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Roadmapping the convergence of technologies for services over broadband A benchmarking effort Tugrul U. Daim Portland State University, Portland, Oregon, USA, and Pranabesh Dash Intel Corporation, Hillsboro, Oregon, USA Abstract Purpose – This paper aims to present an application of the technology roadmapping approach for exploring the implications of technologies converging for a service sector. Design/methodology/approach – The paper uses the fundamental concepts behind creating a technology roadmap. These include market and business analysis, product analysis, technology analysis and resource allocation. Findings – The study demonstrates the use and modification of technology roadmaps for technology driven service business segments. Originality/value – The process of developing a roadmap for services over broadband presented in this paper can be used as a standard process of developing a technology roadmap for any organization in a similar business. Keywords Strategic planning, Services industries, Mix mapping, Digital technology, Broadband networks Paper type Research paper Introduction Technology Roadmapping (TRM) which is getting broad attention in technology industry is a technique that helps organizations to do strategic planning and align technology with business objectives. This paper presents creation of a technology roadmap to deliver services for digital data streaming over broadband. The ever-expanding demand for mobility and digital content has created great market opportunities for cable and telecom companies. Products such as desktop, laptop, PDAs, cell phones, and digital players are part of the main customer drivers in accessing the digital contents. Every digital content owner is eager to access their paid and private information from everywhere. Therefore, there is a real demand for reliable portable solution to enable the mobile users to be more productive and happier. A number of companies around the world already deliver similar products but limited services. This paper explores what it would take to offer the service in the Northwest USA. A benchmarking effort will be conducted among the actual companies with actual products. The market analysis, benchmarking and roadmapping process presented in this study can be used by any company interested in offering similar services in a region. A hypothetical company named Company X, planning to be a player in the market, will be assumed for which the aforementioned analyses are conducted. The product features The current issue and full text archive of this journal is available at www.emeraldinsight.com/1463-5771.htm BIJ 18,5 668 Benchmarking: An International Journal Vol. 18 No. 5, 2011 pp. 668-693 q Emerald Group Publishing Limited 1463-5771 DOI 10.1108/14635771111166811

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Page 1: 3.roadmapping the

Roadmapping the convergenceof technologies for services over

broadbandA benchmarking effort

Tugrul U. DaimPortland State University, Portland, Oregon, USA, and

Pranabesh DashIntel Corporation, Hillsboro, Oregon, USA

Abstract

Purpose – This paper aims to present an application of the technology roadmapping approach forexploring the implications of technologies converging for a service sector.

Design/methodology/approach – The paper uses the fundamental concepts behind creating atechnology roadmap. These include market and business analysis, product analysis, technologyanalysis and resource allocation.

Findings – The study demonstrates the use and modification of technology roadmaps for technologydriven service business segments.

Originality/value – The process of developing a roadmap for services over broadband presented inthis paper can be used as a standard process of developing a technology roadmap for any organizationin a similar business.

Keywords Strategic planning, Services industries, Mix mapping, Digital technology,Broadband networks

Paper type Research paper

IntroductionTechnology Roadmapping (TRM) which is getting broad attention in technologyindustry is a technique that helps organizations to do strategic planning and aligntechnology with business objectives. This paper presents creation of a technologyroadmap to deliver services for digital data streaming over broadband.The ever-expanding demand for mobility and digital content has created greatmarket opportunities for cable and telecom companies. Products such as desktop,laptop, PDAs, cell phones, and digital players are part of the main customer drivers inaccessing the digital contents. Every digital content owner is eager to access their paidand private information from everywhere. Therefore, there is a real demand for reliableportable solution to enable the mobile users to be more productive and happier.A number of companies around the world already deliver similar products but limitedservices. This paper explores what it would take to offer the service in the NorthwestUSA. A benchmarking effort will be conducted among the actual companies with actualproducts. The market analysis, benchmarking and roadmapping process presented inthis study can be used by any company interested in offering similar services in a region.A hypothetical company named Company X, planning to be a player in the market, willbe assumed for which the aforementioned analyses are conducted. The product features

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1463-5771.htm

BIJ18,5

668

Benchmarking: An InternationalJournalVol. 18 No. 5, 2011pp. 668-693q Emerald Group Publishing Limited1463-5771DOI 10.1108/14635771111166811

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will be introduced progressively to either accommodate newer technologies or introduceother changes. The study includes creation of roadmaps of market, product, technology,research and development (R&D) and environment. These factors are considered veryimportant for organizations that are sensitive to emerging technologies in the maturingbroadband market. The proposed approach at the end will help identify marketopportunities. Considering traditional TRM methodologies the effect of environmenthas been identified as a gap. This paper emphasizes the importance of environmentalong with the traditional TRM layers. The process of developing a roadmap for servicesover broadband presented in this paper can be used as a standard process of developinga technology roadmap for any organization in similar business.

The availability of broadband and the arrival of WiMax technology in the Portlandmetro area (WiMAX, 2010) opened a lot of opportunities for new products and services.To exploit the availability of bandwidth and reach of internet, companies can makeany legal digital content (Russell, 2008) that one can access on a home or fixed systemgo mobile (Digital TV Europe, 2010) while keeping security in mind.

There are situations when people want to show the software installed on their homecomputer to a friend at a location away from home, using a mobile laptop. Anothersituation to consider is where a person has subscribed to certain premier channels onCable TV but is traveling, and hence missing out on some of the favorite programs.If the user has paid for it, why should there be the constraint that he or she cannot watchit while away from home? Also a situation where a person wants to access his voicemail,fax received at home or state of home security system to be accessible from anywhere.

TRM is planning framework widely used in industry for strategic and long-rangeplanning. The traditional TRM presented by Phaal et al. (2004) consists of three layers(technology, products and markets). This paper will emphasize on the importance offuture environment conditions (R&D and government policies). The environmentcondition is presented as an additional layer in the TRM. This study will clearly showhow the additional factors can have high influence on the destiny of the technology.

The paper is organized as follows. A hypothetical company named Company X,planning to be a player in the marker, is assumed whose profile matches a typicalconsumer for this study. First, an overview of the company and its product offerings arepresented. Followed by the overview, the impact of the environment and policy that affectsfunctioning of Company X in the market is studied. Then a detailed market analysis isconducted by segmenting the market and discussing the customer value drivers (CVDs)for Company X. Next a detailed product technology analysis is presented thatsubsequently helps in scenario planning and roadmapping presented in the final section.

