Business Aspects of the Internet of Things

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1 Business Aspects of the Internet of Things Seminar of advanced topics, FS 2009, Florian Michahelles (ed.) This report summarizes technical and business opportunities of the internet of things. All articles have been written by students participating in the Seminar of advanced topics in spring The Internet of Things has emerged both as vision of research and business practice. As the ownership of the term is not clearly defined, also a clear definition is missing. Clearly, ITU s report Internet of Things has provided great popularity to the Internet of Things. It explains it as the capability of items to share information about themselves. The main driver is RFID, but as technologies progresses various others, such as sensors, might become feasible soon. This is pretty much in line with EPCglobal and the Auto-ID Labs claiming to architect the internet of things. The focus here is on a world-wide infrastructure allowing to share itemlevel supply-chain data across companies for increased process efficiencies. Then, there is the IPSO alliance, backed by the major internet backbone technology providers, fostering the application of IPv6 to objects, and a number of other initiatives, also branded under the term web-of-things, running items and objects as web-servers and, as such, using web technologies to manage the expansion of the internet to the real-world. Eventhough a clear and commonly agreed definition of the Internet of Things does not exist, there is a huge variety of topics bound to this vision. It was the goal of this seminar which took place in Spring 2009 with 17 students with backgrounds ranging from business to computer science and environmental engineering, to shed some light on these topics. The seminar was organized in a conference style which meant, first, for each student to present one topic in a 15min talk in class and to manage a subsequent discussion both on business as well as technical terms. Second, each student was asked to compose one paper which then was peer-reviewed by three other students plus the instructor of the course. These proceedings present a selection of the most compelling papers of the course. The following articles cannot be regarded as scientific contributions, but they provide concise summaries of related work in the field and hopefully serve as helpful introductions to the Internet of Things for novices, practitioners and other student interested in this field. Thank you very much to all students visiting Business Aspexts of the Internet of Things in spring 2009 at ETH Zurich, details to be found here: Florian Michahelles Zurich, Switzerland, June 23, 2009

2 Table of Contents Business Aspects of the Internet of Things Seminar of advanced topics, FS 2009, Florian Michahelles Mobile as a Personal Computer 3 Anar Gasimov RFID for Track & Trace of Baggage in Airports 8 Stéphanie Nguyen Smart Home 13 Jingzhi Xu Input Techniques for Mobile Phones: keyboard, sensors, barcodes, RFID, HCI 19 Afet Musliji End User Programming in Internet of Things 23 Özge Kökçü User-Generated Content 28 Niroshan Balasubramaniam Monetization of Mobile platforms 34 Avinash Vankadaru Business Aspects of the Internet of Things: Mobile Marketing 39 Gilad Geron Why Mobile Payment still has some way to go in Switzerland 45 Stefan Wengi Persuasive Technology in Motivating Household Energy Conservation 52 Yi Bing Tan Roomba to Roomie: Robots are entering our homes and our lives 59 Zacharias Annu Promising Business Applications of Vehicular Communication Systems 66 Michael Steiner Things and Services 73 Sanjin Goglia

3 Mobile as a Personal Computer Anar Gasimov Swiss Institute of Technology Zurich Abstract Mobile phone has become indispensable in modern life. Its increasing popularity rises the question about what will be the place of mobile phone in the future. The trade-off between mobile phone s reduced capabilities (e.g. small screen, low processor power) and its unique advantages (e.g. geo-localization, user awareness) make this question more challenging to answer. In this paper we will see the different capabilities of mobile phones and analyze at which extent those capabilities can evolve and contribute to mobile phones future status as a personal computer. 1. Introduction Mobile has evolved from being merely used for voice calls and short messages to a ubiquitous platform used for social and commercial purposes [6]. The expansion of mobile web (3G, 3.5G), advances on mobile hardware (e.g. bigger screens, better processing power) and new services/tools facilitating mobile application development are the three main factors contributing to this trend. The definition of mobile can vary from one source to other. Some define it as mobile device to communicate and exchange data through mobile or wireless networks [1], others define it as battery operated digital device with computer-like capabilities [2]. In this article we will refer by mobile to pocket size PC which can be seen as a device combining mobile phone functions such as sending and receiving calls and messages with those of Personal Digital Assistant (PDA). There is a wide range of devices between a desktop PC and a mobile. Laptops, Notebooks, Netbooks, Deskbooks are all PCs of different sizes each adapted to special situations. Mobile can also be considered as a part of it, however, its unique capabilities such as user-closeness or location awareness, and its special business configuration (e.g. Mobile Network Operators, device manufactures) make it a full-fledged domain. Mobile can act as a PC at some extend, it can also become the primary computer device in coming years [1], but it is important to note that mobile and PC are not concurrent of each other. Turning mobile phones into PC's is not an achievable goal. Mobile phones are used in context, in mobile settings, and thus service specific needs (e.g. schedule, communication, navigation, location-based services etc.). In this regard, the main questions are: what are the main differences between a mobile and a PC and how mobile can be improved to be used instead of PC in many situations. Those main questions are analyzed from three aspects: hardware, software, and business logic. 2. Mobile versus PC a) Hardware Mobile device is composed of about 20 different components e.g. CPU, screen, Bluetooth, GPS receiver, SimCard slot, etc. The basic technology of those components are the same in all mobile models, but their interfaces and connection models change from one model to another. Each mobile model has its nonstandard shape, thus manufacturers have to adapt the components to fit in that shape. This embedded configuration of mobile offers some advantages and disadvantages compared to PC (Table 1). Let us consider each of the missing points of mobile hardware separately and see how they can be improved. Mobile Portability Special input capabilities: Near Field Communication, Audio, Photo/Video, Barcode, Tagging Built-in GPS Table1: Advantages of Mobile and PC PC Large screen Ergonomic keyboard Long battery life Processor power Standard protocols Bigger storage Battery Life Even physically smaller, mobile has relatively higher battery life than current notebook computers when it comes to basic mobile functionalities such as conversation and messaging. However, there is still room to improvements to allow mobile perform like a PC. 3

4 There are three ways of solving battery problem: making hardware which consumes less energy, improving the battery itself, and developing new facilities which make the battery charging easier. The first and the second suggestions have been exploited for many years. In other words, small improvements on that direction are constant but big changes are not frequent. The last suggestion is more interesting as there is a big improvement potential. Currently each mobile model has its own charger. This trend seems to change as a consortium of mobile manufacturers are agreed to make an ecological universal charger by 2012 [7]. Once the most of the mobiles use the same charger, those chargers can be installed in different places such as home, office, train station, bus, etc. Universal charger is also a first step for a universal docking station for mobile. Small screen The size of the screen is a subjective argument as it also determines the device s total size. Many mobile models are forcing this trade-off by using the total front panel of the device for the screen (iphone, HTC Diamond). In this regard, there is not an ideal screen size adapted for all usages. Watching a movie requires a very big screen, sending an can be done on a small screen, and all day office work needs a middle sized screen. In this context, an ideal screen should have a flexible size: small while carrying and big while using. It can be partially solved by beamers and docking stations (Figure 1, 3) as it is already the case for notebooks. Another solution is using foldable screens (Figure 2) even if it is still in early research stage. This solution can accommodate both bigger screen and small device issues. Input Mobile s small size makes it less comfortable for data Figure 1 Mobile Beamer Figure 2 Foldable screen Figure 3 Docking Station for mobile devices input. Extended keyboard solutions such as projected keyboards, Bluetooth keyboards are already available but not very popular among users. The main reason is while using a bigger keyboard the mobile device s screen is far from user and therefore unreadable. In this regard, external ergonomic keyboards have to be used with conjunction with a bigger screen. Docking stations is also the most suitable solution to provide external screen, keyboard and also mouse for mobile devices. Processor power There is a trade-off between processor power and the battery life. This problem is the same as for notebooks. Thus, there is not real solution as we would always want instantaneous/fast processing and unlimited battery life. Processor chip manufacturers besides increasing the processing power, optimize them to consume less battery power. The processing speed of some new mobile models have already reached the level of few year old notebooks (e.g. Toshiba TG01 with 1GHZ processing power). Standard protocols / extension The hardware of a PC has passed a long standardization period. Currently desktop PCs can be assembled with a minimal knowledge in computer science. Even small notebooks are composed of standard CPU, peripherals, input/output ports, etc. This standardization is more complicated for mobiles due to their small size and custom shapes. Each company and in most cases each mobile model has its own hardware specifications. The lack of standardization of mobile hardware is the green line which separates it from PC family. The improvements on this direction can start by putting on mobiles standard Figure 5 Mobile with USB port input/output ports such as USB. With a mobile having a USB port, any hardware can be plugged to mobile with the corresponding driver. Storage The storage difference between mobile and PC is fading as the cost of high capacity memory cards drop. Memory cards with 16, 32 GB capacity are now available for a low budget. Those capacities are more than enough to store and run a large set of applications. The demand for more space is generally for achieving purposes which can be done using other devices than the mobile (e.g. PC, external/network disk). Figure 4 Projected Infrared keyboard 4

5 b) Software Solving the hardware problems demands big effort from mobile device manufacturers and it is hard for small companies to contribute. In contrast, mobile software market is open and there is still much to do a in that area regarding the available technologies. Internet factor The latest revolution in mobile came with new mobile telephony communication protocols such as 3G. Larger bandwidth and a flat rate connection made mobile internet accessible to a larger population (Figure 7). It opened a new horizon for internet based applications (e.g. Limbo, Bedo, etc.). This step to forward has been determinant for mobile in its new role as a PC. There is a big probability that mobile will become the primary device to access the internet in the future [3]. Many utilities which were in the past required a notebook (e.g. , instant messaging, small amount payments) are now more suited for the mobile. User interface and input As the size of the mobile device cannot go bigger, the potential of improvement resides in the user interface design and the possibility of using other input methods than a keyboard. User interface is the key point to make people shift a part of their activities from PC to mobile. According to statistics (Figure 6) the IPhone market share has increased more than 500% in one year. It is a good example of how the user interface design can be crucial when choosing a mobile device. Figure 6 Smart phone market share Internet surfing is one of the most used PC-like activity of mobile. Mobile web users as PC web users prefers shorter surfing sessions over long ones [5]. Surfing time can be significantly shortened by innovative input methods. Nearly every mobile have a build-in audio and video input capabilities. They can be used as new generation input devices. With applications such as Shazam mobile user can record couple of seconds of a sound and the application will search for corresponding music title using the tone matching. Kooaba is another Figure 7 Mobile internet (pages downloaded), source Opera type of application which uses image input to find the corresponding information in the database. Those techniques are enhanced to other areas of image processing such as face recognition, optical character recognition, augmented reality, etc. Being able to recognize a Chinese text and automatically get information about what is written using the mobile phone is the dream of most tourists. The information on the screen can be also arranged in a way to let user access the desired functionality with minimal number of clicks [8]. Mobile OS Mobile Operating System market is globally shared by five systems which are Nokia Symbian, Apple iphone, Microsoft Windows Mobile, RIM, and Linux. In contrast with PC OS, mobile OS have many incompatibility issues between different versions and devices. This is due in part to custom hardware specifications of each mobile device. For example as the keyboard structure for each mobile device varies from one model to other, the underlying software which uses the keyboard becomes incompatible when changing the OS. New open mobile OSs such Android contributes to standardization by pushing the existing mobile OS companies (Symbian, iphone) to either be more open or to propose better standardized API. c) Business Aspects 5

6 The business configuration of mobile market is slightly different from PC. In the PC market the roles are shared between actors such as OS developers (Microsoft), microprocessor (Intel, AMD) and peripheral manufacturers (Logitech, Samsung, etc.) and internet service providers (Google, Yahoo). In contrast, in mobile market Mobile Network Operator s are have far more power than other actors. They decide which model with which capacities should or should not go to the market. In this configuration sometimes good solutions can be stopped if they are not interesting for MNOs. From statistics (Figure 8) we see that even if the mobile communication cost decreases, the average monthly bill is stable over years. In other words, MNOs have to make users pay for the infrastructure (satellite, antennas, etc.) one way or another. Emerging Mobile Virtual Network Operators are the first step to make the mobile market more liberal. MVNOs act in the same way as the MNOs exept that they do not own the underlying infrastructure. Another obstacle in this liberalization process is the SimCard. Currently SimCard is the black box controlled by MNOs. If a SimCard can be replaced by a software solution such as a username and password, the mobile will definitively be the most popular PC. tagging methods such as Microsoft Tag, internet and location based systems, mobile s evolution as a PC will contribute to the expansion of the internet of things. Imagine 2 billion people able to read any barcode/tag and instantly retrieve/proceed the contained/linked information. 3 Conclusions There will be certainly more mobile users than PC users in the future. This is mainly due to poor countries where people cannot afford to buy a mobile and a PC. Mobile devices will act more and more like PC. As the flat rate mobile internet becoming a standard, mobile will be the first device to access to internet. Mobile s future place as a PC will pass by hardware and software standardization starting by liberalization of mobile market. The first battle will be between the mobile and small size notebooks. We can already see that a part of activities which in the past were done in the notebooks are shifted to mobile (e.g. ). New generation of notebooks with as very small screen (e.g. 7 inch screen) including a SimCard slot are already on the market. From hardware point of view the biggest evolution should be the mobile docking station. It can either follow the same scenario of notebooks (each company with different solutions) or start directly with standardized solutions. And finally, each device has its area of predilection. For example, it was predicted that the new home cinema facilities will make people go less to cinemas but it has not affected much the cinema frequentations [4]. In this regard, mobile s future status as a PC will not change the configuration of current PC market. All the intermediate devices in between will continue their existence. References Figure 6 Average local monthly bill for mobile, source: CTIA Internet of Things Aspects Making mobile act like a PC means more internet connected computer in the future. Mobile can replace any other electronic device if the required hardware is present. For example, mobile has a camera, it is small, and it has an internet connection. Moreover, a mobile phone is cheaper than a good quality CCD barcode scanner. This will tremendously increase the number of internet connected readers. Coupled with new [1] Mobile Phones Will Become The Primary Personal Computing Devices. John J. Barton, Shumin Zhai, Steve B. Cousins. s.l. : IEEE Workshop on Mobile Computing Systems & Applications, [2] Exploring the Implications of M-Commerce for Markets and Marketing. Sridhar Balasubramanian, Robert A. Peterson, Sirkka L. Jarvenpaa. 4, s.l. : Journal of the Academy of Marketing Science, 2002, Vol

