News

Internet Home Alliance Launches Ecosystems Framework; Group Says Tool Will Help Companies in the Connected Home Space Mitigate Risks and Identify Key Opportunities (28/1/2004)

Internet Home Alliance, the leading cross-industry network of companies advancing the home technology market, announced today the launch of its Ecosystems Framework, a business tool that helps companies mitigate risks and identify the most promising business opportunities in the connected home market. The Alliance intends for the Ecosystems Framework to serve as a common blueprint and architectural language for industry players in order to encourage greater collaboration among companies in the space, thus benefiting consumers.

Among the key strategic questions the Alliance's Ecosystems Framework answers are the following:

-- Which market opportunities are the most promising in terms of consumer demand?

-- Which current and emerging technologies are best suited for specific products and services?

-- Which partnerships or alliances would optimize product and service delivery and result in the greatest profits throughout the value chain?

As indicated by these questions, the main purpose of the Ecosystems Framework is to identify market opportunities based on unmet or latent consumer needs. More specifically, the Ecosystems Framework indicates the types of products and services that meet fundamental consumer demand thresholds and the most appropriate enabling technology or technologies.

"This vital new business tool enables companies in the connected home space to capitalize on emerging opportunities, understand optimal timing for product introductions and utilize the most appropriate technologies," said Tony Barra, chief strategy officer, Internet Home Alliance. "In addition, it helps market players refine their product and service development roadmaps, understand their role in relevant value chains and best position themselves vis-a-vis competitors and complementers. We believe it will play a critical role in advancing the home technology market."

The Alliance's Ecosystems Framework is comprised of three ecosystems -- Family, Career and Entertainment -- that correspond to discrete consumer needs. Within each ecosystem, consumer demand, products and services and enabling technologies are aligning to create market opportunities. Following are Alliance research conclusions about each ecosystem.

-- Family Ecosystem. Within the connected home, the term "Family Ecosystem" refers to the ways in which family members use technology to interact with each other and secure basic needs like food, clothing, shelter and higher-order emotional needs. From helping families put nutritious meals on the table to streamlining household operations, technology offers families time savings, peace of mind and other critical benefits. Alliance research indicates that the most pressing unmet consumer needs addressed by products and services within the Family Ecosystem concern household routines, home operations (systems) and family management, specifically, personal communications and scheduling. There are a number of facilitating technologies within the Career Ecosystem from home computers to personal digital assistants and mobile phones. No single platform has emerged or seems likely to emerge in the near future that satisfies all the consumer needs in this category. Family communication, for instance, is facilitated by standard and mobile phones, computing devices that allow for e-mail and various custom calling features like voice mail.

-- Career Ecosystem. Although work may take on characteristics of home and vice versa, the Alliance distinguishes between the work and family spheres for the purposes of categorizing and researching various home technologies. By "Career Ecosystem," the Alliance means the people, environments and technologies that enhance career productivity and potential. What consumers want most in this area are technologies that help them strike a satisfactory balance between work and family life. The top-ranked consumer needs within this ecosystem include productivity, business communications, career education and commuting. Within the home, the main Career Ecosystem platform is the home computer, albeit supplemented by devices like PDAs and mobile phones.

-- Entertainment Ecosystem. The term "Entertainment Ecosystem" refers to the technology and content designed to address consumer needs for audio, video and game-related entertainment. In this context, entertainment is defined as purposeful leisure, separate and distinct from less directed, "free-time" activities like talking with friends. No standard technology platform has emerged in this domain, although there are a variety of initiatives that would make either a sophisticated set-top box or the home computer the central source of enhancements in this area. Cable companies, for instance, have an opportunity to provision video-on-demand and other sought-after services via their networks and set-top units. At present, however, most solutions within this domain are delivered through stand-alone components like personal video recorders.

The Alliance's Ecosystems Framework approach to the connected home market assumes that, as in the natural world, there is considerable interplay among the three ecosystems regardless of how clear the boundaries appear to be. It holds also that mobile technology is a platform that cuts across all three ecosystems rather than serving as an ecosystem in its own right.

"Our Ecosystems Framework is a ground-breaking opportunity to accelerate the home technology market by getting companies in the space talking the same language and moving together in the same direction," said Barra. "At present, the connected home is in a nascent stage where its constituent platforms are largely distinct and, more often than not, separate. We anticipate that the ecosystems will converge as time goes on, and we intend to accelerate that convergence through market adoption of our Ecosystems Framework perspective and collaborative activities."

To develop the Ecosystems Framework, the Alliance drew from, and synthesized, market intelligence from a wide range of sources: proprietary consumer research; Alliance members; observations from industry analysts; results from pilots and projects around advanced solutions, typically, under real-world conditions; and technological expertise from a variety of market leaders. No single company or other non-profit organization can collect and apply rigorous analysis to this broad base of market intelligence to produce robust, industry-wide conclusions.

In-depth information about the three ecosystems may be found in the Alliance's State of the Connected Home Market 2003 report, the Alliance's most comprehensive connected home study to date.

www.internethomealliance.com