Literature reviewTRM helps organizations communicate and explore relationships between evolving anddeveloping markets, products and technologies over time (Phaal et al., 2004). TRM canalso be used as a tool to integrate corporate strategy with technology strategy for betterprofitability (Phaal et al., 2005; Kameoka et al., 2003). The TRM process being very flexiblethere are multiple ways to representing a technology roadmap and are used for differentpurposes (Phaal et al., 2004; Phaal and Muller, 2009). The flexibility of TRM process wasseen as a roadblock for adoption in case of some organizations. There were some proposedapproaches to customize the TRM process to achieve a balance between personalizationand standardization (Lee and Park, 2005). TRM approach also has been suggested to help

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better decision making in long term. The decisions under consideration are newtechnology product development by incorporating factors beyond finance based andreturn on investment (Petrick and Echols, 2004). Roadmaps provide a compact visual ofthe high-level view of an organization and the technology under review. The visual natureof the roadmap supports better communication among stakeholders and considered to bethe main reason behind the attractiveness of TRM method (Phaal and Muller, 2009).

Technology development is part of a complex system of knowledge generation andtransfer and has dependencies on factors such as technical barriers, associated changerequired and organization strategy. Most of the time TRM process assumes a given futureand finds possible paths to get there. The future might consists of alternatives and it isimportant to incorporate it into the TRM process (Lizaso and Reger, 2004). Scenarioplanning is one of the tools for making strategic decisions in an environment of uncertainty.It helps anticipate changes and identify discontinuities, reduces risk, provides a commonframework for discussing and dealing with complex situations (Chermack et al., 2001).

Wide deployment of broadband has enabled real-time and rich-media collaboration.This has helped create new markets and strategies for broadband-based technologies.This topic has been dealt in detail in the compilation by Austin and Bradley(2005). Though the work does not create a roadmap for broadband in the traditionalsense it clearly demonstrated the importance of policy making and environment onfuture of broadband. The TRM process presented here tries to incorporate theenvironment and scenarios during roadmap creation.

Client overviewA typical consumer of this study is a company that is already in the video streaming,providing limited place-shifting (Sling Media, 2010) or time-shifting (The eMarketer Blog)solutions and content providers such as cable TV service providers. Though newentrants are also targeted but it might take more capital investment to acquire technologyand creating relationships with content providers (Digital TV Europe, 2010). After doinga review of various solutions in the domain that exists today, almost all of them includesome dedicated hardware that goes along with application software (Sling Media, 2010;Video Streamer; Place-Shifter; Mobile TV, 2010; TV2MEw, 2010; SonyStyle USA, 2010;Orb, 2010). Company X’s proposed solution will focus on software creation for variousmobile platforms while trying to minimize the target hardware-related cost. A companyhaving experience in streaming software applications will have an advantage over othercompanies. Profit margins will vary depending on the investment and decisions todevelop technology in-house or, acquire existing technology.

Clients considered here are medium to large-sized companies for its business.Companies with revenue over $250M and more than 5,000 employees qualify as largebusinesses. Medium businesses can have anywhere from a few hundred employees to acouple of thousands.

Product overviewThe digital revolution has reached the home front, primarily with the introduction of theinternet and its associated technologies. The internet was originally designed to act as amechanism to exchange electronic data. This has begun a worldwide demand for accessto computing and communications from anyplace at anytime (Internet Trends,Morgan Stanley, 2010).

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Company X product will be a “place-shifting” solution which enables to user not tobe restricted by location for certain content, similar to what “time-shifting” had donefor scheduling. With special interconnecting cables and networking adjustments onecan watch TV or TiVo, or DVD player from just about anywhere (ArsTechnica, 2010a)one can get a network connection – be it at office, in a hotel room, or the other side ofthe planet. Company X targets to transform any internet connected/enabled laptop,PC, PDA or cell phone to a personal media device. Company X proposes to start outwith a stand-alone product – a combination of hardware and software solution, tryingto leverage as much as possible from existing solutions (Figure 1).

The customers pay a one-time device cost and install the Company X compatiblehardware device at home. The Company X hardware at home can connect to anycomponent, storing or streaming media content. The Company X software is aclient-installation required for the mobile devices which will act as receivers for thedata. The onus is completely on the customers to ensure legal streaming of data.

Product introductionThe Company X box converts analog signals to digital signal (if needed) (Fcc.gov,2010a), converts those into IP packets (BroadbandSuitee, 2008) and sends securely overinternet to the authorized device. The analog signal can be the analog TV signal or,FM radio signals. The hardware-encoding device does the encryption and compression(Russell, 2008) of the content before sending it over the internet. The compression is donewith connection speed consideration to deliver high quality streaming. Industrystandard encryption is done to meet minimum security requirements.

Company X software gets installed on the mobile device such as a laptop, PDA orcell phone. The user can login to the home network remotely using secureauthentication and stream content from TV or other digital storage device.

Some of the product features of Company X include:. Remote access to digital (streaming) data on cell phone, laptop, PDA, remote PC,

IP TV.. Wireless-enabled Company X hardware.. Multicast feature support (simultaneous remote and local viewing).. Multiple source, multiple user support.. Peer-to-peer sharing.. Pause, rewind, fast forward controls.. Record and burn to DVD.

Figure 1.Company X solution

overview

Internet

Contentsubscription

Data in PC ABM HW"streaming

server"

ABM SW"client/receiver"

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Product descriptionThe following devices can be connected to Company X hardware box at home using acable for the input signal – TV or IPTV, Home PC, DVR, DVD player, satellite radioreceiver. The Company X box can also connect to any wireless enabled device at homesuch as a laptop, PDA or, cell phone.

Company X is introduced with the unicast feature where at any point of time, only asingle remote device can be connected to access the content. In the future products,multicasting will be supported where multiple remote devices can connect and accessthe same content. However, it will be done only with content provider’s consentand with taking care of digital distribution rights. The idea is somewhat similar to thatof the pay-per-view service. In case of multicasting, the appropriate content providerwill be notified for billing purposes. Peer-to-peer connection support will help sharingof the content between customers owning Company X box as long as the legalities aremet (Russell, 2008).