7 [3] The Future of the Internet III. Janna Quitney Anderson, Lee Rainie. s.l. Pew Internet & American Life Project, [4] Mediametrie, Media in Life. Study on Cinema frequentations in France Cinéma de Médiamétrie. s.l. : mediametrie.fr, 2007 [5] Mobile web surfing is the same as web surfing. Martin Halvey, Mark T. Keane, Barry Smyth. 3, New York : ACM, 2006, Vol. 49. [6] In-Stat. US Mobile Social Networking and the Millennial Generation. s.l. : In-Stat Mobile Consumer Service, Reed Elsevier, [7] BBC News. Universal charger for phones plan. [8] Robbins, D. C., Lee, B., and Fernandez, R TapGlance: designing a unified Smartphone interface. In Proceedings of the 7th ACM Conference on Designing interactive Systems (Cape Town, South Africa, February 25-27, 2008). DIS '08. ACM, New York, NY,

8 RFID for Track & Trace of Baggage in Airports Stéphanie Nguyen ETH Zürich Department of Management, Technology and Economics Abstract Contributing to the growing trend of the internet of things, RFID has been replacing barcodes as the technology for track and trace of baggage in airports. With the growing complexity of airports and the disadvantages of barcodes, such as low read-rate, airport baggage mishandling rates has been increasing significantly. Despite the benefits of RFID, many airports have been facing roadblocks concerning a global standard of UHF frequency, the investment required for the implementation and setting up the infrastructure. To overcome the roadblocks, the International Air Transport Association (IATA) has provided support for a smoother transition to RFID with their Baggage Improvement Programme which provided some focus on global RFID implementation. With most of the roadblocks out of the way, a global adoption of RFID for track and trace in airports is on its way. 1. Introduction By 2010, one third of the world's population is expected to be on the internet and there is a staggering amount of data intelligence being driven by the rapid proliferation of smart sensors and RFID tags [1]. Radio frequency identification (RFID) is a technology that uses wireless readers to access data encoded in chips. It has evolved into a reliable, cost-effective technology used for personal identification, asset management, security, logistics, inventory control, and many other operations, without needing human intervention [17]. It enables computer systems to identify objects, as well as understand their status. After overcoming much controversy, RFID s value proposition makes it clear that it is a growing part of the web of identify that is growing [20]. The value proposition is especially high when it comes to baggage handling in airports. The increasing complexity of the system and increasing baggage mishandling is putting pressure on the industry to improve the technology, leading the way to using RFID for track & trace in airports. This paper aims to identify the need of better baggage handling and how RFID can be used as a solution. The Hong Kong International airport will provide an example of an RFID implementation in airports. This will lead to a comparison between the current barcode system and RFID and what benefits can be achieved. Finally, the paper will look at some of the current roadblocks for a wider adoption and how the industry is overcoming them. 2. Background 2.1 Airport baggage handling Since 1992, barcodes have been used in airports for the identification of baggage. During baggage check-in at the airport, a baggage tag with a barcode is printed which includes all relevant data, such as flight and destination. This tag is then attached to the baggage and serves as identification until the final destination. There are several problems associated with using barcodes on luggage. The problems include: The barcode requires optical sight to be read by the barcode scanner. Barcode scanners can read only one barcode at a time. The average read-rate is very low at around 85%. The paper on which the barcode is printed is easily crumpled or torn. Information cannot be overwritten changing or adding information requires a new barcode which needs to be printed. According to industry statistics, 42 million items of luggage were delayed or lost in 2007, at a cost of $3.8 million 1 to airlines [6]. In 2006, the industry paid $1.21 billion in direct compensation, although passengers have not yet taken advantage of the increasing liability 1 Monetary units are expressed in U.S. dollars 8

9 of airlines [14]. The baggage handling system is becoming more complex due to the safety regulations, increasing number of passengers and tighter turnaround times between flights [16]. The growing complexity and problems at airports is driving the transition to a new technology. 2.2 RFID technology An RFID tag includes a microchip connected to an antenna. The data is read using a reader which transmits digital data to a computer. The figure below depicts this process. Reader Computer System Antenna Figure 1 - RFID technology [7] Transponder The RFID Journal defines RFID as a generic term that is used to describe a system that transmits the identity (in the form of a unique serial number) of an object or person wirelessly, using radio waves [2]. Along with barcodes and other technologies, they are considered automatic identification technologies which have been developed to increase efficiency of manual data input and improve data accuracy [2]. Contrary to what many people think, the technology is not new and it dates back to World War II where it was used to identify and authenticate allied planes [7]. 3. Implementation Especially in such a complex setting as an airport, it is important to take the environment into consideration when implementing RFID. For example, metal, electrical noise, extreme temperatures, liquids and physical stress can create a challenge and may affect performance [7]. For this reason, the environment can only be assessed using field trials, so by 2007 several trials were already performed. IATA summarized the trials and implementations in table 1. Upon completion of a trial, many airports have moved on to a full implementation, such as the Hong Kong International Airport, while some have just abandoned the project. Table 1 - RFID trials and implementation [14] 9

10 3.1 Hong Kong International Airport A good example of a RFID implementation project which started as a pilot and is currently fully operational is the Hong Kong International Airport. With a passenger throughput of 48.6 million in 2008, HKIA is one of the world s busiest airports. By 2008, they announced that all of its check-in counters would print integrated RFID baggage tags [18]. The main driver for RFID implementation at HKIA was to boost security and improve baggage handling efficiency. They wanted to reduce required manpower, as well as reduce short ship rate and baggage transfer. In 2004, a pilot implementation was started. A year later the project went live, and by 2008 it was completely operational [19]. The RFID technology is used in parallel to their existing barcode system. When checked-in and transfer luggage arrives at the luggage-handling conveyor, they are fitted with a smart label bearing a 10 digit IATA number which becomes the bag s license. The license includes information such as airline and flight number and is read using a barcode scanner. The information, which is stored in the barcode, is transferred to the RFID tag. RFID readers throughout the baggage handling process are then used to ensure the correct flow of the bags to the airplane [19]. Reengineering was required to accommodate the 214 new readers, 500 antennas and the change in software. The total cost amounted to $50 million, but costs never represented an issue. The support of the local civil authorities and the airlines ensured that the project was self financing [19]. The result of the implementation was higher customer satisfaction through a lower rate of Table 2 Barcodes vs. RFID capabilities mishandled luggage. The productivity of the airport increased by 17% due to higher luggage sorting capacity, reduced manual labor and increased passenger security. The only concern that arose was due to the possible health risks of RFID from exposure to radio waves, but experts insured that it was not anything to worry about [19]. Since the implementation of RFID at the Hong Kong International airport, there has been many more. By early 2008, more than 30 airports had a trial or full implementation of RFID. In December 2008, Lisbon international airport became the world s first airport to completely replace the barcode with RFID. All baggage are now tagged and tracked with RFID and barcodes have been completely eliminated. Then Italy s busiest airport, Milan s Malpensa Airport, became the first airport in Europe to implement a comprehensive RFID baggage tracking across the entire baggage handling system [5]. 4. Results RFID provides many benefits over the current barcode system. Table 2 below summarizes the capabilities of the two methods. The implementation of RFID involves benefits to three stakeholders: the airlines, the airports, and the passengers. [14] For the airline, a $733 million saving is expected every year, of which $343 million would be attributed to a read rate improvement. This saving estimate is a direct result from the reduction of baggage mishandling costs incurred by airlines. For the airports, expected benefits are the optimization of operating costs, the ability to better manage the infrastructure, enhancement of safety and quality control. Finally, the passengers benefits will be seen through the reduction of 5.7 million claims, the faster resolution of baggage problems, and accurate/timely information [14]. 10

11 5. Overcoming roadblocks 5.1 Standards Leading the airline industry, the International Air Transport Association (IATA) was created about 60 years ago by a group of airlines. They currently represent 230 airlines, which consists of 93% of international traffic [11]. In 2008, with nine airlines and nine airports, IATA has launched a Baggage Improvement Programme (BIP) to reduce the rate of mishandled baggage by improving handling processes. Part of their focus is on the identification of baggage using RFID to ensure passenger and baggage are reunited at their final destination [13]. They are able to do that using their ability to create industry wide standards, attracting the helping efforts of airlines, and focusing on a mutually beneficial approach for everyone involved [10]. The International Organization for Standardization (ISO) and EPC Global have developed standards for RFID technology to define an efficient platform on which industry can operate and advance [7]. Although there are many different RFID frequencies, the UHF Frequency Band was chosen by IATA for the aviation industry because of its proven interoperability, large reading distance, low cost, high information transfer rate, and compatibility with a broad spectrum of materials [9]. In November 2005, IATA approved the recommended practice RP1740C for the UHF electronic bag identification, based on three standards: ISO/IEC C (EPC Gen2 protocol), ISO/IEC and ISO/IEC [15]. IATA also recommended a business case for the industry and a transition plan for the technology that promotes global interoperability. The recommendation was provided in the Passenger Services Conference Resolution Manual [21]. 5.2 Cost and infrastructure Today, a major roadblock for the implementation of RFID in airports is still the investment required. There are two areas of costs associated with RFID in airports. The first one is the cost of the equipment (tags and readers) and the other one is the cost of the integration into the system. Considering the cost of the equipment, there are currently many different manufacturers, which provide it at various costs; some have previous experience in RFID implementation in airports [16]. With the price of tags still around 10 cents each, it would cost the airlines about $300 million annually for 3 billion bag tags. On the positive side, the cost of tags is decreasing as the number manufactured is increasing [16]. For example, increasing manufactured quantities from 100,000 to 1,000,000 can reduce the cost by 40%. Another 25% saving can be achieved with 10,000,000 tags [16]. In addition, tags of the range 7-8 cents have already been introduced several years ago. Then earlier this year, a Chinese RFID tag-and-reader company has announced an EPC-compliant inlay (aka tag) for 5.8 cents each for volumes of 5 million or more [4]. This price reduction could have a significant effect on the future speed of RFID adoption. The cost of tag printers and readers also needs to be taken into consideration. In 2007, the cost of RFID printers was between $1,600 and $1,800, while the readers range from $1,500 and $2,500 [16]. The airlines would also have to invest in the installation of the infrastructure. This includes the structure for readers, commission tests for readers, and Programmable Logic Controllers (PLC) integration. The total cost of implementation is in the range of $350,000 and $1,000,000 depending on the size and complexity of the airport [16]. Although the cost seems high, studies have shown that the system would provide a payback within two years [3]. Even if the investment is possible, building the infrastructure is another roadblock. With a larger amount of data available by using RFID, the complexity, burden, and cost of managing the information is increasing [14]. There is currently also a lack of skilled integrators to implement RFID, which has limited the number of full implementations possible. But contrary to popular belief, global benefits can be achieved with only 80 of the top airports equipped with RFID. This will cover 80% of all mishandled luggage [14] and save the industry over $200 million [21]. 6. Conclusion Due to the increasing complexity of airports and number of mishandled luggage, the change from the traditional barcode system to using RFID technology for track and trace at airports has become a global trend. With the help of the International Air Transport Association, airports have overcome the roadblocks of RFID implementation, such as building the infrastructure and the investment required, in order to benefit from its main advantages. Although there is already a large amount of airports already equipped with RFID, the reduced cost of RFID chips is opening up the way for small airports to adopt the new 11

12 technology and leading the way to a more global benefit for everyone. Baggages at airports are quickly becoming part of the internet of things. 10. References [1] Smart infrastructure of the Century. (2009, March 7). The Jakarta Post. Retrieved March 16, 2009, from International Newspapers database. [2] What is RFID?. RFID Journal [Online] /1/129/ [3] Roberti, Mark. Baggage Tagging Is a No-Brainer. RFID Journal. 9 October [Online] [4] SCDigest Editorial Staff. "The Five Center RFID Tag is Here, the Five Center Tag RFID is Here! Well, Almost." SupplyChainDigest. 29 January [5] European airports deploy RFID enabled baggage tracking. RFID News. 5 March [Online] [14] RFID for Baggage business case IATA [15] INNOVATIONS and technologies IER Accessed: 20 March Available : /uk/ market/air-transportation/~/uk/innovation/keeping-track-ofbaggage-with-rfid/index.html [16] RFID in Aviation: airport luggage control. AeroAssist. June [17] Zebra s RFID Readiness Guide: Ensuring a Successful RFID Implementation. Zebra [18] Hong Kong International Airport. Accessed 20 March Available: [19] Case Study: Hong Kong Airport - Baggage tracking implementation. The Sectoral e-business watch [20] Bite, Katalin Emese. Minimizing the baggage loss at airports. Periodica Polytechnica [21] RFID IN AVIATION. IATA [6] Software upgraded for baggage handling solution RFID News. 21 October [Online] [7] Understanding Radio Frequency Identification (RFID). R Moroz Ltd. 4 November [Online] [8] Zhang, Ting; Ouyang, Yuanxin; He, Yang. Traceable Air Baggage Handling System Based on RFID Tags in the Airport. Journal of Theoretical and Applied Electronic Commerce Research. Vol 3. Issue1 April University de Talca - Chile [9] Dr. Scherrer, Darien. RFID Regulation and Technical Issues. RFID visions and reality ETH Zurich. 6 March [10] Baggage Improvement Programme (BIP) IATA Accessed: 20 March Available: [11] About Us IATA Accessed: 20 March Available : [12] IATA Introduces RFID Standard for Baggage Tags Annual industry savings projected at US$760 Million. IATA. 18 November [Online] [13] Simplifying the business. IATA. January

