CONSUMER IOT

INTERNET OF THINGS November 2017

WHATS
CONSUMER IOT?
Onlife scenarios

Who I love
How I move Where I work
What I do Where I Live
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Consumer IoT stands for those services focused on the Telemetry of the individual,
connected through Consumer Devices and IoT Technology.
TRACKERS

Portable Safety
Peace of mind
Find me Connected
My pets accessories

Quantified
self devices

Things you love

Telemetry
Insurance
Emergency
You

Your Garment Your Ride

Communication
devices

Your Home Connected

(out of the assets e.g. carmakers
scope of this (out of the scope
(out of the scope of this document) of this document)
document)
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Following a common IOT value chain with three special characteristics
Type of connectivity is not a remarkable feature and
it is not manageable by the user

Type of traffic (range, bandwidth, exchanged data Value for the user resides in Service,
volume, etc.) are adapted to the use case Functionality and Data

VAS

SIM/E-SIM DATA
SMART M2M
COMM MODULE / CHIP CONSUMER
DEVICE (e.g. subscription APP
(e.g. Sigfox, NB-IOT, LTE-
management,
M, Hybrid GSM + LPWA) ANALYTICS
cellular, NB-IOT, etc.)

DEVICE SMART CONNECTIVITY SERVICES DATA & INSIGHTS

B2B2C
B2C
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MARKET SIZE

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Vodafone has opened the category based and communicated a global IOT
market opportunity

4.4bn global opp just in IOT connectivity for Consumer devices.

Vodafone market share (10%): 444m opp for Vodafone in IOT Connectivity.
Connectivity is 10% of the total value of the solution: 4.4bn total opp (incl. service + HW)
for Vodafone.

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Global Consumer IOT market size and growth forecast
Connected Consumer Devices (unit) * Number of connected consumer devices is going to grow
2,2 47% 50% steadily in the coming years +40% CAGR and both HW and
2,0 CAGR 44%
1,8 40% associated services markets will also grow at 22% and 25%

Growth Rate (%)

1,6 45%
1,4 30% CAGR respectively.
Billions

1,2 41% 2,0

1,0
0,8 1,3 20% Consumer connected devices market that could be
0,6
0,4
0,2
0,7 0,9 10% connected as IOT devices (see categories below) will reach a
0,0
2017 2018 2019 2020
0% global size of 83,9bn$ in 2020.

***
Services ** Hardware
26%
40,0 30% 22%
50,0 25%
35,0 CAGR 25% 25% CAGR 22% 22%
25% 45,0

Growth Rate (%)

30,0 40,0 20%

Growth Rate (%)

23% 20% 20%
Billions US$

35,0

Billions US$
25,0
37,9 30,0 15%
20,0 15% 46,0
30,1 25,0 37,6
15,0 20,0 10%
24,1 10% 30,9
10,0 19,6 15,0 25,7
5% 10,0 5%
5,0 5,0
0,0 0% 0,0 0%
2017 2018 2019 2020 2017 2018 2019 2020

* Anti-Theft and Tags,

8Connected Car, Toys, Motion Sensors, Baby monitors, Digital Cameras, Portable Media Players, Video Game Handhelds.
INTERNET OF THINGS ** Digital cameras, Toys, Consumer Robots, Healthcare, Baby monitors, Portable Media Players, Video Game Handhelds.
*** Digital Cameras, Consumer Robots, Toys, Exercise equipment, Health monitoring, Baby monitors and Smart Garments.
[Source: Gartner]
Market Forecast for Consumer IoT Wearables is Growing but the relevance
of celular connectivities is still low

% TOTAL CELLULAR Wearable Device Sales

300,0 100,0%
Global Wearable Device Sales
250,0
80,0%

200,0
60,0%
Millions of units

150,0
40,0%
100,0

20,0%
50,0

0,0 0,0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Smartwatch Smartglasses Fitness Band Hearables Feature Watches Others Global CELLULAR Wearable Device Sales: % of Total

Short range connectivity

Total global wearable 25% of global wearables
currently dominates due to
higher cost of cellular enabled sales forecasted to jump will have cellular
devices, as opposed to those to +265 million units in connectivity in 2022.
with tethered connections. 2022.

Feature watches: a connected wristwatch WITHOUT a 9 Others: device types such as smart shoes, smart
INTERNET OF THINGS high-level operating system (e.g. Android Wear) and NOT clothes, smart jewelry, smart handbags, smart purses,
Source: Strategy Analytics capable of running third party applications smart helmets, and other similar products
Startups like Tile are already succeeding providing Consumer IoT
services directly to the consumer

Keep track of your keys, bags or

whatever else you can think of with +10m Total units sold
Tile, the little Bluetooth tracker that
easily attaches to just about
anything
x3 Sales forecast in 2020

Price Range: $15 - $30

+5m Units sold in Amazon
Bluetooth connectivity
Find lost items with your phone
(ring your things) Plans to integrate
Find your phone with the device Tile in all BT
devices
Community helps locating
things (Bluetooth network)