Company X solution alternatives are the following.Software-only solution

. Supports TV, PC, mobile device (laptop/cell phone/PDA).

. Needs a PC at home and a TV tuner card.

. Company X server software on PC and client software on mobile devices.

Hardware/software solution. Supports TV, mobile device (laptop/cell phone/PDA).. Company X compatible hardware connected to TV and other home media

storage devices.. Company X client software on mobile devices.

Value propositionCompany X proposes a solution for consumers that want to have access to all digitalmedia at home even while they are traveling. The user who might have subscribed to alot of TV programs but is not able to access while outside of home. Company X makesit possible by providing a secure and unified access to contents stored on a personalcomputer, digital television and any other digital storage media devices.The attractiveness of the solution is that it envisions a single point of control for allaspects of a consumer’s digital home incorporating advanced wireless technology andprovides value to the customer at a very reasonable cost.

The competition in this market space is still not clearly defined. However, a host ofcompanies such as Sling Media (2010), Monsoon Multimedia (Video Streamer;Place-Shifter; Mobile TV, 2010), TV2Me (TV2MEw, 2010), etc. are already present inthis domain. Large players such as Sony (SonyStyle USA, 2010), Apple (Apple TV,2010), Microsoft (Windows Media Center, 2010), Intel (Intelw Viive Technology, 2006),etc. are also showing interest in this market space.

A gap analysis of the functionalities in the product against those currently presentin these competitive products. Figure 2 shows the data in a tabular form. The market isdivided into three segments, main street, techno-geek and media savvy, explained indetails later in the market segment section.

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Environment and policyOur literature search identified the major factors that influence the success of aproduct. The factors can be broadly divided into two categories, environment (DigitalMedia Content Creation Technology Roadmap, 2009; Hwang, 2005) and technology.Figure 3 shows how external environment will be affecting the development of theCompany X solution over the years. The section “A” in the figure shows the variousexternal factors that will affect the product releases (product type 1, product type 2,etc.) from Company X over the next few years. Section “B” shows the technologies thatCompany X depends on for providing the solution.

Content providersOwing to the stringent copyright policies for rebroadcast of contents, it is very importantto create tie-up with content providers and have streaming rights. The following contentproviders need to be considered for negotiation of content streaming rights:

. TV content broadcasters such as ABC (ABC.com, 2010).

. Cable TV provider such as Comcastw (Comcast Official Site, 2010).

Figure 2.Gap analyses for

competitive products

Competitiveadvantage

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MPA

NY

X

Slin

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Vul

kano

Orb

TV

2Me

Mar

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2011

2011

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Main

Radio All

Computer Media,tech

Mediastorage

Med,tech

Dat

a so

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Videophone

2013 Tech

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Wireless 2011 Tech

Home 2011Main,med

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Med,tech

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. Movie studios such as Disneyw (Disney, 2010).

. Internet content providers such as EROS entertainment (Eros Entertainment, 2010).

. Satellite radio such as SIRIUSw (SIRIUS Satellite Radio, 2010).

. Local FM radio channels.

Most of the TV programs get to customers’ home through cable. The cable providerssometimes just act as carriers and do not interfere with the content being distributed.However, the retransmission rights still need to be discussed with the source ownerssuch as broadcast TV channels and movie studies that provide the content for moviechannels. Cable TV providers control mostly the advertising and pay per view channelaccesses (Fcc.gov, 2010b).

Internet content providers allow their content to be viewed at home on PCs orIP-enabled TVs. Many of these content providers have special agreement with theinternet service providers to customer’s home. The streaming of such content throughthe home PC over internet to a mobile device might require consent from the contentproviders. If a user has subscribed to satellite radio service, he or she needs a signaldecoder/receiver to enjoy the content. However, this is not portable enough to be movedaround. With Company X, this receiver could be placed at home and remote access ofprograms can be supported. Company X’s technology will help convert the decodedsignals to IP packets and stream it. Again retransmission rights have to be acquiredfrom the satellite radio companies.

CompetitorsAlthough there are currently no players in the digital data streaming market in thePortland area, few companies are getting into this industry in other parts of the world:Slingbox (Web TV wire, 2010), HAVA/Vulkano (Video Streamer; Place-Shifter; MobileTV, 2010) and Sony LFX (SonyStyle USA, 2010). Slingbox solution is a combination ofhardware and software; however there is no built-in wireless support in it. Vulkano is acomparable product with built-in wireless networking support from Monsoon

Figure 3.Effect of environmenton product development

Market drivers

20102010

20132012

20112011

Product type 2

Product type 1

Product type 3Product type 4

Technologies

Compression

Security

Video mail service

Digital rights

Management

Wireless connection

Wired connection

Multicasting

Stream live video

Scenario I

Scenario II

Content provider

Competitor

Policy/regulation

Ecosystem/infrastructure

Environment

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multimedia and Sony’s location-free TV has added PSP compatibility in addition towireless networking support. TV2Me (TV2MEw, 2010) provides with exceptionalstreaming video quality on PC, large-screen TV, PDA or phone but it is very expensive.Further details are available at Sadoun.com (2010).

Government policyPolicies are what drive innovation, widespread adoption of a technology or productand encourage competition. Based on the nature of the local government’s role, fourcategories of actions can be distinguished (Gillet et al., 2004):

(1) government as broadband user;

(2) government as neutral rule-maker;

(3) government as financier; and

(4) government as infrastructure developer.

As stated in (Hwang, 2005):

Federal and state policymakers are exploring initiatives to promote the deployment andadoption of broadband services, and in recent years, an increasing number of localgovernments have joined them. While the first generation of narrowband dial-up access wasable to piggyback on the near universal availability of the mature telephone network,broadband relies on communications infrastructure that is both more heterogeneous and lessevenly distributed.

The same paper states regarding a 1999 telecommunications survey conducted by theInternational City/County Management Association that found 93 percent of localgovernments had a franchise agreement with a cable company, with a 12.2-yearaverage term length. A specific example of Portland, Oregon is mentioned whichattempted to force the cable providers to offer unrestricted access to the cable networkby unaffiliated Internet Service Providers (Gillet et al., 2004).