13 Smart Home Jingzhi Xu MSc Management, Technology and Economics ETH, CH-8092 Zurich, Switzerland Abstract Have you ever dreamed of owning a house, which you can control all the things with one single click? The Smart Home provides this concept that, a house installed with of remote control and automation technology which make your life easier and more convenient. This technology has appeared for several decades; however, there is no large scale of adoption of this technology until now. This paper analyzes the Smart Home market from the demand side and supply side, and there are some opportunities of this technology to be promoted. However, there are still some roadblocks to adopt this technology as well. 1 Introduction A Smart Home is a home or building (usually a new one), which is equipped with special structured wiring to enable occupants to remotely control or program an array of automated home electronic devices by entering a single command [1]. For example, you can remotely control your heating and lighting system in your house by a touchtone phone when you are in vacation. You can also alarm the security system when you find some bad guys break into your house. First, this paper is going to give an overview of the concept of Smart Home and its main characteristics. Then the technology aspect of Smart Home is introduced and its some key elements are discussed in details. Finally, the market aspect of Smart Home is also discussed from the demand and supply side, and the viewpoints of different roles are compared with each other. 2 Background Smart Home uses electronic networking technology to integrate the various devices and appliances in the house, so that the households can control an entire home centrally and remotely, as a single machine. This technology actually offers significant improvements in the living standards of the elderly and disabled who may otherwise totally rely on home care without these technologies. There are four main features of Smart Home, which are remote access, safety and security, centralized control, and sustainability: With remote access, households can control their home via PC or telephone remotely. For example, if you forget to switch on/off some devices when you are away, or even simply want to switch on the HVAC system before you go back home, you can use your office PC or even a mobile phone to have a full access to your home automation system wherever you are. You can trigger on/off devices, lights, or activate programmed sequences such as vacation mode to give your house a lived in look, or simply 13

14 switch off the security alarm and open the door lock to enable relatives or Delivery Staff to enter your house. Safety and security is a main consideration regarding to the concept of Smart Home. The sensor network within the house and around is capable of detecting the unpredictable break-in, therefore alarming automatically and turning on the strong lighting system to let the households clearly see the situation at night. The centralized control system, usually in form of touch panel, makes the life of households much easier. With one single touch panel, you can control the home theater, music system, light controls, life safety and security system, etc [2]. The last but not the least is the sustainability, which should be realized by a typical Smart Home. Since the amount of energy consumed in the house accounts for a large proportion, the future home need to take considerations into save the energy consuming by 50% or even more, compared to conventional houses. The energy collected at solar panels or building material itself (such as multi-layer facade) can supply the heating or cooling during the winter or summer times. When households are not at home, the whole heating or cooling system will be stopped which will save much unnecessary energy waste. Another example would be rainwater collecting system can make use of rain to flush toilets. There are some examples of design of the concept of the Smart Home: the atmosphere transmission system, which has the capacity to record its own memories of living patterns and the residents preferred lighting, sounds, images and smells; Smart dressing table can create a perfect and convenient atmosphere for putting up make-up on quickly and effectively; Smart bed can be programmed to remember your preferred sound, smell, light and temperature settings to gently wake up all your senses and give you a good start to every morning; Smart Universal Remote Control is capable of recognizing an object via an internal camera promptly displaying an appropriate GUI for any system in the Smart Home [3]. 3 Smart Home Technology Smart Home technology is a collective term for information and communication technology (ICT) which are used in houses, where the various components or devices are communicating via a local network. The technology can be used to monitor, warn and carry out functions according to various different selected criteria. Smart Home technology also makes the automatic communication with the surroundings possible, via the Internet, ordinary fixed telephones or mobile phones [4]. There are some elements, which is applied in the market now: Sensors Sensor is a very important element used in smart house, measures a physical quantity and converts it into a signal which can be read by an observer or by an instrument. Sensors monitor and measure activities in the surroundings. Examples are movement and heat sensors, humidity sensors, bed mats, thermometers and smoke detectors. Actuators Actuator is a mechanical device for moving or controlling a mechanism or system. Examples are door or window and garage door openers, curtain and awning engines, automatic light switches and relays. Several of the components of environmental control systems are actuators. Controllers Controllers make choices on basis of programmed rules and occurrences. Controllers are microprocessors often built-in with sensors and actuators. They receive and process signals 14

15 from the sensor or other controllers. For example the controller of a thermometer can be programmed to send a message to switch off the electric heating system when the temperature exceeds 22. This message is received by the heating controller, which will switch on the actuator. If on a hot day the temperature exceeds 27, a message can be sent to the window opener to open the window. Network and Data Bus The network is the transmitter of the signals in the system. The most popular transmitters are power line, radio signals (RF) and to some extent optical fibers. All modern Smart Home systems have bus-based networks. In a busbased net all the units in the system can read all the messages. The system unit recognizing their own address reacts to the content of the message. A unit can receive a message individually or as member of a group. Hence, in one case a message can be submitted for one lamp to light, and in another case a message for all lamps to light. 4 Smart Home Market 4.1 Technology Adoption The adoption of new consumer products follows a standard pattern which called S-curve, as the graph shows above. At the early stage of the adoption of a new technology, there is a slow take-up in the early years, and then followed by a more rapid increase in adoption which moves the product into the mass market arena. Finally, as the market matures and take-up slows down, the gradient of the S-curve become shallower as it approaches a maximum level of market penetration. While most technologies follow the S-curve pattern of adoption, but they do so at different rates or speeds. For example, it takes 80 years for the telephone to reach 70 per cent of households while the television took only 15 years. Similarly, the electricity has reached 50 per cent market penetration after being in the marketplace for over 50 years, whereas the car has reached only 20 per cent penetration over a similar period [5]. The shape of the adoption cure depends on several different factors, such economical, social, technological factors, which is quite complex. Therefore, it may need a long time for the adoption of Smart Home technology; we may even need our next generation to improve this technology as well. 4.2 Demand and Supply Side of Smart Home Demand Side Figure 1 S-Curve of Different Technology The customers'interest in the concept of Smart Home has been mainly from the DIY and hobbyist segment of the market. Actually, many Smart Home websites and technical literatures are the preserve of these somewhat technically minded accumulative home improvers. The mature projects of Smart Home have only been limited to the academic researcher and wealthy home owners until now. Customers who buy Smart Home only relatively satisfied with their partial systems, typically integrating intruder 15

16 alarms, security lighting, and fire and security sensors. While some customers may be willing to pay additional money on a new or converted property to obtain limited functionality of Smart Home, however, there may be greater unwillingness to retrofit such systems into their existing residences because of the expected disorder. In recent years, there has been an increase in the building and conversion of properties that have embedded Smart Home technology. Moreover, there has been increasing access to the technology for expert home improvers and DIYers. There remains, however, a general lack of passion on the part of construction and property industries, manufacturers and suppliers to push or even properly promote this technology. The lack of common protocols and high initial high investment make the adoption of this technology hardly Supply Side Technology of X-10 is introduced in 1979, which is less sophisticated level than today s Smart Home technology. Twenty years on from X-10, there are two new technological drivers which could give new motivations to the concept of Smart Home: the appearance of powerful microprocessors and the increasing pervasiveness of new digital communications protocols. Microprocessors allow the electronic control of almost all mechanical appliances. Whereas washing machines, fridges and televisions were once controlled using mechanical devices, nowadays the microchip facilitates their control and operation by electronic means including remote control. The digital communications protocols such as the Internet and Bluetooth provide opportunities for standardizing communications between appliances and equipment, and for making the interface between users and equipment more straightforward and easy to use [6]. There are some more opportunities from the supply side: many new technologies appear; wireless and power line are getting cheap and cheaper nowadays; more and more big companies start to take part in, which can improve the adoption of Smart Home technology; especially for Japanese and Korean residents, the living space is very limited, so they have more motivation to develop Smart Home technology, to improve their living standard. 4.3 Consumer Attitude This survey is conducted by Joseph Rowntree Foundation in 2000 [6]. Four key features of Smart Home were tested out with participants using the following options: 1. remote access; 2. safety and security; 3. centralized control; 4. convenience % 18% 23% 19% Views about the Smart Home 36% 28% 40% 47% 13% 16% 13% 25% 22% 13% 20% 11% 16% 13% 4% 8% 0% 20% 40% 60% 80% 100% Strongly Agree Agree Neither Disagree Strongly Disagree Figure 2 Views about the Smart Home Of the four features, security and safety aspects were the most popular with over two thirds agreeing with. The benefits of remote access also had wide appeal. Opinion was more divided on the benefits of convenience and centralized control. In both cases around half of those 16

17 surveyed indicated these features would be useful to them. Groups most likely to value the benefits of Smart Home were: those in work, men, and people aged 15 34, households with children and those who already have access to new technology in their house. The technical aspects of running a Smart Home caused concern among many of those surveyed. Three specific areas of concern were tested out with participants, which are: 1. system failure; 2. lack of control; 3. complexity % 15% 22% Concerns about the Smart Home 35% 40% 43% 13% 15% 12% 27% 24% 18% 9% 6% 5% 0% 20% 40% 60% 80% 100% Strongly Agree Neither Strongly Disagree Agree Disagree Figure 3 Concerns about the Smart Home People were most concerned about the system failing which around two-thirds agreed with. Around half were worried that the system would be too complex and a similar number said they would worry about the system being difficult to override. Older people were most concerned about potential technical problems which twothirds of those aged over 55 agreed with compared to 38 per cent of the young group aged Therefore, people are more concerned with security and safety aspects regarding to the benefit of Smart Home. While system failing is most concerned by users with regard to potential problems of it. The suppliers need to consider both viewpoints most from the consumer side, while they provide Smart Home to the market. 4.4 Viewpoints of Industry Experts Architect is one of the most important roles during many parts of the design build process. They have deep influence on the type of services and systems integrated into buildings. Architects believe that rising income and wealth will drive the market for advanced Smart Home technology. The view of building contractors is that advanced Smart Home will remain a rarity at the lower and middle end of the housing market. Some of them see the Smart Home as a fad, and in some cases regard it as a distraction where they are building for the top end of the housing and apartment market. The specialist contractors and service providers are at the sharp end of the Smart Home industry, and they are generally very optimistic about the growth of similar smart solutions in the domestic home. Property agents and developers maintain that show-homes set up so that the technology can be demonstrated effectively provide the best hope of stimulating an interest in the Smart Home concept. The equipment manufacturers offer strong support for Smart Home technology. For example, Siemens and Sony are, along with the domestic appliance manufactures and ICT conglomerates, at the forefront in developing the common protocols and standards needed to speed up market development in this home technology (e.g., ilink (IEEE1394) and HAVi) [7]. The experts from academic institutions and research organizations took the most positive stance towards the concept of the Smart Home. 5 Conclusions The Smart Home has remained a dream for years just over the horizon. And the horizon keeps receding. Along the way, there have been 17

18 intriguing pilot projects and lab experiments, but nothing that justified the extra cost to consumers. Today, despite the spread use of broadband Internet and home networks, most consumers still remain skeptical about Smart Home technology. Mass market consumers have almost no interest in using technology for home automation or control [7]. Still, the percentage of households having broadband Internet are growing worldwide, if the government can guide the development of open standards in hardware and software, then the smart meters can communicate with a television set-top box, cell phone or PC [8]. Those devices will serve as remote controls that allow a person to see how much energy a house is consuming and suggest heating, lighting and air conditioning settings to save money. Once a technology platform is in place, the Smart Home market for intelligent appliances and other devices will take off [9]. Therefore, the whole industry will boom. However, there are many different industries get involved in, which makes it more complex than that only single industry can jump to start it, such as building construction/installation, automation industry, consumer electronics vendors, household appliance vendors, and computer and peripherals vendors. All in all it s still a long way for Smart Home technology to adopt worldwide. [3] Sang Hyun Park, So Hee Won, Jong Bong Lee, Smart Home digitally engineered domestic life, Pers Ubiquit Comput (2003) 7: [4] Toril Laberg, Haakon Aspelund and Hilde Thygesen, "SMART HOME TECHNOLOGY: Planning and management in municipal services" [5] IPBusiness, department_id=12&article_id=344 [6] Mark Pragnell, Lorna Spence and Roger Moore, The market potential for Smart Home. [7] Vividlogic, 1&p_id=4 [8] Steve Lohr, "The Smart Home Is Still Looking for a Market", The New York Times, January 6, [9] Victoria Haines, Val Mitchell, Catherine Cooper, Martin Maguire, "Probing user values in the home environment within a technology driven Smart Home project". References [1]Digital Image Communications, [2] Bob Siegel, The Smart House Area homeowners opt for home theaters and more, welcomehome. 18

19 Input Techniques for Mobile Phones: keyboard, sensors, barcodes, RFID, HCI Afet Musliji Management, Technology and Economics ETH Zurich, CH-8092 Zurich, Switzerland Abstract Input techniques linking mobile phones to humans and to things determine the way these devices communicate with the physical world. Requirements and constraints such as small screens, limited buttons and the mobile setting of the user on-the-go pose new challenges for developing appropriate input techniques that satisfy the user. Different input techniques including state-of-the-art are described in this paper and analyzed based on intuition of the users and functionality of the devices. Effects that different techniques might have on the development of new applications are also provided. 1. Introduction The mobile phone is the most pervasive electronic device used by people all around the world. In 2008 there were 2.5 billion mobile phones and about 80% of the world s population had network coverage [2]. It is estimated that by 2015 the number of active mobile phones will be 5 billion [2]. Given the high demand for mobile phones and with the rapid advance of the technologies involved in the same mobile devices the mobile phone has evolved from a simple mobile communication device into a multifunctional device used by people for different purposes. A mobile telephone that provides additional information accessing features combining voice services with , fax, pager or Internet access is called a smart phone [4]. These additional capabilities of the mobile devices enable people to interact with things, places and other people in the real world. This brings us to the idea of Ubiquitous Computing or the Internet of Things for whose implementation the smart phone is the most promising device. This statement is supported by the fact that the mobile device is always with the user. However, this does not necessarily imply that the user is always able to use the device raising the question of design challenges particularly the interaction techniques used for the same device. Mobile Human Computer Interaction (HCI) studies these challenges. 2. Mobile HCI - Design Challenges and Requirements Mobile HCI is a multidisciplinary approach that addresses the design of mobile user interfaces from different viewpoints. Aspects such as user psychology, application design, social usability and communication technology are all taken as inputs in mobile HCI research. The mobile phone is meant to always be on the disposition of the user. As such, many design challenges and constraints are brought in the design of mobile devices. The issue of input techniques as part of the design and the possibilities emerging from breakthrough techniques are studied for the purpose of this paper. The major constraints of this nature that are identified are: small screens and limited buttons of mobile devices resulting from their small size, the limited attention of the user in a mobile situation and the limited time that the user has to learn a new interaction technique. Contrary to these requirements, most of the conventional mobile devices are used under conditions of high cognitive and attention demand; the software of devices is ignorant of the surrounding environment and events and natural gestures of use are missed. 2.1 Small Screens and Limited Buttons The pervasiveness of mobile phones implies handsets of relatively small size limiting the space 19

