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Wireless Audio A killer app for the Internet of Everything

Gary Brotman Director, Product Management, Qualcomm Connected Experiences, Inc.

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Mobile evolution drives toward an Internet of Everything Here today and accelerating rapidly

Sources: Machina Research, May ‘14, IDC Mar ’13; Gartner June ’14

25B permanently connected things by 2020*

Home Appliances

Security Cameras

PEV Speakers Lights

Smarter More connected

2x ~75%

~8B

Connected devices in North American households by 2020

1000x Anticipated data traffic growth driven by more connection and richer content

US 18-24 year olds reach for smartphone immediately after waking up

Cumulative smartphone shipments estimated 2014-2018

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Wireless audio leads the first wave of consumer IOE adoption

Wireless streaming offers a new spin on a familiar experience

Advanced use cases are readily understood even by naïve users

Users adopting handheld devices as general media control interfaces

Current trends align to make music the killer app for the connected home

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With major implications for audio services and business

Shift to on-demand whole-home listening − Streaming as main source

− Mobile as universal remote control

− Wireless as core audio paradigm

Transition from price premium to quality premium − Lower price seeds mass consumption

− High quality and differentiation win as category matures − From cheap earbuds to premium headphones

− From Bluetooth to Wi-Fi

$16B Category forecast for 2017 Connected consumer electronics for digital music

Sources: Parks Associates: All rights reserved, ABI Research November ‘13

37.2% CAGR 2013-2018 Wi-Fi/AirPlay portable speaker shipments worldwide

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Streaming is on track to dominate audio consumption

Source: Generator Research, Nov. ’13

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2013 2014 2015 2016 2017

Recorded Music Market: Worldwide USD, millions

Digital Subscriptions

Digital Downloads

Physical Formats

Digital projected to generate more revenue than physical formats by EOY 2015

3.5x growth 2013-2017

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Paid streaming is the fastest-growing category

Source: Generator Research, Nov. ’13

Unpaid/ad-supported leads on volume, but pace of paid subs is accelerating rapidly

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2013 2014 2015 2016 2017

Paid digital music subscriptions Worldwide. millions

2013-2017 3.5x growth in paid subs

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2013 2014 2015 2016 2017

Unpaid digital music subscriptions Worldwide. millions

2013-2017 2x growth in unpaid subs

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Convenience drives transition to streaming

Ease of acquisition Durability Portability Potential audio quality

LP • • • • Cassette • • • • CD • • • • Download • • • • Streaming • ∞ ∞ • (for now)

Streaming offers: − Easiest access to greatest breadth of music

− Greatest portability

− Greatest durability

− Fully legal listening

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Mobile accelerates paradigm shift from possession to access

Broadcast radio Lean-back

Personalized radio Mixed

Subscription libarary Lean-forward

iHeartRadio Pandora Spotify

TuneIn Wahwah Rhapsody

Access model: a massive buffet not subject to device storage limitations

From personal libraries to personalized listening experiences − Younger listeners establish identity through curation and sharing vs size of library

− On-demand access to effectively infinite, personalized jukebox/radio

− Full range of mass-market services catering to different levels of listener engagement

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Wireless audio controlled by handsets and tablets will drive new consumer use cases

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Streaming Music

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Like streaming from multiple sources to multiple audio devices at the same time

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Streaming Music

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Or streaming from one audio source to multiple audio devices at once

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Streaming Music

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Including streaming a cloud source to multiple smart audio devices in synch

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Streaming Music Streaming URL

• Act/art fictitious

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However…

Partial Solutions OEMs lack true end to end turnkey home audio platform

Technical Hurdles ex: Wi-Fi, sound quality, and ease of use/network configuration

Underserved Would-be consumers lack for options at retail

Fragmented Competing standards and technologies

BRAND B

BRAND A

BRAND C

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Qualcomm® AllPlay™ Smart Media Platform The Solution…

Unified solution supports local media and cloud based streaming across OS platforms

An integrated hardware and software music streaming platform built on the AllJoyn™ framework

Turnkey smart audio module

Jukebox apps and SDKs

Native content app music

integration

Superior Wi-Fi connectivity & support, easy network configuration, and advanced audio streaming

Party Mode and Multi-zone High res audio

Qualcomm AllPlay is a product of Qualcomm Connected Experiences, Inc. AllJoyn is a collaborative open source project of the AllSeen Alliance.

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The hardware ecosystem is growing rapidly

Compatible audio equipment announced from

Easy-to-implement cross-platform SDK for native streaming content apps

Consistent button, UI and controls across all apps

Expands selection of content available to SAM-enabled devices

Promoted as free SDK for any streaming content app developer

Allows handset and tablet to leave the network without interrupting streams

Built on AllJoyn framework for IOE capability

AllPlay Click SDK

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AllPlay Click SDK (User Flow)

1 2 3 4

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AllPlay Click SDK (User Flow) continued

5 6 7 8

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Tremendous opportunity for developers

Source: Parks Associates: All rights reserved

Playing field is shifting − Increase perceived value of solutions

− Get access to the whole home

− Reach the users most willing to pay for streaming audio

Clear path to scale − No need to do individual deals with OEMs

− No need to license out your API

− Participate in expanded universe without sacrificing UX − Maintain revenue streams

− Maintain control of UI

2x Owners of connected music systems are almost twice as likely to pay for music streaming services

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Broad range of audio services announced

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AllJoyn software framework connects AllPlay to IOE

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IOE use case: Share metadata between devices

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NOW PLAYING: Artist: Wisteria Song: Go Lio

Simple, standardized interface for sending human-readable messages

Works across devices and OS

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“Laundry is ready!”

“Laundry is ready!”

Audio Service Framework for delivery and rendering of simple audio files

Seamlessly discover and connect with nearby compatible speakers and AllJoyn devices

“Front door!”

“Front door!”

IOE use case: Share notifications throughout the home

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1. Homeowner has a party

2. Plays music from whole home audio system powered by AllPlay

3. Color Lights in Kitchen and family room react and sync to music.

IOE use case: Music/Lighting sync

Download the AllPlay Click SDK from Qualcomm Developer Network

https://developer.qualcomm.com/allplay

What comes next

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For more information on Qualcomm, visit us at: www.qualcomm.com & www.qualcomm.com/blog

©2013-2014 Qualcomm Technologies, Inc. and/or its affiliated companies. All Rights Reserved.

Qualcomm is a trademark of Qualcomm Incorporated, registered in the United States and other countries, used with permission. Uplinq is a trademark of Qualcomm Incorporated, used with permission. AllPlay is a trademark of Qualcomm

Connected Experiences, Inc., registered in the United States and other countries, used with permission. Other products and brand names may be trademarks or registered trademarks of their respective owners.

References in this presentation to “Qualcomm” may mean Qualcomm Incorporated, Qualcomm Technologies, Inc., and/or

other subsidiaries or business units within the Qualcomm corporate structure, as applicable.

Qualcomm Incorporated includes Qualcomm’s licensing business, QTL, and the vast majority of its patent portfolio. Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, substantially all of Qualcomm’s engineering, research and development functions, and substantially all of its product and

services businesses, including its semiconductor business, QCT.

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