS MODEL

WHILE CLOUD SERVICES PROVIDE NEW REVENUE STREAM, EXISTENCE OF ECOSYSTEM BOOSTS REVENUE FROM NETWORK PRODUCT SALES TO CARRIERS

Revenue Opportunities Healthcare Case Energy Case

• Application and device sale revenue

• Subscription revenue from consumer services

• Royalty from communication hardware chips

Connected Glucometer sends data to cloud. Customer receives alert.

A ‘connected’ air-conditioner switches to ‘power save’ mode in response to peak stress levels on grid

Consumers

• Increased data throughput grows network equipment market.

Device communicates with cloud through a broadband wireless connection

Information travels back and forth over wireless network

Carriers

• Revenue from offering enterprise services.

• Revenue from data warehousing services

The cloud based Health Information System alerts hospital

Energy company receives data in the cloud and uses it to plan capacity.

Cloud

Partner Type Partnership Motivation Potential Partners

Semiconductor manufacturers

The sensor device ecosystem is weak, Ericsson will need to partner with chip manufacturers to help develop a market for these devices

Qualcomm, Broadcom, Texas Instruments, AMD, Intel, NXP, Fairchild

Consumers

Carriers

Cloud

Telecom Companies Need access to customer account and session information in order to provide payment and other VAS products.

Relevant Telcos: AT&T, T-Mobil, Vodafone, Airtel, Etisalat, Verizon

• Cloud Infrastructure Suppliers

• Network Accelerators• Datacenter Partners

Need hardware and software infrastructure to handle mission critical applications. Working with partners reduces costs, and reduces time to market

Microsoft Azure, Rackspace, NetApp, Vmware, IBM, Dell

ERICSSON WILL REQUIRE SEVERAL TECHNOLOGY PARTNERSHIPS TO IMPLEMENT A CLOUD BASED ECOSYSTEM

SO HOW SHOULD WE EXECUTE

2011 2012 2013 2014 2015Staff team to create healthcare and energy ecosystem - technology, external relations / partner teams

Finalize technology roadmap - develop architechture, identify development priorities - identify technologies to be licensed

Identify partners & Develop partnerships - industry players, telcos regulatory bodies

Staff development projects and execute enabling technology projects

Run prototype tests

Roll-out services for mHealthcare and mEnergy/SmartGrid - US / Europe - India / China / developing world

1

2

3

4

5

6

Risks Mitigation

THIS EXECUTION IS EXPOSED TO SOME RISKS…

• Quality and reliability of telco network can not be compromised once services like mHealthcare and mEnergy are run on them

• Across Healthcare and Energy, establishing partnerships is difficult and cumbersome

Healthcare• Some hospitals (non research center) may not

collaborate as they may see their data as proprietary. Also, it may be difficult to integrate their existing medical data with a consolidated database.

• Privacy and security concerns can emerge

Energy• Several existing smart grid component

manufacturers today. Getting all of them to adopt recommended schema will be a cumbersome process

• Several non-mobile players have early mover advantage (IBM, CISCO, GE), though they do not have mobile communication capabilities

• Work with TELCOs to develop redundancies. This may become an additional revenue stream

• Carefully identify partners with aligned goals and staff senior team of strong external relation managers to manage partnerships

• Lobby to further centralization of medical records and sharing of anonymous medical information for research and education

• Deploy a strong security team on application development

• Identify players who control a majority market share (>50%). Ally with them initially and then further partnerships with other manufacturers

• Highlight benefit of mobile communication capabilities in smart grid comps to manufacturers, energy producers and service providers