20 available for both screens and buttons, which make up the interface for interaction. possibility of having memorized the key for the calendar application benefiting from spatial memory. 2.2 Limited Attention of the User The mobile phone is used on-the-go and therefore gets only a limited attention of the user. However, today many mobile applications on smart phones require the full attention of the user. These applications simply ignore the surrounding environment of the user. The user should be able to use a mobile device while doing other activities such as walking or speaking to another person. The mobile device is therefore under the continuous but not full attention of the user. 2.3 Limited Time to Learn The lifetime of current mobile or smart phones is relatively short. In addition, the turnover of mobile devices is relatively high compared to other electronic devices. These two facts together imply that users frequently change their handsets and buy new ones. Users often change their handsets with every new subscription whose durations vary between months. Many times, users are forced to learn a new input technique when they face a new device [2]. Therefore, there should be standards for the type of interaction for handsets from different manufacturers and different models of handsets from the same manufacturer and the input techniques should be easy to learn. The same techniques would be easy to learn if natural gestures of people are included in the interaction with mobile phones. 3. Scenarios and Techniques In order to describe some of the techniques that address the requirements of mobile HCI, we will propose different scenarios of mobile phones users in their everyday life and show how these specific techniques are used to effectively perform the required task. 3.1 Location Finding User Friendly Interface The first scenario described involves a mobile user who would like to see her next tasks and appointments on the calendar of her smart phone and would want to spot the locations of her meetings on the map [2]. The scenario and its implementation are described in the paper about TapGlance, which is a design proposal for mobile phone user interface. The user has a brief look at the calendar by pressing and holding a number keypad with the Figure 1. A Preview of the TapGlance Interface [2] She is then interested in the location of her meetings on her list and decides to fully open the calendar application by tapping the same number key on the keypad. She notices that the locations of her two next meetings are in different places and wants to locate them on the map. The user changes the view style of the application and selects the map view style with double tapping a single number key on the mobile keypad. Again, she can memorize the key for the transition of the view. 3.2 Mobile Phone Users Facing Different Environments Light and Temperature Sensors Combined with a Touch Screen The contexts of mobile device use are far more varied and potentially compromised, than the contexts in which we interact with desktop computers [6]. For example, a person using a mobile device on the beach may struggle to read the device s screen due to glare caused by bright sunlight, while a user on an a cold place with gloves on is unable to accurately press keys or extract a stylus. The first problem can be solved with the help of light sensors that would detect the intensity of light striking the screen of the mobile device based on which the brightness of the screen would be modified. Whereas for the person who needs to use her mobile phone with her gloves on and possibly with reduced motion ability of her fingers, the device should detect the outside temperature and adjust the display on the touch screen of the device to make the interaction possible. 3.3 Using a Mobile Phone for Physical Browsing Internet of Things 20

21 The idea of the Internet of Things is that every object becomes a smart object having a tag, which provides a hyperlink to the virtual world. A tag may be for example a barcode, RFID (radio frequency identifier) tag or an IR (infrared) beacon. Based on the tag information, the user can then for example load the page corresponding to the URL to his device and get electronic information from a physical object. This is a powerful paradigm, which adds the power of World Wide Web to the interaction with physical objects [7]. The mobile phone or the smart phone is the most suitable device for interacting with these objects. The main interaction methods that can be used are scanning, pointing and touching. A person can use the scanning interaction technique in order to find out which objects in her vicinity are possible to be controlled with a mobile phone. The object might or might not be in the sight of the user. The services provided by the tags will then be presented on the user's UI device. Thus the presence of the tags is communicated to the user and the user can then choose the object of interest by using her mobile phone. Effectively, this means choosing a physical object in the digital world [7]. Figure 3. PointMe [7] Finally, the interaction technique involving touching would use RFID tags on the object whose information would be accessed by bringing together the mobile device with the smart object. This technique is suitable for a person who is shopping and needs additional information about the product that she is interested in buying. The hyperlink on the RFID tag of the product provides access to the page where the consumer can learn more about the same product. These entire interaction techniques enable the mobile phone become a universal remote controller. 4. Research Area Figure 2. ScanMe [7] When an object that the user wants to interact with is visible, then pointing would be a natural way to do it. The user points to the tag on the object with a mobile phone, which can use IR (infrared), laser beam or Radio Frequencies. With the latest trends [6] in society and technology of increasing amount of personal computing done away from the desktop; the increasing capabilities of eversmaller devices; the congruence of computing capabilities onto mobile phones and the overall ageing of the population, mobile HCI research becomes ever more important. Mobile personal computing brings the physical location of the user to be considered for a comfortable and normal usage of the device. The amount of light and the ambient temperature have a dramatic effect on the overall performance of the mobile phone and thereby customer satisfaction. Situational impairment [6] stemming from such physical conditions should be better understood so that solutions to such impairments can be incorporated into new devices. This also applies for ageing users of mobile phones, whose ageing related impairments affect their user experience. The small size of mobile devices and the variety of those handsets offered on the market bring the requirement for common standards on input techniques. Users of mobile phones would prefer to learn once and use the same input technique everywhere [2]. 21

22 The greater computing capabilities and the increasing pervasiveness of the mobile phone or the smart phone imply that mobile human computer interaction is an interesting and a very important research area. Mobile HCI research will try to find new technologies and techniques to increase the effectiveness of the pervasive computing device the mobile phone of the future. 5. Conclusion In summary, we can conclude that input techniques for mobile phones should be developed in accordance with the specific requirements of the mobile environment. The issues faced are addressed with technological solutions such as different keyboards, sensors for different purposes, barcodes and RFID tags. In this paper, the challenges faced in designing and selecting appropriate input techniques for mobile phones were discussed. The design issue of mobile HCI gains even a greater importance considering the abundance of the mobile phone all over the world and its potential as a future ubiquitous computing device. The design requirements stem from the nature of the mobile device and the usage of the device not neglecting the environment that surrounds the users. Based on these challenges different scenarios of mobile users were identified and solutions using stateof-the-art technologies were proposed based on research and already developed applications on this field. The paper ends with an overview of the mobile HCI research area and the problems that it strives to solve. [5] Ken Hinckley, Jeff Pierce, Mike Sinclair, Eric Horvitz. Sensing Techniques for Mobile Interaction. Microsoft Research, One Microsoft Way, Redmond, WA [6] Jacob O. Wobbrock. The Future of Mobile Device Research in HCI. Human-Computer Interaction Institute, School of Computer Science, Carnegie Mellon University, Pittsburgh, PA USA. CHI 2006 Workshop [7] Pasi Välkkynen, Ilkka Korhonen, Johan Plomp, Timo Tuomisto, Luc Cluitmans, Heikki Ailisto*, and Heikki Seppä. A user interaction paradigm for physical browsing and near-object control based on tags. Mobile HCI Conference References [1] Enrico Rukzio, Gregor Broll, Karin Leichtenstern and Albrecht Schmidt. Mobile Interaction with the Real World: An Evaluation and Comparison of Physical Mobile Interaction Techniques. Ambient Intelligence, LNCS 4794, [2] Robbins, D. C., Lee, B., and Fernandez, R TapGlance: designing a unified smartphone interface. In Proceedings of the 7th ACM Conference on Designing interactive Systems (Cape Town, South Africa, February 25-27, 2008). DIS '08. ACM, New York, NY, [3] Smart phones: how to stay clever in a downturn. ns/smartphones-clever-in-downturn.cfm [4] CEVA Glossary of Terms. 22

23 End User Programming in Internet of Things Özge Kökçü Department of Technology, Management and Economics, ETH Zurich Abstract Web-enabled cell phones, sensors, different design tools, public APIS, PDAs, toolkits are becoming pervasive and cheaper day by day. Moreover, it is simpler to learn how to use them. On the other hand they are designed for a general user with specific needs (lack of customization). This fosters end-users who are mostly non-professionals for developing their own applications for their devices. The aim of this paper is to focus on end user programming in internet of things. First of all, the definitions of end user and end user programming will be stated to understand the concept better. Then, it will concentrate on end user programming in internet of things with specific examples such as Exemplar, Lashups and Chief Cook Robot. Finally, after discussing the advantages and disadvantages of adding end user programmability feature to products, the future work in internet of things will be mentioned in brief. 1. Introduction With the help of internet, information sharing accelerated rapidly. Users can reach any information they want very easily and quickly. Furthermore, involving the users in the product development phase is the new trend. Therefore, end user programming is becoming pervasive and it brings the flexibility for users to make additions to their products according to their own specific needs. Since users know their problems best, it will be very beneficial for both users and product developers to add end user programmability feature to the products. End user programmability in the framework of internet of things is a progressing research field which aims to involve users in product development to reduce the related costs. Before getting in the subject one has to know who the end users are and thus in the next section the definition will be given. 2. End Users End users are the users of a program. They can be artists, receptionists, teachers, designers, students, animators, accountants, in brief; everybody who uses computer can be an end user. End user programmers write applications but this is not their primary job. They may have different backgrounds in programming. They perhaps take a course in college or learn it from their friends or they may not have any knowledge at all. Scientists and physicists were the first end user programmers. It was very difficult for them to learn programming with assembly language. Therefore, Fortran was launched in 1950s which made their life easier. They were able to develop their own applications easily and quickly. Then, the next group consisted of people who wrote spreadsheet macros. Lotus was the main program that they used. Database builders followed spreadsheet macro writers quickly. They wrote programs for data storage and for retrieval of customer information to keep track of their customers. Finally, with the internet boom in mid 1990s, almost everyone became an end user programmer [6]. Information sharing accelerated with internet boom and easy access to data helped people to develop their own applications. As stated in EUSES (End Users Shaping Effective Software) web page, there were 2.75 million professional programmers in the US, it was expected that the number of end user programmers would exceed 55 million by 2005 [8]. 23

24 3. End User Programming Before defining the end user programming, it will be more appropriate to define programming first. Programming is the creative art of instructing a computer what you want it to do. Simply, it is defining a sequence of commands to a computer to perform a specified task. With the advance of technology the nature of programming is changing rapidly. Everyday, lots of new tools emerge to allow users to design new applications and to do programming. As a result of this, more and more nonprofessional people are being included in the world of programming. The emerging trend in programming is to increase the number of people who can do programming for their own usage. More and more products are trying to integrate scripting or some sort of macro languages. This concept is being described as end user programming. The definition of end user is clear but the use of programming in this context creates confusion. End-user development, end-user customization and end-user software engineering are other concepts that are used to prevent this confusion. In the context of this paper, end user programming is the programming done by the end users who are not professional programmers and do not have any educational background in programming [7]. With the help of end user programming, the power of software is increased significantly since the users are not restrained by the capabilities of the software. The internet boom made it possible to access lots of technologies easily and quickly. This leads users to new ways to develop applications and programs. There are different approaches for end user programming such as programming by demonstration, visual programming, natural-language syntax and forms-based programming. Programming by demonstration means allowing users to demonstrate their actions and inferring programs that correspond to those actions. Visual programming refers to providing a visual interface to programmers such as dataflow diagrams, flowcharts and screenlayout systems. Natural-language syntax is making the programming language similar to a spoken human language. Cobol and HyperTalk tried this approach. Finally, forms-based programming means programming by filling out a set of forms that query a user about the types of inputs and results she/he wants [7]. complier, error checking and debugging tools, documentation and version management tools at least, as the bare minimum requirements [7]. There are lots of software programs available for users that have end user programmability feature. LabVIEW (a functional measurement application with analysis and a custom user interface), Mathematica (to monitor the movements of the stars, create interactive graphs of stock prices, or manipulate digital photos, etc), Citrus (Graphical structured editors for code and data), Barista (to create of a new class of highly visual, highly interactive code editors), Exemplar, etc. This paper will give detailed examples from tools that are used in internet of things. 4. End User Programming in Internet of Things End user programming in internet of things is a relatively new concept and there are limited applications available to users. However, there are serious ongoing researches. Progressively more diverse set of sensing technologies is appearing in smart products and research projects. In this context, different research groups such as HCI (Human Computer Interaction) in Stanford University are trying to develop prototyping tools that allow designers to gain insight into the design space of sensor-based interactions more rapidly[3]. In the following subsections, applications with end user programmability feature will be discussed to illustrate the concept more concretely Chief Cook Robot This robot is developed in EPFL (Ecole Polytechnique Federale de Lausanne) in Learning Algorithms and Systems Laboratory (LASA). It is a good example of programming by demonstration to clarify the concept of end user programming. It imitates the basic actions demonstrated by people. Manipulation of objects and reproduction of gestures are the main imitation tasks that are performed by this humanoid robot. To illustrate, it can cook an omelet by whipping eggs, cutting ham and granting cheese. Typical software with end user programmability feature should have an editor, an interpreter or 24