With no clarity in the state of legislation in the USA, the world of fair use makesway for a dodgy environment for digital content reuse scenarios. The conflict betweenHollywood and software developers over the creation of DVD backups is a goodexample to emphasize the issues associated with fair use rules (Wired.com, 2010).To add to the complication US Copyright Law makes it illegal to circumventencryption for any kind of use (ArsTechnica, 2010a). For place-shifting, the situation iseven more confusing because the ability to record contents and the basic portability ofcontent are supported by the digital devices by default (HomeTheater.about.com, 2010)and respected by the right holders. Recording and moving content online, however,upsets the content producers (ArsTechnica, 2010a).

The license requirement in the scenario of streaming music over the internet, fromone system to another, is still murky (IP Communications, 2010) and the situation seemssimilar in case of video. The digital content owner wants to draw extra/continuousrevenue from once legally purchased content by one user and how it is shared ordistributed later (Intellectual Property Watch, 2010).

It is clear that broadcasters are not doing enough to reach to their customers. Theexisting gaps are filled by products like Slingbox and when content providers realizethat someone else is exploiting the gap, they also want a share of the pie (ArsTechnica,2010b). It seems time-shifting has come of age as the practice been upheld by the courts,

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and TiVo like devices have become widespread. Place-shifting needs a similarlegislation in place and should help protect consumer rights while not constrictinginnovation (ArsTechnica, 2010a).

EcosystemThe ecosystem involved with the Company X’s product is wide and varied. Figure 1show how the product fits into the complete picture of content delivery. The differentplayers involved are the following:

. cable TV content providers;

. cellular service providers;

. internet service providers; and

. government agencies and policy makers.

As stated earlier broadcasters want to make money from certain kind ofcontent “place-shifted” by entities like Slingmedia. The independent operation ofcontent providers and “place-shifters” is having is having a negative effect on contentproviders’ business models (ArsTechnica, 2010b).

Company X, on the other hand, suggests creating a new business model where allthese stakeholders are involved and play a role. The future of this industry might needcollaboration between the content providers, government and the innovating companies.

ScenariosSome of the scenarios for Company X to take into consideration are as follows:

Scenario 1. Content providers object to Company X’s feature for multicasting.Multicasting would mean multiple users being able to access content. This would in

turn result in content providers modifying their policy of one-user per connection. Thereneeds to be a way in which billing for each additional viewer or channel needs to be devised.

Scenario 2. Cable TV company provides Company X box’s functionalities in its ownsetup box.

This means Company X will work with cable TV companies to make sure that theecosystem for Company X solution is standardized and focus completely on itssoftware solution.

Market analysisAs seen in the research, there is a huge potential in this market that is still untapped.The streaming media market is still in an introductory phase. And there is a growingneed for this technology. The streaming media market revenue is projected to hit$6 billion by 2011, up from $915 million in 2005 (Insight Research, 2010). Major mediadistribution solutions existing today are PC based (upcoming devices like mobilephones are yet to work seamlessly with existing TV and other devices). However, theconsumer electronics-based solution, which Company X offers, is expected to enhancethe PC media server-based systems in the next few years.

Market segment overviewThe markets for the streaming media are segmented into three classes for simplicity,namely, “main street”, “media savvy” and “techno-geek” as shown in Figure 4.

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These signify the mass market, the sophisticated market, and the experimental market.Although media savvy present the biggest market size and high potential growth rate,the segment attractiveness analysis shows that the preference of main street andtechno-geek also matches Company X’s capability, potential and focus. This findingprovides a direction for Company X’s future product strategy development and marketdriver planning. By focusing on techno-geek, Company X can also monitor theevolution of the streaming media industry and better react to the trend shift.

Main street. The “main street” group love their TV, movies, and music but are notconcerned about where they come from. This consumer group is made of people whoare not technology enthusiasts. They are typically more than 35 years old, workingmen and women, who have low computer literacy. They use electronic equipment suchas audio-video systems, computers, electronic security systems, personal organizers,cell phones, etc. – but they have very little understanding of the technology behindthese products. Though these consumers are price-sensitive, their buying decision isnot completely influenced by price of the product.

This group’s need for Company X solution can be attributed to their heavydependence on the very simple use of complex technologies. They want to access theirTV programs while at a friend or neighbor’s place. These people seem to naturally fitin the profile of the “late majority” in the “Technology adoption life cycle” (Moore andMcKenna, 2002). They like to buy proven, bundled, pre-assembled packages, whichthey can start using with minimum setups. Quality and post-sale service and support isa major factor in this group’s buying decisions. This group is very sensitive to pastexperiences and will not soon forget an unpleasant experience with a particular brand.This will influence future purchase decisions. This segment inherently resists newtechnology products. Nevertheless, this segment has a huge potential when theproposed product becomes popular in the mainstream market.

Media savvy. The “media savvy” group is very knowledgeable about the latest mediacontents coming to the marketplace and always wants to be at the forefront. This groupof people is mostly traveling and would like to not have to carry their data around withthem. They would like seamless access to all digital content at home as well astheir favorite subscribed TV programs while they are away from home.

Figure 4.Market segment overview

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This segment is comprised of consumers who share some of the “techno-geek” users’ability to relate to technology, but ultimately they are driven by the strong sense of thepractical applications of the product (the ability of that product to achieve a high level ofsatisfaction) and how they are perceived by their friends (These people do not want to feel“left behind”. The status of having new and proven technology gives them the feeling of asmart consumer who is able to make good choices and get the most out of a purchase).They do have a strong interest in incorporating technology in their lifestyle. They havebasic knowledge of technology components and their uses, and they are willing toexperiment to a certain degree, but are unwilling to adopt them until they have beenvalidated by the market (i.e. they are not the first movers, but may be willing to adoptearlier than the mainstream market). They are interested in developing their knowledgewhere it can help them become more efficient. Products that leverage the existing proventechnologies (such as wireless, internet, etc) could easily interest this group.

Techno-geeks. The “techno-geeks” are fascinated with new technologies and keepupdated with new equipment as it becomes available. They love the concept of beingable to access their data on a single device and on-the-go. This group naturally fits intothe “Innovator” or “Early adopter” segment in the “Technology adoption life cycle”.Their advanced knowledge of technology gadgets tempts them to want only thenewest devices, with plenty of options, all the time. They would make an excellentsegment for planning the “beachhead” – mainly due to the fact that technology is partof their lifestyle. They can be labeled “do-it-yourself” group, since they generallyrequire minimal installation services or product support.