6-12 months battery lifetime

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ENABLING
TECHNOLOGIES
AND
ACCELERATORS
Short range technologies are most used currently, but new IoT
connectivity creates an opportunity for Telefnica
Consumer IoT Services vs Connectivity Type
New IoT CONNECTIVITY ADVANTAGES
New IoT Wide range technology
connectivity
Secure connection
2G-3G Autonomous connectivity
Can be connected out of the box
Short Range
connectivity Short Range SHORT RANGE DRAWBACKS
connectivity
Short range technology
Not a secure connection
Dependent on smartphone
t Not easy to configure

New IoT connectivity will help OEMs enable new Consumer IoT services and use cases,
creating an opportunity to strengthen the position Telefnica in the Consumer IoT value chain.
The challenge will be to minimize HW and connectivity costs and battery consumption to make
new services and use cases appealing for customers.
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The Arrival of New Connectivities like Low Power Wide Area (LPWA)
could be a Key Enabler for Consumer IoT

Networks Designed for IoT LPWA Types and Characteristics

Sigfox NB-IOT LTE-M

Unlicensed Licensed Licensed

TECHNOLOGICAL Available Now In late 2017 In 2018

AVAILABILITY

~100bps / ~30kbps / 20-

BANDWIDTH 1Mbps
600bps 63kbps

LATENCY milliseconds -
seconds seconds
Traditional cellular networks were designed for human second
communications and have evolved for massive data transmission
Connected objects have other network needs
COST 2-10 10-16 15-20
LPWA Advantages Per module

Wide range (i.e. 10 km) and low- Deep indoor coverage

throughput
GEOGRAPHIC Argentina, Brazil,
Spain, Germany, Planned for
Reduced consumption Lower cost connectivity AVAILABILITY Colombia, Germany,
Chile* Spain and Brazil
of battery and devices Mexico, Spain, UK
TEF Footprint in 2018
*Open Labs and trials

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eSIM as a key dynamizer for the growth of connected end-user
devices
What is an eSIM? The enabler for connecting the next billion devices
Reprogrammable SIM embedded in a device.
M2M and Consumer specialized profiles.
Mature technology; all the major operators agreed a common GSMA standard.

Benefits of eSIM FOR OEMS/BUSINESSES FOR CONSUMERS

Zero form factor (chipset integrated). Out-of-the-box connectivity, zero

Efficiency as easy to integrate in configuration and not perceived as a
manufacturing and distribution regular connected line.
processes. Secure (no tampering)

eSIM boosts the addition of connectivity into more everyday objects and reinforces
Telefonicas role as top-of-mind agent to connect end consumer devices
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COMPETITORS LANDSCAPE

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 V by Vodafone https://www.youtube.com/watch?v=Fp2Le8f1n3Q

V-Pet V-Bag
4990 device 5990 device
+ 7/month + 5/month

V-Sim

V-Auto V-Camera 990 SIMcard +

3-7/month
7990 device 37990 device
+ 7/month + 7/month

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V-Auto https://www.youtube.com/watch?v=fBaeT6P9xKQ
COMPETITORS: How do they approach the Consumer IOT?
B2C dedicated
B2C Offering organization B2B2C B2B2C verticals / partnerships
V-SIM
V-Pet Consumer electronics.
V-Auto Global SIM integrated in manufacturing and
distribution processes
V-Camera
V-Bag
Fitness and Sports: Wearables, bracelets, smart watches.
n/a Localization: GPS Trackers for valuables, cars, elder care, etc.
Car Connect Entertainment: Enabling additional services for TVs, tablets,
consoles, loudspeakers, etc.
Smart Home: Power utilities, facility management, security, etc.

Wearables
Kids Monitoring devices for cars or elder care
tracker Pets
Smart clothing,
Generic
tracker
Home n/a WIP
security

Complete Product play: Only connectivity play

Device + Connectivity + Service 17
COMPETITORS: How do they approach the Consumer IOT?

o B2B2C approach and Global SIM as key enabler for OEMs

o Preconfigured and ready-to-use global SIMs to be fully integrated in manufacturing and distribution processes.
o End-user gets Simple Out of Box Experience (SOBE)
o Seamless connectivity, no configuration. Vodafone positioning for B2B2C
http://www.vodafone.com/business/iot/consumer-electronics
o Connectivity included as part of the value of the product

o B2B2C approach and GlobalSIM

o Partnerships with different device vendors to include its Global M2M SIM in
wearables, monitoring devices for cars or elder care, pets, smart clothing, etc.
o One-fee and per usage models for the end-user.
o LTE-M prioritized above other LPWA options
o Ongoing trials in Spain, Belgium and France. Commercial launch in 2018.
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COMPETITORS: How do they approach the Consumer IOT?
o B2B2C approach with focus on different verticals
o Fitness and Sports: Wearables, bracelets, smart watches without companion
device and as a key source for big data source
o Localization: GPS Trackers for valuables, cars (incl. monitoring), elder care, etc.
o Entertainment: Enabling additional services for TVs, tablets, consoles,
loudspeakers, etc.
o Smart Home: Any kind of connected devices related to telecoms, power utilities,
facility management, security, etc.
o Global SIM (2G to 4G) and strong bet on LPWA (NB-IoT)

o B2C approach with trackers and smartwatches for kids

o MoveTime (kids watch): B2C SIM with data + voice bundle activated (sold separately).
o MoveTrack (general purpose tracker): B2C SIM with data bundle activated (sold
separately).
o B2C SmartHome approach with connected devices. Broadband connection independent.
o Smart Security (Orange): Surveillance cameras connected via 2G and WiFi.
o Hogar Conectado: (Claro): Z-wave connected sensors to and ControlHub.