25 Figure 1. Body gestures are recorded by motion sensors. Sensors gather data about body position independent from environment [9]. Information flow in the system starts with the human performing the action (see Figure1). After that, robot gets the signals and decides what to imitate by first reducing the dimensionality and then making probabilistic data encoding. Next step is determining the task constraints and how to imitate the action. Finally, the task is reconstructed in data space and robot imitates the action. There are three ongoing researches for this project: learning task constraints, dynamical control, and general inverse kinematics. Besides that, the researchers are concerned with biological principles to improve the robustness and flexibility of the robot [9] Exemplar Exemplar is a prototyping tool that takes sensor data as input and gives constructive events as output for interaction design. It also uses the programming by demonstration technique. First of all, end users perform the action with the sensor. Then, the program generates corresponding signals which can be reviewed by the user from the computer screen. Finally, user can review the result by demonstrating the action again. Moreover, it is a very powerful tool that can author individual events that depend on multiple sensors and multiple events for a single sensor. To illustrate, Exemplar can be used to prototype an accelerometer based control for existing game in less than 30 minutes [3]. Exemplar made a study with 12 participants. The participants belonged to different ages, sexes, and educational backgrounds. Although they had some human computer interaction design experience, none of them was an expert in sensor programming. The aim of the study was to assess the ease of use of Exemplar. Participants were given 3 tasks to complete. The first two tasks were relatively easy compared to the last one. The results were quite satisfying. The first two tasks were completed by everyone and they at least completed a part of the third task. After the study, participants indicated that Exemplar was successful in decreasing the time required to build prototypes, facilitating rapid modifications, enabling more experimentation and helping them to understand user experience. From the study as a whole, it was concluded that majority of the participants spent most of their time on designing rather than implementing. Furthermore, they defined two main shortcomings in Exemplar. First one was that users were not able to see the events (available build-in functions) that they do not use but still active. Second one was the training examples were hard to find after they started their implementation since they were pushed too far off-screen [3]. However, developers of Exemplar have overcome these shortcomings recently. 4.3.Lash-Ups Lash-up is a toolkit that end users can use to develop location aware web services for their cellular phones. Both cellular phones with internet connections and public APIs for web services are becoming pervasive. This will increase the usage of the lash-ups. Lash-up toolkit solves the main problem of previous mash-ups which is identifying the user s location without asking for any inputs from the user [2]. This toolkit has two main components: server and client. Server has the data for available lash-ups for users. Client resides on the user s cellular phone. Client gathers location information and sends it to lash-up server and server searches for relevant lashups and sends back the list of relevant lash-ups in which the user can choose whatever he needs. There can be several applications of lash-ups. They could be used as reminder service. After doing the necessary settings, whenever the user enters a predefined region, lash-up server could remind him to do something such as buying gasoline for his car. Moreover, they can be used for searching web content with entering location data. For example, users can find out the nearest markets around without entering input. Developers of lash-ups are trying to improve it further. Now, they are trying to develop new tools to 25

26 make it easier to develop Lash-Ups for users. Besides that, they are working on the content they send to the end users. They are trying to make it as relevant as possible and to increase the quality. Moreover, they are exploring new ways for identifying group behaviors and personal preferences of individual users. Lastly, in Lash-up distribution, they are trying to use supplementary attributes of users such as time of day and place, etc [2]. 5. Pros & Cons The costs and benefits of adding end user programmability feature to your product depends on how much control and programmability you plan to maintain for users. Benefits are worth to consider. First of all, users know their needs and problems best. It is impossible to address the needs of every single user s specific needs. Therefore, adding end user programmability feature will make the product simpler and more reliable. Product will just have the general features needed. Allowing users to add their programs would give them freedom and responsibility at the same time. Instead of blaming the developers of the product, they would try to solve their problems on their own. Furthermore, serious users will realize the missing parts of your product and they will be able to participate in the improvement of your product [7]. On the other hand, the managers and developers of the product will fear the loss of control on the performance of the product. Users can decrease the performance with their applications and then blame the product for operating slowly. Moreover, the users may be slow adaptors and may not be used to programming. Therefore, detailed documentation and training will be needed for the beginner users which mean extra time and resources. Also, users will not be aware of their limitations and some of the programs that they will develop may do unintended and damaging things. Another disadvantage is the different versions of the product may confuse the users. Even if radical changes are done in the product, users will still want their programs to work in new versions [7]. Warren Harrison, a professor in Portland State University, approaches end user programming from the security perspective. He points out that many e- businesses have bankrupted because of Web sites written by end users who learn Perl or HTML on their own [6]. End users are not aware of the importance of securing their applications. In response to this, the concept of end user software engineering emerged. End user software engineering cares for reusability, security, and variability besides the programming. 6. Future Work End user programming in internet of things is a relatively new concept and it is difficult to find a lot of information in this concept. Exemplar and Lash-up are good tools for this topic. Developers of both Exemplar and Lash-up are still trying to improve their products. Besides these, many other new applications can be developed. Developing a product where people could use RFID tags to keep track of their stuff may be another possible application. Users will place RFID tags into their stuff and through a computer program they will be able to define where their products are and keep track of goods that they borrowed to other people. As chief cook robot developed in EPFL [9], applications that can be configured by programming by demonstration will be other useful and easy to use tools for end users. These robots can be used for doing small daily works of end users. 7. Conclusion This paper introduced the concept of end user programming in internet of things which is one of today s important research fields. Applications like Exemplar, Lashups and Chief Cook Robot are different examples from this field. They are developed in universities and there is still room for improvement. Involving users in product development by giving them the chance to make additions to the product will both add value to the product and lower the costs for producers. On the other hand, adding end user programmability will impose additional costs and has some cons such as detailed documentation and training will be needed and applications developed by end users may cause unexpected and unintended damages. End user programming in internet of things is open to discussion and improvement. References 1) Hartmann B., Klemmer S. R., Bernstein M., Abdulla L., Burr B., Robinson-Mosher A., Gee J., Reflective Physical Prototyping through Integrated Design, Test, and Analysis, Standard University HCI Group, Standford, USA 2) Brandt J., Klemmer S. R. Lash-Ups: A Toolkit for Location-Aware Mash-Ups, Stanford University HCI Group, Stanford, USA, ) Hartmann B., Abdulla L., Mittal M., Klemmer S. R., Authoring Sensor-based Interactions by Demonstration with Direct Manipulation and Pattern 26

27 Recognition, Standard University HCI Group and The MIT Media Laboratory, ) Riehle D., End-User Programming with Application Wikis: A Panel with Ludovic Dubost, Stewart Nickolas, and Peter Thoeny, SAP Research, SAP Labs LLC, CA, USA. 5) Wong J., Hong J. I., Making Mashups with Marmite: Towards End-User Programming for the Web, Human-Computer Interaction Institute, Carnegie Mellon University, Pittsburgh, USA. 6) Harrison W., From the Editor: The Dangers of End- User Programming, Software, IEEE, Volume 21, Issue 4, July-Aug Page(s): ) End-User Programming Homepage. 8) EUSES (End Users Shaping Effective Software). 9) EPFL Learning Algorithms and Systems Laboratory 27

28 User-Generated Content Niroshan Balasubramaniam ETH Zurich, Abstract Internet has enabled major revolutions. One of this, was to give back the power to the people. We discuss in this paper how the development of new platforms like Wikipedia or Facebook, entirely created by users, is a landmark in the world of Web 2.0, setting user-content at its core. We review the different types of usergenerated content as well as their recent evolution. We then understand how product recommendations made by consumers through user-generated platforms can enable us to make better buying decisions, notably in the frame of shops, by using the mobile interface Apriori. 1. Introduction Web 2.0 is currently one of the most widely used buzz word in the Internet industry. This term describes a new generation of web interfaces enabling users to read, share and write content over the web. User-generated content (UGC) like Facebook or YouTube are challenging the traditional media. Encarta, a private endeavor from Microsoft to build a digital encyclopedia has now been ruled out by users preferring free and open contents like Wikipedia [1]. During the Asian Tsunami in 2004, personal blogs from tourists who survived the earthquake have been able to inform citizens around the world about the happenings, faster and with more details than the websites of CNN or BBC [2]. Traditional media have found themselves losing a bit of their supremacy, losing their roles as gatekeepers of published content Internet has finally given back the power to the people [3]. In this paper, we address this new paradigm changing the consumers into creators. We will first define what a user-generated content is and give an outlook of the different types of UGC. We will then understand the different sociological, economic, legal and technological drivers that have permitted the fast development of UGC. After that, we will understand how product recommendations are being used by UGC based websites to improve their business model. We will from then on discover how Apriori, a mobile platform, and the Internet of Things, could facilitate product recommendations. We will then conclude this paper by summarizing the key points that we learnt and address the next challenges of user-generated content. 2. Defining user-generated content There is currently no standardized definition of usergenerated content (UGC). The studies on the social, economic and cultural impact of these platforms are just at their premises. The OECD defines UGC as fitting the following requirements: i) a content which is made publicly available, through internet, ii) boasting a certain level of creativity and maybe the most important point iii) contents created outside of professional practices [4]. Contrary to what we could think, most user-generated content outputs are created without expectation of any kind of profit. Nevertheless, the amount of people contributing to these platforms is growing at such a level that these latter are almost turned into databases containing an incredible rich value for companies who could use them as market-research-like data to understand the trends, needs, wills and interests of consumers [5]. People contributing to user-generated contents on the web are usually on the look for three main returns: connecting with people, a form of selfexpression and as well as to receive recognition or prestige for their work [4]. 3. Forms of user-generated content Now that we have understood the basic requirements for a web content to be characterized as user-generated content, we would like to understand the different forms that these UGC can take. This is a rather difficult and 28

29 controversial exercise as different people could group the many UGC websites into different groups depending on their own interests. It is somehow also challenging to classify the various types of UGC as these involve more and more not only one type of media or activity but several. Facebook is for example a case where people can at the same time stay in touch with people, share videos as well as create groups with information on a topic. Nevertheless, for Steve Rosenbaum from AlwayOn [6], a source of information for technology savvy consumers, we can split the world of usergenerated content in seven groups according to their main use (fig. 2). through websites like Meetup. To end this classification, we have two groups using blogs as layout, the news and the voices, mainly used to inform people. Blog news are now competing with websites like CNN or BBC and usually deliver more specific, personal and quicker uploaded news than the latter. Voices are usually famous bloggers who have become famous personalities through the web in the recent years by providing their views on political, social or economic trends. To understand the user-generated content phenomenon, it is interesting to analyze the amount of users for different websites. In Table 1, we see that the trend of UGC is generally moving towards blogs and social networks, the two most personal types of usergenerated content. It is also interesting to note that an impressive 70% of internet users are actual consumers of UGC, and this amount will be steadily growing in the next few years. Table 1: User-Generated Content Consumers (% of Internet users, source [7]) Fig. 1: The different forms of UGC (source: [6]) We first have the media websites like Youtube, where users can freely upload and share their own videos. We then have the chat interfaces to better connect with people like Facebook or Linkedin where we can even develop contact with totally new people. Then we have platforms to share personal information which targets mainly the family or friends like with Flickr where you can easily upload all your private pictures. Next, we have an industry growingly using UGC to make money, the Ecommerce platforms like Ebay. People can also meet with people sharing common and specific interests, Based on numbers from 2008, we can note the impressive amounts of people visiting famous UGC website such as MySpace, Wikipedia or Facebook. More than just purely numbers, these websites are extremely dynamic and competitive: if we compute the site analytics for the unique monthly visitors for Facebook, Google.com and Microsoft.com, we see that for the month of March 2009 only, Facebook records more than 90 mio visitors, while Google and Microsoft have respectively 140 mio and 60 mio visitors [8]. This figures are even more impressive if we consider how often one searches for information on Google.com or how established are websites like Microsoft.com. In the 29

30 last one year, Facebook boasts a 200% increase versus 5% for Google. But success does not necessarily mean continuity: Myspace, the former big star of UGC is now losing its trendy image and has lost more than 10% visitors in the last year and this decrease continues. A few numbers characterizing this glorious past are given in figure 3 from which we can understand the big change of dynamics recorded after just one year: MySpace was at that time described as the most popular and ever growing UGC website fact that is no more the case. This should be a signal for creators of new social networks. Even if the attention from massive amounts of people is rather easy to catch, it is difficult to last in this world of UGC where new ideas are popping up every day. Unfortunately, very often, these websites do not last long enough to be able to monetize and capture the value of their large pool of consumers [9]. Fig. 2: Monthly visitors of UGC websites in 2008 (source: [6]) 4. Drivers of user-generated content We have seen now the different forms that UGC could take and understood the high dynamics characterizing this field. It is of central interest to identify the different drivers which have brought us to this status enabling so many user-generated contents to blossom in the World Wide Web. According to the OECD [4], we can spot four major drivers which have shaped this change: i) Technological, ii) Social iii) Economical, iv) Legal. Technological drivers. This driver is maybe the most important of the four drivers. Broadband has rapidly been taken up by many households starting from late 90s. This has enabled users to upload and download massive amount of data. High speed internet has enabled people to integrate large videos or pictures to their websites and make the use of internet much more enjoyable and interactive. As a second step, we can note the incredible advances that happened in the hardware industries as well as the multiplication of a number of consumer electronics goods enabling people to share content ever more (digital cameras, digital video recorder, new generation mobile phones, ). Third point, maybe one of the least noticeable but the most important, the development of interfaces and online applications enabling users to create, post and upload content in a very easy and rapid way. Social drivers. A significant amount of people using internet nowadays are users that are often called the digital natives : people born with the new IT era, for whom watching TV over the internet or using MSN or ICQ to chat is simply the norm [10]. These people have substantial IT skills and are predisposed to contribute content to the World Wide Web. This younger group is also very often the most exposed category of people using social networks and following easily new trends. Economic drivers. These drivers partly follow the technological drivers. Indeed, as technology improves, internet connection or consumer electronics are affordable by a growing percentage of the population. More than that, new ideas to monetize social networks and user-generated content are pushing more and more companies to start a UGC-like platforms, enabling them a novel way to market their brands, leveraging notably on viral marketing campaigns. Examples abound but one exemplifying case is maybe the ketchup company Heinz which has recently launched a campaign to let consumers create their own advertisement, with a comfortable money prize for the best. These home-made advertisements are now being uploaded on their website as well as one Youtube where they record a significant audience. Legal and institutional drivers. This driver is key in the development of UGC as one need to make sure that 30