This group’s non-stop pursuit to use the newest devices available in the marketleads us to believe that this group will be an ideal segment to start with. This segmentlooks for other key factors such as “multi-use” capabilities and flexibilities, ability forafter-market customization, etc. Another key factor for this group would be the “socialimplication” – the thrill of owning the latest technology. They are more concerned withhow the new device helps them personally rather than how it affects their friends’perception of them. The small size of this segment is a cause for concern – it may bedifficult to sustain growth catering just to this group.

Segment attractiveness factor analysisAfter identifying three candidate segments, the second step of the analysis is to selectsegment attractiveness factors and use these factors to evaluate the attractiveness ofeach segment. The requirement for these factors is that they must be connected to thecharacteristics of the product and relevant to CVDs for media controller (Lazarevskiand Dolnicar, 2009). Table I captures this data.

Customer value driversThe second type of the attractiveness factor is CVDs. CVD are “decision-relatedattributes that are perceived by the customer to be the most important” to the productchoice process (Harmon and Laird, 1997). The preference of each segment on thesefactors will influence the level of attractiveness for Company X. The preference of eachsegment is presented in Table II.

Figure 5 shows the plot of the value attractiveness curve for each of the customersegment on a scale of 1-10. Data were collected after identifying customers in each

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segment and asking them to rate each CVD factor. Other factors such as product lifecycle and segment size will also influence the attractiveness.

Market driversFrom the data and analysis in the previous sections, Company X derived the majordrivers for this emerging market. A rapid growth in laptop and mobile phone penetrationover the past few years has brought an increase in the number of mobile internet users(SMART, 2010). With broadband access being available to a greater segment of thepopulation, people are beginning to realize the potential of high bandwidth. Increasedconnectivity has brought users to a point where they have become used to stayingconnected anywhere at all times to almost everything. Content on demand has becomethe theme of the present times. And statistics show that people are willing to pay for thecontent as well (Bain & Company, 2009). With ever increasing growth of digitalsubscriptions such as cable TV, satellite TV, etc. people do not want to miss out for theirfavorite programs only because they are not at home to watch those. For users, it is legalentertainment for which they have paid a price, why get restricted to stay at home toenjoy it? There is a segment of the customers who are driving newer applications such asvideo services, online gaming, mobile gaming, etc. And with consumers’ desire for aone-stop solution, Company X like solutions should be ready to fill the gap.

Competitor analysisIndustry structure strongly influences in determining the competitive rule of the gameas well as the strategies potentially available to the firm. Companies have uniquestrength and weakness in dealing with industry structure. Therefore, understandingindustry structure should be performed first for the net assessment. Porter (1996)suggested five competitive factors whose forces jointly determine the intensity ofindustry competition and profitability. The strongest force or forces are governing andbecoming crucial from the point of view of strategy formulation. Figure 6 shows thecompetitor analysis done for players like Company X in the current market.

Features Advantages Benefits

Techno-geek Streaming dataaccessibility throughultra-mobile device usinghigh BW wirelessconnection.PDA, cell phones, IPenabled mobile media dev

Watch streaming mediaanywhere obtainedthrough subscription onlyaccessible at home todayShare the latest cool s/w.game installed at homePC

Do not have to store andcarry content along whileon the move

Main street Accessibility of subscribedprograms away from home(friend/neighbour)IPTV

Watch the cable subscribedlive/stored program at afriend/neighbors place

Do not have to miss aprogram while visitingneighborhood

Mobile savvy Streaming dataaccessibility through highBW connection on a deviceaway from home.Remote PC, laptop

Seamlessly access digitaldata on PC and cable TVstorage

Do not have to worry aboutforgetting to carry somedata or video contentstored at home while awayfrom from

Table I.Preference of each

segment on productfeature, analysis,

benefit factors

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Threat of entry. The entry barrier of this industry is medium. “Economics of scale” ofthis industry provide opposition by forcing the entrant. Providing a software solutiondoes not need a huge capital investment when compared hardware-based solution.However, access to distribution channels is a barrier to the company since it needs tosecure distribution of its products.

Threat of rivalry. Although there are already existing players for streamingTV content over internet, there are very few in the Portland area currently. This beinga relatively new market, the products and services are new in the industry. And theybelong to entry stage of the product life cycle. Different companies have differentproduct strategies. And these diverse strategies of competitors prevent them fromreading each other’s intentions accurately and agreeing on a set of rules of the game

FactorsMain street (40s, ownsmall business)

Media savvy (mid 30,mobile professional)

Techno-geeks (mid 20,college student)

EconomicCost of ownership Would not buy products

which need lots money tomaintain

Concern more on productperformance than cost

Not a big concern, butshould have highquality

Degree of budget fit Must fit their budget Somewhat important Not a big concernPerformanceFaster/easierinstallation andmaintenance

Need products which areeasy to install

Prefer easy to installproducts

A plus in comparisonto competitors

Feature set Less likely to need bestfeature set

Prefer the best feature set Very important to thisgroup

SupplierResourcecredibility,reputation

Conservative buyers.Only buy from familiarcompanies

They would considerreputation more or less

Reputation forinnovation isimportant, but willingto take risks

Innovative problemsolver

They focus more onquality

Need innovation solutionsfor their mobile system

An importantmotivation forpurchase

MotivationRecognition, wantto be the firstadopter to theproduct

Prefer to buy matureproduct with quality andreliability. Not important

They do not care being thefirst adaptor so much

Always wants to bethe first adopter

Desire to be viewedas a problem solver

They will like to beviewed as a problemsolver

Want to buy a product ofthe company which cansolve various situations

Not a huge factor in thebuying decision

Self image – brandimage

Not connect their selfimage with that

Sensitive to the brandimage

Not as important tothis segment

SituationBuyer’s taskrequirement

They do not have muchtask requirement

Want to make their mobilelive easier

This would besomewhat important

Organizational/social influences

Word of mouth may affect They would consider whatother suggested

Affected by theirimmediate peer group

Buyer’s experiencewith relatedproducts

Experience has no or littleinfluence

Experience with streamingmedia may affect

Most have hadprevious experience

Table II.Customer value driversfor each segment

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for the industry. Some are software-based solution only while some are a combinationof hardware and software.

There are a few competing products and they do not meet the needs of thecustomers completely in terms of cost, performance and feature set.

