Connected Home

Maria Boura, Head of Strategy, Marketing & Communications South East Europe Athens, February 9, 2016

Public | © Ericsson AB 2014 | 2014-12-5 | Page 2

MOBILE INFRASTRUCTURE OPERATIONS & BUSINESS SUPPORT SYSTEMS TELECOM SERVICES TV PLATFORMS

37,000 25,700 5 busd 65,000

2.5 Billion 1 Billion

180 33 busd

118,000

Subscribers managed by us

Subscribers supported by us

Services professionals

Net Sales 2014

Employees

Countries with customers

R&D Employees

Patents

In R&D

Ericsson at a glance

Page 3

Ericsson ConsumerLab annual research

1.1 billion REPRESENTING

PEOPLE 100,000 RESPONDENTS

15 STUDIED MEGACITIES

40 MORE THAN

COUNTRIES

Unbiased Consumer insights since 1995

Page 4

https://www.youtube.com/watch?v=ESOPEmw609w

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connected home research

5,000 RESPONDENTS

5 COUNTRIES

Chile, Russia, Spain, Sweden, USA

1,000 per country

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 6

Eight Connected home solution areas

Organization

Grocery Shopping

Socializing

Health & Wellness

Entertainment

Housekeeping

Energy & Utility

Home Security

Source: Ericsson ConsumerLab, Connected homes, 2015

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 7

High interest for connected home services

Base= all

(n=1000) (n=1000) (n=1000) (n=1000) (n=1000)

39% 45% 31%

55% 64%

(n=5000)

47%

Total USA Spain Sweden Russia Chile

Source: Ericsson ConsumerLab, Connected homes, 2015

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 8

Control, peace of mind and simplicity

Q.B1a Base=Rated overall interest in Connected Home 7 or higher

Helps control (things in) my home/ good for when I am away

Improved safety/ security (peace of mind)

New/ cutting-edge/ state of the art (high tech)

Makes life easier

I would like to learn more about it/ need more information

Convenience

It helps to keep me informed/ provides me with information

It can be used/ accessed through an electronic device

It is good/ I want it

(Improved) time efficiency/ saves time

Provides (improved) comfort (Improved) energy efficiency/ saves energy

It is helpful/useful

Helps save money/ cost-effective

Efficiency

Easy to use

Improves quality of life I already have (something similar to) this

Other

None/no reasons

Don't know

24%

19%

19%

12%

11%

9%

8%

8%

7%

6%

6%

5%

5%

5% 3%

2%

2%

1% 3%

1%

3% Source: Ericsson ConsumerLab, Connected homes, 2015

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 9

Lack of interest is the main barrier for adoption

No need/ not interested

Cost/ too expensive

Too difficult/ complicated (hard to use, difficult to learn)

Satisfied with my existing systems/ services

I do not want to be (highly) dependent on devices/ technology

Not trustworthy/ concerned about security/ privacy

I do not know enough about it/ I need more information

This would not work for my house (house is too small, etc.)

House is usually occupied/ someone is at home most of the time

It's not a priority

I do not own my home (live in an apartment, condominium, etc)

Don't want to get lazy

Other

None/no reasons

Don't know

33%

14%

11%

10%

9%

9%

6%

3%

3%

2%

1%

2%

7%

3%

6%

Q.B1b Base=Rated overall interest in Connected Home 6 or lower

Source: Ericsson ConsumerLab, Connected homes, 2015

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 10

Profiling

› 18-34 Yrs. Old

› Males

› A detached single family home

› In a suburb of a major metropolitan area

› Early adopter

USERS INTERESTED NEEDS

› 25-29 years old

› Male and female

› In the city of a major metropolitan area

› Reside in 2 to less than 5 years old building

› 21-34 years old

› Females

› Several children

› In the city of a major metropolitan area

› Reside in less than 20 years old building

› Care of dependent elders

Source: Ericsson ConsumerLab, Connected homes, 2015

Base= users of all 8 categories Base= highly interested in connected homes Base= high needs in all connected home categories

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 11

Priority areas – connected homes

Deg

ree

of N

eed

Interest levels % Highly interested

* Bubble size denotes current usage

Socializing

Health & Wellness

Home security

Energy & Utility

House keeping

Grocery Shopping

Organization

Low-hanging fruit

Long term opportunities

Look for Unmet needs

Near-term opportunity

Entertainment

Source: Ericsson ConsumerLab, Connected homes, 2015

Base= all

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 12

preference for a single service provider

34%

66%

Base : Those highly /moderately interested in any of the 8 areas and interested in integrated home solutions (Rated 7 or above )

Q.C5a Source: Ericsson ConsumerLab, Connected homes, 2015

40%

50%

10%

OVERALL Interest in Integrated CONNECTED HOME service

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 13

Consumers consider many potential suppliers of connected home services

39.0%

Alarm/Home Security companies Electronics

manufacturers Electric/Gas/ Heating Utility companies

Wireless/ mobile/ telecom providers

Internet Service providers

Home appliance companies

Technology/ Software companies (Google, Microsoft)

Consumer electronics stores

Home improvement retail stores

Mass Merchant stores

Computer companies (Dell, Toshiba)

Emerging companies (Nest, Quirky)

Online retailers (Amazon)

32.3% 31.0%

26.6% 25.1% 23.8% 22.6% 20.6% 19.9% 17.9%

14.0% 13.1% 12.0% 11.3%

Base : Those highly /moderately interested in any of the 8 areas and interested in integrated home solutions (Rated 7 or above )

30.8% 30.6%

City/local municipality (provided as public service)

Local telephone companies

Cable television

Source: Ericsson ConsumerLab, Connected homes, 2015

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 14

Integrated service provider roles

Energy & Utility Home Security

House keeping

Grocery Shopping Socializing Entertainment

Connected Home

Advisor

Integrator

• User-desired benefits of a connected home that is completely integrated are ease of use and maintenance, simplified account management and billing, and cost savings.

• Install/ program the solution, • Make recommendations • Anticipate future service needs

• Combines each connectivity service into an all-in-one universal command interface

• Integrate best of breed devices and services

• The solution may or may not have to be delivered by a single provider but needs to be interoperable and possible to integrate..

Source: Ericsson ConsumerLab, Connected homes, 2015

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 15

Key findings

Consumers demonstrate a high interest in connected home services.

Users are calling for simplification and support.

People currently living in connected homes are not the same as those who would benefit from one.

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 16

https://www.youtube.com/watch?v=UFLJmklZnlQ

Ericsson_ConsumerLab_10_hot_consumer_trends_2016_Presentation_16_9 | GFSA-15:000313 Uen, Rev A | 2015-12-08 | Page 17

https://www.youtube.com/watch?v=glBOU8XsjZ8