31 his creation will remain his, be it a luxurious painting or simply an upload of an amateur picture on Facebook. It is also a challenge as we should give property rights to creator without making it to restrictive as this would lead to a lower rate of sharing among users. A good example of intermediate solution is the Common Creative (cc) standard which requires the users to strictly mention the name of the actual creator of the picture, text or video but also let them freely share and distribute this content to any third party. We summarize the impact of these four drivers in the following scheme. could even rate the recommendations has made them ever more reliable. There are mainly two types of product recommendations: the product ratings and the product reviews. The first one is usually used to give a brief approval on the quality of a good, by giving a rating on a one to five stars scale. The second, reviews, are a tool used to give more precise and comprehensive information on the experience with this product and consist of a text of usually words. It is interesting to notice that some companies like Epinions.com, have even based their business model on these recommendations [13]. This website has indeed created a full database containing thousands of reviews and ratings of different kind of goods and services. The main interest for a potential buyer of a product would be to gather more information on the product to actual real experiences of people who are not linked to the company selling the product and thus who are unbiased. Other similar websites include hunch.com, ratings.net, reviewcentre.com, kelkoo.com and edigitalresearch.com. 6. UGC + Internet of Things = Apriori Fig.4: Four drivers leading to the current world of UGC 5. Product recommendation User-generated content are not only useful to connect with people or to share knowledge, but they have also been proven successful in driving sales, notably in the frame of e-commerce platforms such as Ebay or Amazon [11]. Indeed, one of the major challenges that these websites have faced at the beginning of their venture was to gain the trust of their consumers [12]: how could a consumer be sure that a person living 3000km away from him will indeed send the MP3 player or T-shirt he ordered? E-commerce companies have developed platforms for consumers to create content notably on recommendations of products and sellers of these products. In many such platforms, the fact that people In the frame of the internet of things, where electronic components and objects are linked by wireless connections, User-Generated Content can help as an interface between consumers and the goods that they are interested to buy. If we now consider the tens of different products for one category like olive oil or MP3 player, both boasting an incredible various range in terms of quality and price, we understand the possibilities of product recommendations as enabling the consumer to make better buying decisions. Usually, a typical consumer will not try to look for much information when it comes to but in a shop. Nevertheless, it is believed that 3 out of 4 buying decisions are made in the shop themselves [14]. Thus, to enrich a consumer s information on a product, in an easy way, researchers at ETH have came up with Apriori, an interface connecting mobile phones, the products and a database of recommendations. Mobile phones are indeed always accessible for a consumer even 31

32 in a shop and have a high penetration rate among people - usually more than 90% in big cities [14]. The program enables mobile phones, through a specific headset, to recognize the product thanks to its bar code e or in the future thanks to RFID tags. By connecting cting to Apriori, consumers can access existing recommendations on the same product, which are usually ratings rather than reviews as this tool is much more convenient for a quick buying decision. The same consumers can also submit product ratings from anywhere, enriching the database ever more (figure 5). Fig.5: Apriori enables recognition and submission of recommendation on products (source: [14]) There would be standard criteria, usually valid for most products, like the price/quality ratio, but also more specific criteria that could be added by the consumer himself like the quality of headsets for an Ipod. This would also require the presence of a moderator who, as it is done currently in Wikipedia, delete or amend non- relevant rating criteria. One potential future application would be to connect Apriori with exisiting databases such as Epionions.com, to enrich even more user experiences [14]. One can doubt in general on the quality of these recommendations and might address the issue of reliability of ratings, in the frame of a world growingly lead by companies monitoring and orchestring the image that they project. This could be prevented by leveraging other forms of User-Generated Content, the social networks. Indeed,, in the future, we might be able to filter the recommendations coming only from our close circle of friends, by for example taking the ratings coming only from people who are connected with you on Facebook. Someone who is interested in having the view of professional computer scientists on the buying of a new laptop could for example filter the ratings coming from a social network used by specialists of the field for example. 7. Conclusion Web 2.0 sets user-content at the heart of its development. From a state where creators and consumers were split into two worlds,, internet has been able to give the power to consumers to become creators. Platforms like Wikipedia are nowadays almost as trusted as professional traditional encyclopedia and proven that free did not mean poor-quality. Facebook is today becoming almost a secondd operating system, next to your first one, be it Windows or Apple, enabling you to access data, send information, to upload videos from your desktop and a growing amount of functions. Blogs created by simple persons are nowadays competing with CNN.com or BBC.com, the traditional gatekeeper of information. We have seen in this article the different types of UGC as well as the four drivers having secured the development of user contents, technological, social, economic as well as legal drivers. We have then focused on e-commerce platforms using UGC as a tool to make their services more reliable and we concluded our research by presenting Apriori, a platform connecting user-contents, mobile phones and recommendations to help consumers to make better buying decisions. It is interesting to see that all the different types of UGC, be it a simple blog or writing a complicated article on quantum physics on Wikipedia, has finally given back the power to the people. We create the world of tomorrow. Nevertheless, major challenges persist in this new paradigm, such as the level of trust that one can put on these information being written by non-professional, notably on topics like science or medicine. One can also address some privacy issuess as user-generated content is not always meant to be shared with anybody: websites like facebook or Flickr reveals very private information that is indeed difficult to control. More than that, more emphasis should be put on giving some forms of rights to the creators of UGC, through for example the common creative standard.. To conclude, this whole new 32

33 sets of social networks might have a difficult time in the future to survive and be more than a periodic trend. As we have seen in this paper, monetization of social networks and UGC is a major issue for many of these platforms. References [1] Microsoft closing Encarta online encyclopedia, March [2] Tsunami Blogs Help Redefine News and Relief Effort, January _tv_tsunami_blogs.html [3] Online Collaboration Boosts Power of the People, January [4] Web 2.0, Wikis and Social Networking: OECD study on user generated content, October 27, 2007 [5] Marketing with user-generated content, The McKinsey Quarterly, A. G. Shenkan and B. Siche, November [6] 2008, the Year of Nano-Networks [7] User-Generated Content Draws Fans. February, [8] Compete.com, April [9] Who s Worried About Facebook? Not Twitter, February [10] User-generated content drives half of U.S. top 10 fastest growing web brands. Nielsen / Netratings, August [11] Digital Natives, Digital Immigrants, On the Horizon, Marc Prensky, MCB University Press, Vol. 9 No. 5, October 2001 [12] Flaws with the ebay Trust model, November [13] [14] APriori: A Ubiquitous Product Rating System, F. von Reischach, F. Michahelles, Workshop on Pervasive Mobile Interaction Devices (PERMID) at Pervasive 2008, Australia, May

34 Monetization of Mobile platforms Avinash Vankadaru Management, Technology and Economics ETH Zurich, CH-8092, Switzerland Abstract Social community platforms had great success on the Internet and even created the term Web 2.0. Currently, some of the platforms are expanding their applications to mobile phones and other new platforms specifically designed for mobile devices allowing them to find friends, share data and do many other things by connecting to the world of internet of things. This paper will provide a characterization of Mobile 2.0 and broad classification of its present day services. Later we look into the different conceptual ways of monetizing these services with appropriate examples. This paper explains the reader about fundamental concepts present behind the business models adopted by many successful and unsuccessful companies. At the end we look at some of the challenges faced during this monetization process and finally come up with some do s and don ts before you make up your own business model. 1. Introduction Mobile social community platform in its most common usage means a range of mobile software programs often web based, which allow users to interact and share data with other users or services. The social networking phenomenon is leaving the confines of the personal computer. [1] New powerful and well connected mobile devices are allowing people to send round-the-clock updates about their vacations, their moods or their latest haircut. Mobile is going to be the next big internet phenomenon. It holds the key to greater access for everyone with all the benefits that it entails. The phenomenon of leveraging mobility and the handset to enhance user s relationships and lifestyle via webenabled communities and other two-way interactions, is fast gaining traction with mobile network operators, headset manufacturers and application developers as a way to drive differentiation and enhance user experience. Advances in operating systems, browser technology, search capabilities and user interface, have enabled high profile Mobile-Web deals. With high interest from operators in all countries and increased data usage, Mobile Web 2.0 is poised to alter the way people interact with their phone and their world. However, fragmentation in the devices and systems, combined with questions about user experience and the business models that will effectively monetize Mobile Web 2.0, has led to some serious doubts about the maturity and success of this phenomena. Looking back at the internet and social network boom, we can observe that year on year many services have vanished from the frontier because they could neither make any money out of them nor could get the critical mass required to invest further.even as of today most of the popular networking sites like Face book, MySpace, Skype [9] etc are in the red zone. As compared to the internet base application, mobile social networks and applications should be more careful regarding their products, services and their business models because Web 2.0 applications are blessed with the internet boom of 2000 s where in a vast amount of money has been invested in building up those undersea cables and connectivity, thereby making it really cheaper to use that bandwidth, so gathering a critical mass for survival has never been a problem. But in Mobile 2.0 services, it is expensive for the consumers even to send a short message [5]. So the startups should not think of building up the critical mass as done by Web 2.0 applications, but should provide useful and innovative services which can attract customers and also be able to retain them. They should go for monetization of those services from the initial stage otherwise they might not be destined to survive a longer gestation period and will soon be busted. Also choosing the business model is very crucial for the success of company and this aspect must be taken into consideration right from the beginning. 34

35 The current Mobile Web 2.0 is characterized by More and more mobile operators migrating to flat-rate pricing schemes Potential for using location based tagging To enhance user generated content identification, and community networking, development of mobile browsers and widgets to manage the web experience on the device Moves towards standardization and efforts to create a seamless web-mobile experience for long tail sites High interest in mobile advertising as a new revenue stream for users and as an effective marketing tool. Early adopters already demonstrating the potential for leveraging device features to enable on-the spot blogging. Additional characteristics of Mobile 2.0 in the future, Making use of new sensor technologies (accelerometer etc) that will be adopted by mobile phones in the future and connecting to the Internet of things. Mobile phone will be the first computer accessed by rural population in most of the countries and these services will help the internet penetration there by increasing the productivity. 2. Monetization This paper will give a brief insight into the different possible conceptual ways of monetizing these platforms. They are defined as below a) Consumers pay b) Companies sponsor c) Advertising d) M-Commerce Almost all the new innovative ideas used by any of these Internet and mobile startup firms fall under either one of these categories. Many new services are using a combination of these ways, in order to make it more effective and it also seems working on the ground level Consumers pay In the real world consumers paying for the resources they utilize is quiet normal, but in virtual world this is more or less a taboo till now for most of the stakeholders. The companies should be really convinced of their services in order to make the consumers pay, because most of the consumers take it for granted that anything related to Internet is for free. But when used smartly using solid products and services this method can reap great benefits and provide the companies with a steady flow of revenues in regular periods, which improve the sustainability of such services over a long term. The most common tool used under this method is Subscriptions. Several companies like LinkedIn, Last.fm etc use it by offering premium services to people who are willing to pay for them. This goes along with Chris Anderson s Freemium concept [2], wherein he proposes that a minority of people pay for the majority of the people, thus the company can get a steady source of revenues and can also create a huge customer base surpassing the critical mass, so that they can reap enormous profits from the traditional advertising. For services like mobile TV, live video broadcasting on mobile phones, tools like Pay per view or Pay per minute can be used which allows the user to acquire these services only when they need it, thereby giving them more freedom, and also help these companies to use their resources in a much more optimal way. A service like live video streaming using mobile phones offered by companies like Qik etc, can be offered to broadcasting companies (both print and TV) and other professional services. The growth rate of smart phones in US during 2008 has been around 75.7% [6] and it has been the same trend all over the world. We can make use of this increased processing power and innovative hardware features to provide them with new applications and widgets at a premium price. Device and OS specific manufacturers had already jumped into this bandwagon by creating services like App store for Iphone, Ovi store for Nokia, Android market, Windows market place for mobiles, App catalog for Palm pre and Blackberry App world for Rim phones. Considering the growth rate of such devices and take into account the idea that mobile web will become the dominant access method in many countries of the world these services has enormous potential and the market research data shows that consumers are also willing to pay for them. Information services that can be directed to an external service company or the mobile operators can induce people who are handicapped of using such applications because of reasons like lack of broadband penetration, illiterate, mobile devices with stripped of features etc, thereby providing them with another source of revenues. Location based services will revolutionize the way we use our mobile devices and new social algorithms will have to be created to garner its 35