Figure 5.Value attractiveness curve

10

9

8Media savvy

Techno-geek

7

6

5

4

3

2

ContentsProduct focus

Main street

Function and mobility

Easler

insta

ll

mainten

ance

Ease o

f lea

rning

Acces

sibili

ty of

subs

cribe

d

prog

ram

Experi

ence

with

relat

ed

prod

ucts

Unders

tand c

ustom

er

Ability

to m

eet s

pecif

ic

need

s

Functi

ons

Mob

ility

Remote

PC, la

ptop

Have u

nique

need

s mee

t

Desire

as a

prob

lem so

lver

Inno

vativ

e solu

tion

Stream

ing da

ta ac

cessi

bility

Figure 6.Porter’s five forces

analysis

Threat of entry(medium)

Threat of rivalry(low)

Threat of buyer(low)

Threat of supplier(high)

Threat of substitute(medium)

Potential companies

Sling boxOrb communicationsTivo to goSage tvAir tvHava• No competitor in the market

• Moving to alternative suppliers

• Cable tv companies• Internet service

• Economics of scale• Product differentiation• Capital requirement

• Stroge devices• Limitation on quality and content• Cost is high, sometimes

Digital contentdistribution

inpacific NW

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Threat of substitute. The threat of substitute in this industry is medium. The alternativefor consumers is to use data storage devices such as digital video recorder or TiVo for theirTV programs. Media-savvy users will alternately carry their data around when they aretraveling. There is limitation on quality of content; the cost too is high at times.

Threat of supplier. The suppliers, which are content providers and internet serviceproviders in this case, have high power in this market because Company X needs toestablish tie-ups with each of them. Suppliers form a part of Company X’s ecosystem.Product specification and inter-working with other components is very essential toprovide the consumers with a high-quality solution and reliability.

There is also a scenario where the content providers host their own content andenable streaming through internet.

Threat of buyer. The threat of buyers is low in this case. The buyers cannot play onecompany over another because products and services are not available yet in thePortland metro area market. The switching cost of the solution, once a customer sets itup at home, is relatively high. Also, customers might be relatively less sensitive to theprice since quality of the product in this industry is important for the consumers.

Product and technology analysisProduct specificationEfforts and investments can be made to make Company X hardware not bulky andeasy to set-up but customers usually avoid having another piece of hardware in theirliving room. Company X must also offer software-only solution for customers having aPC and TV tuner card. The advantage of having a hardware system is better securityand quality streaming (Bar-El, 2002). Software solutions have the advantage of theability to be updated more frequently and can update the customer with additionalfeatures sooner than a complete hardware solution. Hence a combined hardware andsoftware solution is best placed to serve the customers.

The TV tuner card connects the TV to the PC and the Company X software installedon the PC does the compression, encryption and streaming. The software-only solutionmay have limitations compared to hardware-based solutions. An example productspecification for Company X can be as follows:

Full product specifications

General

Width – 11 inch approx, depth – 4 inch approx.

Height – 2 inch approx., weight – 1.5 lbs approx.

TV tuner

TV tuner quantity – 1, TV tuner reception system – NTSC/PAL.

Audio system

Audio: output mode – Stereo.

Connectors

Connector type 1 – composite video/audio input RCA phono £ 3 installedrear, 1 S-video input 4 pin mini-DIN installed rear, 1 RF input RCA phono £ 3installed rear, 1 composite video/audio output 4 pin mini-DIN installed rear,1 S-video output RJ-45 installed rear, 1 network RCA phono £ 2 installed rear,1 Audio line-in RCA phono £ 2 installed, 1 audio line-out.

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Coaxial digital input

Yes

Accessories

Power adapter, network cable

Power

External

Shipping dimensions

Packaged quantity – 1

Technology assessmentCompany X incorporates a number of technical features to provide users with a singleinterface on their mobile devices to connect and enjoy the media and content at home asshown in Figure 7.

One of the major technologies Company X capitalizes on is wireless technology.The introduction of Wi-Fi technology and access hotspots is just the beginning of theapplication of this technology. These hotspots provide internet connections to userswithin a limited range from an access point. Although this technique extends the reachof the internet, it still limits the movement of the user to within a short distance from afixed location. Most users would like to have mobile access to their broadband internetconnection over much greater distances. The demand for this mobility has continued toforce the transformation of the communications industry. The Wi-Fi standard applies toisolated areas of connectivity, while WiMax and 3G/4G (WiMAX FAQ, 2010) are usedfor longer distance wireless connections. WiMax has been used primarily for computingplatforms and 3G/4G works best with mobile devices such as mobile phones. Ultra-wideband (UWB) has a very short range and is used in the home entertainment environment(UWB Technology, 2010). Table III lists each of the technologies and its associatedproperties.

Figure 7.Technology in Company

X’s usage model

Internet

Contentsubscription

Data in PC ABM HW"streaming

server"

ABM SW"client/receiver"

Data decodingDecompression

Jitter removalError correctionDNS service

Digital right managementSecurity management

Uncontrollableenvironment

MultiWeb serverCompressionData encoding

Technologies

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Wi-Fi is short for wireless fidelity. It was the earliest and is the most common the mostcommon form of high-speed wireless data technology to be applied in the home andoffice. Wi-Fi has also become the major player in the deployment of “hotspot” wirelessconnectivity in commercial outlets such as colleges, cafes, hotels, and airports. The rangeof Wi-Fi is limited, however, and the user must be located within 300 feet of the accesspoint. Wi-Fi equipment is now commonly available and many of the latest platforms cansupport multiple Wi-Fi standards for compatibility with several wireless networks.

WiMAX is the latest technology to emerge that will give users broadband accesscovering a larger geographic area. The goal is to be able to provide the same access asWi-Fi does today over a much larger distance. WiMAX can cover anywhere from oneto five miles depending on a number of variables such as the area terrain. WiMAX willgive users increased mobility for high-speed data networks and has the capability ofcovering entire campuses and business parks.

Table IV lists the different technologies and standards applicable to Company Xand their projected time of availability.

Technology acquisition optionsIn order to survive a competitive broadband market, companies rely on strategies oftechnology acquisition, internal technology sources, or a combination of internal andexternal technology sources. When deciding whether or not to choose a particularstrategy, managers or consultants closely study the various types of technologyacquisitions from multiple perspectives (Linstone, 1999). Buying technology can be aviable strategy for incumbent market leaders threatened by disruptive technologies.In this section, we will discuss the options in acquiring emerging technology, and theimplications of adopting each option are assessed.