Example video from CLARO (TV commercial)

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TRACKERS
Track iT

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Trackers provide a peace of mind solution. For those we love and the things
we care about the most
VALUE PROPOSITION

To ensure that all members of the family (parents, kids, The service also lets you create Safe Zones at home, work
elders, pets) and the things you need (keys, suitcases, etc.) or away, alerting you when it moves outside them.
are safe, secure and easily found.

DEVICES SMART CONNECTIVITY SERVICES DATA & INSIGHTS

GPS Tracker with cellular
connectivity (LPWA versions
not available yet).
Battery life: average of 3-4
days depending on usage.
No communication
services are offered
through these devices, so
M2M connectivity is used.
Data usage is not intensive
so data packages tend to
be cheap.
Wide area location (GPS and
cellular network).
Geo-fencing and alerts.
Mobile app as main UX point
of contact.
Usage data collected can be
used for new monetization
streams and discover service
niches (kids, elder, suitcases,
pets).

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Trackers: The first and promising b2c connected devices offer to
explore
HOW IT WORKS OB ACTIVITY / STATUS

Locate anything, anywhere, anytime Pet Tracker being commercially piloted (BR,UR) or conceptualized (CH).

1 Select your tracker Pet Tracker being developed in Colombia in collaboration with Seguros
(general vs pet) and Sura (B2B2C).
download the vs General Purpose Tracker being piloted (BM, insights, willingness to
correspondent app pay) with real customers (SP).

2 Attach the tracker to anything that you want to track COMPETITORS

3 Pair your device and easily locate your items in a Vodafone. Just launched V by Vodafone, offering a B2C connected
map. device proposition, including Pet and General tracker services (GE,SP,IT
and UK).
4 Set up a geofence.
Claro. Commercializing a general purpose tracker from Alcatel (CO, MX,
EC, DO), kids trackers as #tuvidaconectada product
5 Get alerts when your item has
left the designated area. OTT: There are + 100 mass market stand alone solutions under $40USD,
mostly based on Bluetooth.
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CONNECTED VEHICLE
Drive iT

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Connected vehicle services as a Consumer IOT service
B2B approaches (e.g. for automakers) or connecting in-vehicle data plans are out of the scope of this document.
AFTERMARKET VALUE PROPOSITION

Aftermarket Connected Car services Value for the user starts with the telemetry and
are built around a connected device other VAS can be offered around to complete
(e.g. OBD dongle, GPS tracker). the proposal: Insurance, Advertising, etc.

DEVICES SMART CONNECTIVITY SERVICES DATA & INSIGHTS

OBD dongle with
embedded M2M SIM.
GPS tracker with regular
M2M SIM.
M2M connectivity is used
because of batch operations
possibilities and management
transparency for end-user.
Data packages and bandwith
may vary depending on the
offered services (telemetry
vs. WiFi hotspot)
Telemetry, localization,
remote diagnosis, WiFi
hotspot, etc.
Mobile app as main UX
point of contact and
services interaction.
Usage data collected can be
used for new monetization
streams: rewards, low
insurance fees, etc.

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Competitors are already offering Connected vehicle B2C products

Launched on Nov17 as part of the V by Launched on Nov17. HUM+ and HUMx are the B2C offer
Vodafone portfolio of connected Car telematics services and WiFi from Verizon on connected car: OBD
things. hotspot. device + speaker + mobile app.
OBD device + mobile app: 7990 + 10 /month per 10GB (49,95 device 2-year subscription required plus taxes
7/month service fee. fee after end of 2017). and fees. $20 One-time activation fee.
Functionalities: Canadian start-up Mojio is the Functionalities:
Car location manufacturer of the OBD device. Vehicle diagnostics
e-Call Functionalities: Pinpoint and emergency
SafetyScore (statistics based in WiFi hotspot. assistance
driving behavior). Car location. Stolen vehicle assistance
Real-time25car activity tracking. WiFi hotspot (HUMx).
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EMBEDDED SENSORS

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Embedded Sensors and new form factors IOT-connected devices as a
new way to interact with the physical environment
There is an upcoming new category of connected devices and
embedded sensors around the user but this category will not
really succeed until beyond 2020.
Current connected consumer devices (e.g. wearables) lack of
traction and adherence because of functionality issues or
connectivity:

When mature, LPWA ecosystem (networks and devices available) is expected to solve most of the current problems
for stand-alone connectivity in consumer IOT devices adoption: Cost, form factor and battery life.

Embedded sensors scenarios to be treated as long term and under an innovation approach.
To get a relevant position in this coming scenario, TEF needs to accelerate its LPWA connectivities roll-out plans
and push manufacturers for comms modules availability.

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