36 complete potential. The geographical information is considered as productive by consumers and are willing to pay for it [3].Data and Bandwidth transfer will also provide revenues for the mobile service operators and they can collaborate with third party application developers by profit sharing in order to optimize their revenues and bring in more people into their mobile service, which can create a network effect and indirectly impact its sales revenues in a positive way Companies Sponsor The recent trend has been that companies are sponsoring some these applications and services for their own conceived interests. Application content integration is the biggest way in which companies are sponsoring. An ice cream popping game for mobile phones made by EA sports, featuring ice creams from Moven-pick is a perfect example for this. Tracking and building social media metrics will provide most of the fast moving consumer goods (FMCG) companies a strong edge over their competitors. Since these days mobile phones are considered as an extension of our self, there can be no better device that can collect contextual data and create a broad social metrics providing some useful consumer information for the real world companies. Similar to this is On-site web analytics which measures the performance of your website in a commercial context combined with other LBS helps the companies in organizing their resources in an optimal way. Also companies would like to have two-way communication with its customers i.e. Feedback, complaints etc, and those services which allow the consumers to have a two way contact will be promoted by the companies, for the better utility of both the parties involved. Custom build social applications [7] and its distribution is an other way through which companies market themselves and introduce new products for its potential target base. With the advent of sensor technologies being inducted by manufacturers into mobile phones, more specific information like time slept, the surrounding atmospheric conditions, physical body movements, etc about the customer can be transmitted to the companies in order to create customized products which increases the ROI for them. The most potential source of revenues I consider for these mobile platforms is targeting real world companies and providing them services using the internet of things and helping them to differentiate themselves from their competitors who could reap heavy benefits for all the parties involved i.e. customers, application developers, hardware manufacturers, companies etc. For examples some of these services can be like your car talking with your mobile phone regarding the air pressure in the tires, gasoline level and the nearby gas stations talking with your petrol tanks and mobile phones, a network of automobiles connected to a virtual social network via their mobile phones and transponding information regarding climate and traffic conditions and so forth.. The possibilities are enormous and can only be bounded by imagination. So being able to provide such unique and productive services along with their products will allow the companies to differentiate from their competitors Advertising It has been the traditional way of making money out of many of these Web 2.0 applications and has been successful to some extent with new approaches like ad sense, ad words etc, but blindly following those approaches on the mobile platforms, will not help your cause. The reason why we think Advertising can provide substantial revenues because of the ergonomic factors associated with mobile devices. The screen is limited [8], and any advertising in all its probability is bound to attract the attention of the consumer. In addition to this rather than dumping clinical ads on to the consumers irrespective of the situations which finally turn out to be futile, it would be very productive if this advertising can be made contextual thereby making it more useful for the customers [4]. It s a translation of Google s online virtual world strategy into the real world, using mobile phone connected to the world of internet of things. Again advertising by itself will not get revenues, but in conjunction with any of the methods stated above can be very effective way. Also as in the Web 2.0 services, you don t need a critical mass on the mobile platform to secure ad revenues. Interactive advertising is a type in which the consumer is involved in the campaign either physically or virtually. With the help of mobile platforms, now it will be possible to make the consumer involve physically and mentally with this mode of advertising, thereby increasing his curiosity. Display advertising is the most common mode but if done in combination with other methods, will be more successful.direct marketing and discount coupons can be more arable because of the contextual nature of the mobile phones. A beacon placed at the entrance of a retail showroom, sends you a message regarding new brand lines or individual discounts when you go pass through that shop in the same lane. Its impact is two way i.e. both on customer and showroom. Google tremendous success is integration of search engines and advertising. Similarly if contextual advertising is integrated into the physical world, the benefits are big. 36

37 2.4. M-commerce In simple terms Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device or data transfer. This is the old new buzz in the town. The concept of using mobile phone in place of credit cards and hard cash was pushed long ago, when neither of such services nor the consumers were matured. But with the new technological developments both in hard ware and software specifications, the concept of Mobile commerce has come into tune once again. The different payment methods used to enable M- commerce are Premium-rate calling numbers, Charging to the mobile telephone user's bill or Deducting from their calling credit Registration of a credit card that is linked to a SIM card. Using encrypted microchips capable of data transfer Services like Mobile banking, Mobile ticketing, money transfer, Mobile payments, content purchasing, Mobile purchasing will have a huge influence on the means by which we do our day to day trivial commerce, and when summed up will become a big source of revenues for mobile platforms. 3. Challenges & Conclusion All said monetization of mobile platform is not as easy as it seems, because of its unique characteristics. There is huge population which is not yet in the reach of these services [10]. Excess of players is a critical challenge that everyone faces because it is very easy to duplicate any new service and only requires limited resources in the initial stage, thereby denying the rightful owners their due share. Privacy is main deterrent for the free flow of any of these services and concerns over it mount as the developers move in. Ergonomics of mobile phone devices is also reasonable for the slow growth of such services, and this can be overcome by new input techniques [11], additional features and design changes is the software applications which makes the life of the user more comfortable. As the marketers move in the customers move out, and this phenomenon has repeated itself in our past experiences. So the arrival of such people should be finely integrated into the services. In case of mobile community platforms the social network fatigue may soon creep in, thereby gradually decreasing the footprint of the consumers which will impact the advertising revenues, this can be overcome by constantly innovating your services and inducing your customers towards this platform for a more productive purpose. The rate and intensity at which the Mobile phones are integrating into our daily life provides entrepreneurs with enormous potential for providing products and services which were not even dreamt in the past by common man. Mobile communications has already changed our social behavior and be ready for many more surprises in the future.amt in the past by common man. Mobile communications has already changed our social behavior and be ready for many more surprises in the future. Findings of some studies states that the features added so far to mobile platforms are not considered to be adding value and useful by the consumers rather they are perceived as gadgets. This brings us to the basic and essential marketing concept that enterprises initially should try satisfy the needs of the customer and then the revenues will automatically flow. It is a futile attempt trying to create a unique business model for a service which is either not wanted by customers or way ahead of its time. The most important issue that the corresponding parties involved must consider are the human and social dimensions and these amazing opportunities would turn sour if the mobile platforms are only seen through the economics and technical lenses. Finally I would say that there is no single way to secure your revenues, it should always be a combination of different broad ways as stated above and the business model should be appropriate to the service you provide. Traditional approached will not solve your problems and you should tweak many of those methods to suit your service but at the same time you need not reinvent the wheel. 4. References [1] Richard Han and et al, WhozThat? Evolving and ecosystem for context aware mobile social networks, IEEE Network, August [2] Freemium concept by Chris Anderson [3]Bharat Rao, Louis Minakakis, Evolution of Mobile location based services, Communications of the ACM, Pages 61-65, December [4] Pieter Ballon, Nils Walravens, Antonietta Spedalieri, Claudio Venezia, An Advertisement-based 37

38 Platform Business Model for Mobile Operators, 12th International ICIN Conference, October 2008 [5]http://en.wikipedia.org/wiki/Short_message_service [6]http://www.mobilemarketer.com/cms/news/research /2323.html, IDC [7] [8]http://sender11.typepad.com/sender11/2008/04/mob ile-screen-s.html [9]http://wapedia.mobi/en/Facebook [10]http://www.dri.co.jp/auto/report/rncos/rnruralindm ob07.htm [11]www.wiwi.uni-due.de/fileadmin/fileupload/I- PERVASIVE/mobilehci/01_MobileTextEntry_Scott- MacKenzie_mobileHCI2008.pdf 38

39 Business Aspects of the Internet of Things: Mobile Marketing Gilad Geron Swiss Federal Institute of Technology Zürich, Department of Management, Technology and Economics, Abstract As the development of mobile phones advances, new technologies are introduced to the users allowing them to communicate and interact with their peers in new ways. These new ways of interactions are viewed as a great potential for marketers, who can now target their audience with more precision and with more attractive and interactive contents. This paper aims to examine mobile phones as a marketing ground and how the emergence of new technologies, such as social networks, will affect the future of advertising. 1. Introduction In the past, marketeers have used mass media mediums such as newspapers and television as their major channel for reaching large audiences. At the time, this approach had effective returns on investment because there were only a limited number of television channels and newspapers. However, these days, there are hundreds of television channels, which means that viewers are more scattered and the number of viewers per channel is smaller. This makes it more difficult to target a large number of viewers and therefore reduces the efficiency of advertisement campaigns on television. Moreover, according to Newspaper Association of America, there is a decrease in newspaper advertisement expenditure and an increase in online newspaper advertisement,[4] which may suggest that consumers are shifting their preferences towards digital sources of information (perhaps because the information provided digitally is updated at a much higher frequency). The changes which are occurring to the traditional mass media mediums require the conventional marketing strategies to adjust. The marketing world is in transition and mobile phones are becoming more and more the center of attention. The purpose of this paper is to explain why mobile phones are becoming increasingly popular and to analyze the latest trends of mobile marketing. Before diving into the concept of mobile marketing, we will briefly define a couple of general terms of marketing. Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.[2] Marketing can be divided into 2 categories, push marketing and pull marketing. Push marketing is where the marketeer pushes promotional information or product to the audience. Pull marketing on the other hand, is where the marketeer generates customer interest to pull the promotional information. Mobile Marketing is defined as the use of the mobile medium as a communications and entertainment channel between a brand and an end-user.[9] Mobile marketing can be used for various purposes, such as: Communication channel - Using the phone s communications capabilities in order to transmit promotional information to target audience. For example, a brand may choose to notify its customers about the release of a new product by sending them an SMS or MMS message with the promotional information. Purchasing channel - Allow customer to carry out monetary transactions through the use of a mobile phone. An example of this channel is the use of a mobile phone to pay for merchandise or transfer funds from one person to another. Relationships channel - Allow brands to build and maintain a relationship with their customers. For example, a brand may offer a customer care chat service through SMS or through mobile internet. Delivery / distribution channel - Delivering a service to the customer by using a mobile phone. For example, a customer may choose to purchase a cinema ticket and receive the ticket on his mobile phone. 39

40 Usage medium - This is an emerging aspect which is related mostly to smart phones. It involves using the mobile phone as one would use his personal computer. With the constant improvements in storage space and computing, mobile phones are becoming more and more like pocket-sized computers. An example of such usage is the downloading of novels onto the mobile phone. Entertainment channel - Offering customers entertaining materials such as mobile games, music, movies, ringtones and alike. 2 Background At the end of 2007 mobile marketing expenditure was estimated to be around 3 billion dollars. By the end of 2011 mobile marketing expenditure is expected to reach 19 billion dollars[7] and over half of brands are expected to spend between 5% and 25% of their total marketing budget.[3] These predictions show that companies consider mobile marketing to take an important role as part of their marketing strategy in the upcoming years. There are many reasons why mobile phones are becoming increasingly attractive for marketing purposes. One of the main reasons is their popularity. The number of mobile phones users is rapidly increasing and is estimated to have reached a staggering 4 billion users by the end of 2008, which is equivalent to roughly 60% of the world s population.[1] This fact by itself is enough to make mobile phones extremely desirable for marketeers, however, the real attraction lies in the characteristics of mobile phones. One thing which sets apart mobile phones from other mass medias is the fact that they are always turned on. Moreover, people tend to be engaged to their mobile phones in the sense that they carry their phones with them everywhere they go. This means that theoretically, the audience is reachable at all times. Mobile phones are considered as the first so-called private mass media and the second interactive media (the first is the internet).[10] What makes mobile phones so personal is the fact that all of one s information is stored on it, such as all their friends and colleagues contact information, as well as all messages and communication records they had with their peers. Mobile phones are so personal, that a Wired survey carried out in 2006 has revealed that 60% of married couples will not share their phone with their spouses.[10] This means that the accuracy in which marketeers can target their audience is extremely high, as we know exactly who is using it. Figures suggest that the accuracy of tracking audience on mobile phone is as high as 90% compared to 10% and less than 1% on internet and television respectively.[10] Due to the fact that personal computers are less abundant than mobile phones (one personal computer per household versus one mobile phone per person) makes it harder to identify the real user and his behavior. Although television sets are more abundant than mobile phones, television is even less accurate media because it is practically impossible to identify who is watching the television at any given time and rely on polls in order to make estimates, which do not necessarily portray the customers real behavior. With mobile internet, every click that the user makes is sent directly to the provider and therefore can be tracked with extreme precision. For the reasons explained above, marketeers view the accuracy which mobile phones offer as a gold mine for marketing. Privacy issues in this field are very controversial and could be discussed at great length. In this paper, we will simply assume that the users are fully aware that they are being monitored and have given their consent. To put a cherry on top of the marketing heaven that mobile phones offer for tracking customer behavior, they also offer with pinpoint accuracy not only what the customer is doing but more importantly from where and when. This is the only media which can offer such vital information. Being able to know where the customer is at all times, has given birth to location based services. In mobile marketing, location based services applications are advertising or marketing services that use specific location information for delivering the right message to the right person at the right place AND time.[5] Examples of location based services are: requesting the location of a nearby business or service, receiving a step-by-step instructions on how to get to that location and being notified when approaching a certain location and/or person. These services give businesses a great channel on which they can communicate their location and offer real time information to the users. Mobile phones have many built in sensors which could be used to enhance location based services accuracy and experience. For example, the built in camera of the mobile phone can be used together with an image recognition software in order to create an interactive, real-time tourist guide. In the future, we can expect to see location based services becoming more sophisticated and using more and more sensors, allowing marketeers to target their audience with more precise and interactive content. 3 Mobile payments Another characteristic which makes mobile phones attractive is the fact they have built-in payment capabilities. Over 12 million consumers in Japan alone are using mobile payment and more and more shops, kiosks and metro stations are getting equipped with mobile payment capabilities.[13] In South Korea all credit card companies enable their credit cards on the customers mobile phone by default and offer to send an old fashioned credit card by 40

41 mail if the customers request so.[10] Many mobile phone companies are now developing various technologies that could facilitate the mobile payment process. An example of such technology is Near-Field Communication (NFC), where a device can read data through radio signals when coming in close range with an NFC tag that stores the data. As these technology is still under development, we are still to face just how big this market will become. In the future mobile phone will have an immense impact on the way users shop and pay for their commodities. One could argue that the days of the wallet are numbered and that it is a matter of time before the e-wallet replaces it. Even though the adoption rate of mobile payment is rather high, it remains to be seen whether it could replace todays conventional payment methods. 4 Mobile Applications and Entertainment stores The release of Apple s iphone had a significant impact on the way people viewed smartphones. Before its release, smart phones were rather sophisticated to use and were targeted mostly at business people as their main audience. Apple has managed to change this perception by providing a user-friendly interface and an attractive design and focused mainly consumers. Apple has also released the AppStore, which is an electronic market place where third-party mobile applications and games can be sold. The user may browse through the store and with a few clicks download the desired application or game directly onto his mobile phone. In the first month of its release, Apple has sold an average of $1 million a day in applications, totaling to about $30 million.[15] This was a wake-up call for many companies, who have seen the true potential of smart phones. For example, search-engine giant Google has released its own mobile phone operating system known as Android and the Android marketplace, which have very similar characteristics to Apple s iphone operating system and AppStore. Other smartphone platforms, such as Symbian and Windows Mobile are also expected to come out with similar services in the near future. We will examine the pricing-model of the AppStore (other marketplace use very similar pricing-models). The way these digital marketplaces work is the following. A developer for the iphone has to pay a one-time license fee in order to be able to run his developed applications on his iphone. When the application is ready to be published, it is sent to Apple who checks the integrity of the application and determines whether it brings added-value to the iphone and approves or disapprove the application. Once the application is approved it can either be published free of charge on the AppStore, in the case where the application is given away for free. Alternatively, in the case where a developer decides to charge for the application, Apple takes 30% commission for each transaction made by the user. This is a win-win situation for both Apple and the developers. Apple benefits are two-fold. Firstly, for each application which is released, the value-added of the iphone increases and therefore becomes more attractive to potential buyers. Secondly, they make big revenues from operating the marketplace. For developers, Apple offers a cost-effective solution for sales and distribution of their software to millions of users. Since developers revenue is proportional to the amount of units of software sold, the software which is directed at consumers is designed to be more attractive to the user and contains more interactive interface in order to maximize their profit by attracting the biggest amount of consumers possible. Due to the popularity of these marketplace platforms, many brands nowadays, offer free software and advergames to promote brand recognition and customer engagement. Advergaming is an immersive mix of advertising and entertainment that takes the form of video games.[12] Successful advergames are likely to cause word-of-mouth effect, where happy gamers tend to recommend the game to their peers and therefore advertise the brands further. The mobile entertainment industry is not limited to games and software. Mobile music and videos are also a big source of income. In 2006, mobile music generated over 8.8 billion dollars[10] and is projected to reach 14.6 billion dollars by 2013.[16] Moreover, ringtones are said to make up to 10% of the music industry revenues worldwide. These confounding figures, emphasize the potential of mobile phones as mobile entertainment devices. As mobile internet connection become faster and the subscription fees become flat, it is likely to see companies providing full videos delivered directly on the clients phones. 5 Mobile Internet Mobile phones have now surpassed personal computers not only in number, but more importantly in accessing the internet. There are 405 million mobile internet users and these numbers are expected to double by 2013, according to emarketer.[6] Big internet advertisement companies, such as Google, are now rushing to mark their territory and grab their share of the mobile internet market by using similar technology to the technology they offer on normal internet. There are some differences in the behavior of mobile internet compared to normal internet users. These are mainly due to mobile limitations such as internet speed, internet compatibility limitations and screen size. Mobile internet users have a more direct approach to internet and will normally use it for rather short periods of time in order to fetch important information that they desire to have on the spot. Due to these limitations, mobile marketeers need to create advertisements which do not interrupt the user yet attract 41