Acquisition. Emerging technology trends can be treats or opportunities, dependingon whether companies are incorporated them successfully with their overall strategicdirections. Since patented technology cannot be duplicated, the faster way to acquirethe technology needed is to pay a premium. Obviously, managers realize that it is toolate to invest heavily to develop their own technology solution. This is a justification tomaintain the market share (McGrath, 2001). Cisco and Microsoft are the excellentexamples of two companies that applied successfully applied technology acquisitionstrategy. To accomplish the vision of end-to-end solutions both companies preferred

Technology IEEE standard Throughput Range Frequency

UWB 802.15.4 110-480 Mbps Up to 30 feet 7.5 GhzWi-Fi 802.11a Up to 54 Mbps Up to 300 feet 5 Ghz

802.11b Up to 11 Mbps Up to 300 feet 2.4 Ghz802.11 g Up to 54 Mbps Up to 300 feet 2.4 Ghz

WiMax 802.16d Up to 75 Mbps 4-6 miles ,11 Ghz802.16e Up to 30 Mbps 1-3 miles 2-6 Ghz

WCDMA/UM 3G Up to 2 Mbps 1-5 miles 1,800, 1,900,2,100 Mhz

CDMA2000 3G Up to 2.4 Mbps 1-5 miles 400, 800, 900,1,700, 1,800,1,900,2,100 Mhz

Table III.Wireless standardsdefined

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acquisition than internal development (Knowledge@Wharton, 2005). An importantconsideration of the acquisition strategy in assessing the benefits of acquiredtechnology is cost. Cost is the critical part of the strategy decision when the potentialvalue of acquiring a disruptive technology can be accurately estimated. The key issueis to consider all costs of the technology acquisition: up-front cost, installation,adoption, and training (McGrath, 2001).

License agreement. License agreement is the option that reduces the need to acquirecompanies with disruptive technologies. Instead of purchasing emerging technologies,licensing is a better way to access innovation. The main factor of making this decision isthe lack of the capital to acquire the technology. AT&T was the pioneer of offeringlicense agreements in the telephony market. In 1904, 6,000 companies were Bell licensees(Austin and Bradley, 2005). When a new technology is on market, organization simplyreplaces the obsolete technology with innovative solution. Convenient, inexpensivelicensing cut the cost of acquiring emerging technologies. Another factor of making thisdecision is the risk associated to rapidly changing technology and industry standards.The disruptive technology becomes obsolete in five years or less (Betz, 2003).What functionality will customers need five years from now? In a high technologybusiness an incumbent company cannot succeed forever having to sustain for an

Features Technologies/standards Performance measures Year

Wireless connection Wi-Fi Standard IEEE802.11a/b/g/n, 3G 1-11 Mbps 2009Super 3G 20 Mbps 2009Wi-MAX (IEEE 802.16) 75 Mbps 20094G Over 100 Mbps 2010

Wired connection Ethernet (802.3i, 802.3u) 100 Mbps 2009Multicasting IP v6 Multicasting Compliance to RFC 1458,

35502009

Stream live video CEA *-708-B, digital television (DTV) closedcaptioning

Support all types ofcaptioning(roll-up, pop-on, paint-on)

2009

ATSC Standard A/53E. Digital televisionstandard

Sequence headerconstraints *

Compression formatconstraints *

Sequence extensionconstraints *

Picture codingconstraints *

2009

Compression MPEG-2, MPEG-4, DivX, XviD, WMV,WAV

Compliance * 2009

MPEG-7 Compliance * 2009MPEG-21 Compliance * 2010

Security Virtual private network 128-bit encryption 2009Video mail service H263, H261 compliance 2011Digital rightsmanagement

WMDRM – 2009

IBM’s xCP (for home networks)Sony’s OpenMagicGate (OMG)

– 2011

Note: *Evolving standards. Compliance to the released version of the standard at the specified date

Table IV.Technologies and

time of availability

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ever-increasing disadvantage of stagnant, obsolete or less competitive technologies.With expensive, state-of-the-art technology, licensing is often the most logicalacquisition strategy that helps preserve cash flow because the organization does nothave to spend large sums to acquire the emerging company. On the other hand, licensinghas a serious disadvantage for the supplier of technology. The problem with licensingconsists of reverse engineering. Innovation bears the burden of the copyrightlimitations. Organizations in countries without Intellectual Property laws can produceclones of the innovations without having to pay the royalties. Global legal initiativesmust be taken to address this problem that can show down the acquisition of additionalnew broadband technologies.

Joint venture. The third option for technology acquisition is to establish joint venturewith industry research leaders. Establishing an in-house capability for developingemerging technologies will require more capital that joint venture. In a joint venture, thefirst milestone of the companies is to consolidate their resources. This optionrequires investment in R&D to develop a new platform targeting a new market. Anadditional advantage of a joint venture consists of the sustaining access to innovations.Consequently, the broadband players seek out features and performance to broadentheir products and technology portfolios to better serve their customers (Betz, 2003).However, the strategy of joint venture is generally less successful. A typical example ofthis scenario is the joint venture of Intel & HP in the early 1990s. Intel and HP broughtItanium, a 64-bit microprocessor, on the market too late and less performance thaninitially claimed. To shed some light on this failed joint venture, McGrath (2001) offeredthe following reasons:

. difficult for both partners to share a common interest;

. cultural differences;

. different decision making styles;

. different attitudes on investment;

. different working practices and compensation; and

. different product development processes.

There are three options for acquiring a new technology: acquisition of the emergingcompany, license agreements, and joint venture. The company must identify a list of itspros and cons of each option of technology acquisition. The sum of the benefits minuscosts over the life of the technology will show which option has the best potential forsustaining in the competitive broadband market.

RoadmappingEnvironmental layerThe business of Company X will be affected by a mix of external agents. This includesthe policies regarding content protection and digital rights management, governmentpolicies which affect the pace of broadband deployment and technological or deviceinnovation, alliances between Company X and cellular technology providers, localcontent provider’s regulations and the digital content provider’s copyrightand redistribution policies. Over the span of next five years, some of these issuesneed to be addressed to or modified in order for place-shifting solutions like CompanyX to continue to be in demand and in use (Figure 8).

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Market layerCompany X evaluated the different market drivers for the industry during the timeperiod 2000 through 2010. The increasing broadband access acted as a major drivingforce which gave rise to subsequent customer demands and needs.

We categorized the market drivers into general and market segment specific.Growing customer need for broadband access is a general driver applicable for allconsumers. The VoD figures along with IP video offering forecast gives an idea of theincreased digital content subscription and thus customer’s wish not to miss any ofthese subscribed programs. Increased mobile device usage over time is also considereda generic market driver for the industry (Iyer and Scherf, 2006).

Looking at market segment specific drivers, techno-geek and media savvy are morelikely to have a need to remotely access their digital data when away from home. Themajor driving factor for the main street for choosing Company X solution would be tohave remote access to digital TV content. However, looking into the future, we see themain-street segment merging with the techno-geek and media savvy as far as the needto access digital data remotely is concerned. In a few years time, today’s main street isprobably going to become the media-savvy person. We also visualize a disappearingmarket driver of today – the need to support FM local radio. Satellite radio isadvertisement free and few years down the lane, people will prefer that over the FMradio. All of this data is captured as market drivers against timelines in Figure 9.

Product layerAfter identifying the market drivers for Company X’s different customer segments,we phased out the product development over the next five years. The first release of theproduct, UV 1.0, is planned towards the end of the first quarter of 2011. Table Vsummarizes the various product releases of Company X and the features associated

Figure 8.Example roadmap

of Company X

2010 2011 2012 2013

IPTV s/w

Multicast s/wDRM handling

Mobile GUI s/wWiFi WiMAX

Satellite radio signal converterServer software

Analog-to-digital converter

Sreaming serverCompressionEncryption

Licensing

Licensing

Joint venture

Acquisitionstrategy

Buying

Joint venture

Resource

Buying

HighMedium

To develop

Technology

Available

Standardized

UV4.0

Product

GeneralMarket driver

Environment

Cable tv alliance

Cellular technology allianceContent redistribution

Content protectionDigital rights management

Broadband accessIncreased digital content subscription

Increased mobile device penetrationIntegrated platformSatellite HD radio

FM local radioRemote access to digital data

Remote access to digital tv contentRemote access to digital data

Techno geekmedia savvyMain street

UV3.0UV2.0

UV1.1

UV1.0

Low

Video phone s/w

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with each. UV 1.1 is scheduled for release before the holiday season and the subsequentreleases UV 2.0, 3.0 and 4.0 are planned for back-to-school time releases (Figure 10).

Technology layerFigure 11 shows some of the technologies which are essential for the success ofCompany X products. Some of the technologies are standardized solutions while someneed to be either developed in-house or acquired.

Linking the roadmap to a business strategyOne of the critical benefits of the roadmap is that it can provide deep understanding onvarious perspectives surrounding their business and help to catch a new opportunity.The roadmap developed here provides an overview of the wireless streaming industry.Figure 11 presents an example of application to business strategy. From the ecosystem,two scenarios had been suggested. Based on each scenario, a company has twobusiness options. One is to develop their own brand and sell them in the market whilethe other option is to sell their product as a component for a set-up box provided by acable company. As shown in resource lay, those options require different resources andthereby different set of technology acquisition strategies.

ConclusionRoadmapping is shown to be a comprehensive tool providing overall businessstrategy. Technology and market forecast are critical for creating as accurate aroadmap as possible. Understanding of environment and thereby ecosystem helpsdraw a better picture of the future. Companies like Company X wishing to build abusiness based on innovation need to understand the market need and match themwith the mix of available technology. Creating and maintaining an accurate technologyroadmap will help the company reach its strategic objectives in the long term incontrast with hasty tactical efforts carried out with short-term goals in the broadbandmarket. The success of Company X’s broadband business strategy depends on theunderstanding of the current regulations and the possible impact of future laws relatedto digital content.

In addition, this paper demonstrated how any company can use the TRM andaccomplish both external and internal benchmarking. Specifically, the graphicalrepresentations provide managers extreme insight into the competitive forces and letthem make decisions easier.

Figure 9.Market driversfor Company X

20122010

Increased digital content subscription

2000Marketdriver

Remote access to digital data

Broadband access

Remote access to digital tv content

Increased mobile device penetration

Satellite HD radioFM local radio

Integrated platform

GeneralTechno geekMedia savvy Remote access to digital data

Main street

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UV 1.0 UV 1.1 UV 2.0 UV 3.0 UV 4.0

Planned release August2011

December2011

June 2012 December 2012 June 2013

Major marketsegment target

Mainstreet

MediasavvyTechno-geek

MediasavvyTechno-geek

All All

Hardware UV box athome

H/wsupportfor Wi-Fi,WiMax

H/w supportfor satelliteradio

None None

Software Client s/w Clients/w,Servers/w

Client s/wServer s/w

Client s/wServer s/w

Client s/wServer s/w

Device supportedat home

TV, DVR,TiVo,radio

PC, TV,DVR,TiVo,radio

Satelliteradio, PC,TV, DVR,TiVo, radio

Satellite radio, PC, TV,DVR, TiVo, radio

IPTV, videophone, satelliteradio, PC, TV,DVR, TiVo, radio

Client devicessupported

Laptop,desktop

Laptop,desktop

Cell phone,PDA,laptop,desktop

iPod, Zune, cell phone,PDA, laptop, desktop

Car TV, iPod,Zune, cell phone,PDA, laptop,desktop

Distinct features StreamTVcontent

StreamallcontentWirelesssupport

DatarecordingMore mobiledevicessupport

Software-only solutionMulticasting support

More homedevices support

Assumptions Mainstreet hasno PC athomeTVcontentviewing ismainmotive

Majority of peoplehave PC at home.(Main street mergeswith Techno-geek)Satellite radio ispopular than FMTV and satellite radiotuner card

IP TV penetrationis at least25 percent

Table V.Company X product

release schedule

Figure 10.Key technologies

for Company X

2010 20112000

TechnologySatellite radio signal converter

Encryption Compression

Analog-to-digital converterTo develop

Standardize

Available

Multicast s/w

Mobile GUI

Streaming server

Server software

DRM handling

WiFi

IPTV s/w

Video phone s/wWiMAX

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Corresponding authorTugrul U. Daim can be contacted at: [email protected]

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