42 his attention. Therefore there is still no common method for advertising on mobile internet, however, due to the growing market size it is just a matter of time before a norm will appear. Mobile internet is not the only aspect of the internet which is advancing. Web 2.0 is considered as the second generation of the world wide web and came to light around the year The Web 2.0 concept is based on smooth, interactive interfaces, easy communication, secure information sharing and most importantly collaboration on the internet. Web 2.0 encourages people to find, share and produce information on the internet in order to maximize user experience on the web. People can share photos and videos and make them accessible to anybody in the world, and with the help of a mobile internet, from anywhere in the world and at any given time. Web 2.0 lets people create their own identity on social network such as Facebook. Facebook is a platform where users can create friends and groups of friends and share information between them. The users identities can be monitored and their behavior can be analyzed to provide the user with appropriate products and services. For example, if a user belongs to a group for weight watching, it is likely that he would be interested in related products and companies could advertise accordingly. In addition there are social shopping sites, where a user can recommend to his peers products and services which he likes. The user can create himself a reputation by getting reviewed by his peers who may deem the information provided as useful or not. Users with an extremely high reputation can be considered as Alpha Users. The Alpha User is someone who loves to communicate with everyone and keeps the social group connected and informed. The Alpha User is also earlier in adopting most products and/or services than the peers on the same social network.[14] Once identified, Companies may decide to sponsor Alpha Users and therefore letting them do all the advertisement, which will then trickle down the rest of the network. Another important thing to mention with social networking is that we can measure what we consume but more importantly with whom we consume it with. This is a very important piece of information as we know not only the size of the audience but also their association with one another. Companies may analyze the group behavior and therefore adjust their marketing campaigns in order to maximize their efficiency to the particular target groups. 6 Pervasive Advertisment Pervasive advertisment is a special case of mobile marketing, where the scope of mobile devices extends to things or pervasive computing objects. The principle behind pervasive computing is the opposite of virtual reality. Virtual reality attempts to bring the person into the virtual world, whereas pervasive computing brings in virtual components and integrates them with the real world objects. An example of such a device is Microsoft s Surface.[8] Microsoft Surface is a computing platform with a large interactive touch screen in the form of a table. This platform can recognize and access mobile devices when they come near it. Data stored on mobile devices (such as music, videos, photos, documents, etc...) can be viewed and manipulated on the Surface and transfered from one device to another with a simple drag-and-drop action. The ability to dragand-drop content to and from devices with such facility is a great advantage for marketeers. For example, a coffee house may adopt these smart tables and increase the value-added of its services by offering its clientele a new way of interacting and sharing with one another. The coffee house can also incorporate advertisements and promotions in the software of the table to increase brand recognition and sales. Similarly, this type of technology could be integrated into a smart billboard. The obvious advantage these billboards have over traditional billboards is that they offer digital advertisement which is more attractive. A billboard may show a promotional video or offer digital coupons with GPS coordinates to all stores that offer the promotion, which can be easily dragged-and-dropped onto mobiles. The billboard advertiser can charge the companies on a per-dowbload basis. The beauty of this form of advertisement is the fact we can monitor all interactions with the billboard and build a preferences profile for each mobile phone (we may not know the identity of the owner, but we can see what he likes according to the content he downloaded). This information can be very useful to both the smart billboard advertiser and the companies using the billboard services. Since we know where the coupon was picked up and where it was used, we can monitor how effective each individual billboard is in real time. This gives leverage to the advertiser, who can therefore charge extra fees for this information. The marketing teams of the companies get more accurate feedback, which in turn can help them improve their marketing efficiency. To take this concept a step further, the billboard advertiser can make its services location aware. By using the preferences profile, the advertiser could target its advertisement more accurately at the audience in the proximity of each billboard. For example, if the majority of the people around a certain billboard have downloaded on their phone a promotion for product X, then show an advertisement of product X. This is just a simple, straight-forward solution and more complex algorithms and artificial intelligence could be applied in order to determine which advertisement should be showed at each scenario more accurately. Another use of location aware billboards is to offer a guidance service to the store of a certain coupon. In other words, let us imagine that a person enables the guidance option on 42

43 his mobile coupon. When he approaches a location aware billboard, the billboard should say for instance: walk 100 meters in this direction. This way the environment around the user changes as he walks through the streets and guides him towards the store. These are only a few examples of potential uses of pervasive computing devices and goes to show just how potent pervasive advertisement can be when used alongside mobile phones. 7 Conclusion Since its invention, the mobile phone has evolved tremendously. The fierce competition in the mobile phone industry has led mobile producers to encapsulate more and more features and gadgets with every product cycle. Mobile phone are becoming smaller and more powerful. Clearly, the point where a mobile phone is used solely for making phone calls is ancient history. Nowadays, the mobile phone has become so advanced that it incorporates pieces of all of its mass media predecessors namely, the print, the record, the cinema, the radio, the television and the internet.[11] As each media was considered more powerful than its predecessor, the mobile phone is no different especially since it uses the other mass medias and can take advantage of all of their positive characteristics. With its wide reach, its fast adaption growth rate and its high level of interactivity, there is no doubt that the mobile phone is the dream device for marketeers. The options and opportunities for advertising are countless. In the future however, we can expect mobile phones to not only mash-up with hardware but also with software. As mobile phones have increasing computing power they will continue to join together different hardware, software and mass medias. For example, imagine a phone application which uses its phone s camera together with barcode recognition software to read a product s barcode then connect through mobile internet to a social network where users compare prices and reviews about the desired product. The result is a mobile social commerce and review framework.this application takes advantage of the phone s computing power and imaging capabilities as well as profiting from the advantages of web 2.0 and social networks / commerce. From a marketing point of view, this is an entirely pull marketing strategy and unlike other pull marketing strategies, it requires very little investment from the company s behalf. Given the immense power of social networks, it is likely that we will see social mobile marketing becoming popular. Despite the popularity of mobile phones, it is very unlikely that mobile marketing will force other forms of marketing to disappear. Mobile marketing will become more main stream but marketing in newspapers and other medias are still effective. Perhaps other mass media forms will be used to increase customer knowledge about mobile services. With their versatile capabilities, mobile phones can be used as a binding link to connect between reality and digital world. Using different technologies (such as, NFC, barcodes, wireless networks, GPS, image recognition software), real world tags can be linked to digital tags and therefore offer consumers a greater added value. Pervasive computing devices give us a glimpse into the digital world through everyday objects and allow us to interact with the digital world with extreme usability. As computing units become smaller and cheaper it is likely that more and more objects will become smart and incorporate computing chips in them, enabling new forms of interactions (and thus marketing opportunities) between mobile phone users and the environment. References [1] S. Acharya. Worldwide mobile cellular subscribers to reach 4 billion mark late newsroom/press_releases/2008/29.html, September Accessed on the 28th of April [2] American Marketing Association. Dictionary. Dictionary.aspx?dLetter=M. Accessed on the 20th of April [3] Cambridge Marketing colleges. Mobile marketing. 20MobileMktngMaster.pdf, May Accessed on the 26th of April [4] ComCorp. Increase online newspaper ad results to decrease on print ads. http: //www.comcorp.com/articles/news/ increase-online-newspaper-ad-results-to -decrease-on-print-ads/, September Accessed on the 25th of April [5] L. Fields. Location based services a marketers dream. articles/location-based-services-%e2% 80%93-marketer%E2%80%99s-dream. Accessed on the 28th of April [6] Google. Google adwords - google mobile ads. services.google.com/adwords/mobile_ads. Accessed on the 28th of April [7] D. Halperin. Mobile marketing and advertising to be worth $3 billion by 1q 2008, says abi research. google/ /en, April Accessed on the 28th of April [8] Microsoft. Microsoft Surface website. microsoft.com/surface/. Accessed on the 22nd of May [9] Mobile Marketing Association. mmaglobal.com/wiki/mobile-marketing. Accessed on the 28th of April

44 [10] A. Moore. Mobile phones as mass media: Models for content distribution - part 2. masternewmedia.org/media/mobile-phones/ mobile-phones-as-mass-media-white-paper -part htm, July Accessed on the 28th of April [11] A. Moore. Mobile phones as mass media: The upcoming technological revolution - part 1. masternewmedia.org/media/mobile-phones/ mobile-phones-as-mass-media-white-paper htm, July Accessed on the 28th of April [12] L. Obringer. How advergaming works. howstuffworks.com/advergaming.htm. Accessed on the 28th of April [13] W. Turler. Votre téléphone: bientôt un porte-monnaie. artid=2078, may Accessed on the 28th of April [14] C. Valdecantos. Are you an alpha user? http: //consultantvalueadded.com/2008/06/19/ are-you-an-alpha-user/, June Accessed on the 28th of April [15] WallStreet Journal. Iphone software sales take off: Apple s jobs. SB html, August Accessed on the 28th of April [16] M. Walsh. Mobile music revenue to reach $14.6 billion. February Accessed on the 28th of April

45 Why Mobile Payment still has some way to go in Switzerland Stefan Wengi Department of Management, Technology and Economics Swiss Federal Institute of Technology (ETH), Zurich, Switzerland Abstract In 1998 first trials for mobile payments at a Coca Cola vending machine were done in Finland. Although the proliferation of mobile phones has been unprecedented in subsequent years and although mobile payment is often considered being a killer application, mobile payment is still a niche player at least in the Swiss market. This paper provides an introduction to mobile payment focusing on NFC based approaches. Using an analysis of the stakeholders it considers their different agendas and explains why mobile payment still has some way to go in Switzerland. Some possible deployment scenarios round up the analysis. 1. Introduction According to [1] mobile payment can be defined as payments for goods or services initiated, authorized or completed from a mobile phone or similar device. For more than 10 years there have been predictions that mobile payment is basically just around the corner. Except for some countries in Asia (and lots of trials around the world) [2] these predictions have not become reality yet. In particular the situation in the Swiss market still seems to be quite difficult since there is no clear path of deployment on the horizon yet. This paper tries to shed some light on the various aspects of mobile payment. It focuses on the stakeholders with their different agendas and tries to deduce some reasons for the delays in the deployment of mobile payment in Switzerland. The paper is organized as follows: In section 2 we take a look at different mobile payment scenarios. In section 3 we explain Near Field Communication (NFC), which lies at the heart of proximity mobile payment. In section 4 we describe the topic of NFC payment systems and procedures. Section 5 provides an analysis of the four major stakeholders. In section 6 we consider delaying factors for the deployment of mobile payment in Switzerland. In section 7 we sketch 3 scenarios for deployment and in section 8 we draw our conclusions. 2. Mobile Payment Scenarios Complementing the definition of mobile payment in [1] the Smart Card Alliance [2] further distinguishes between remote mobile payments and proximity mobile payments. The most obvious differences between these two kinds are speed, convenience and the fact that proximity payment can use the existing payments processing infrastructure [2]. Kreyer et al. [3] proposed four types of relevant mobile payment scenarios out of which mobile commerce (MC) and stationary merchant (SM) are the most prominent ones that also promise a real improvement in customer value. Combining proximity and remote payment with the mentioned scenarios we end up with a classification scheme as depicted in figure 1. Figure 1. Classification Scheme The relative attractiveness of the four combinations presented in the classification scheme largely depends on today s payment infrastructure in an economy. In emerging markets where the proliferation of automated teller machines (ATMs) and point of sale (POS) systems supporting cards is still relatively sparse people are already using remote payment schemes e.g. 45

46 based on SMS. However in countries like Switzerland these remote payment schemes seem not to be very attractive compared to the existing methods of payment. As an example paying for parking with the service offered by PostFinance and epark24 requires dialing a phone number and performing 4 steps of entering data on the phone s keypad [4]. Given this reasoning and given the fact remote payments can somehow be considered as a technical fallback for proximity payments the remaining parts of this paper are focusing on proximity mobile payment. Proximity payment using an NFC enabled mobile phone (see below) can be as simple as touching a designated area on a vending machine and pushing one button to authorize the transaction with the amount shown on the phone s display. 3. Near Field Communication (NFC) In order to grasp the potential of proximity mobile payment a basic understanding of Near Field Communication (NFC) technology is essential. NFC is a short-range, standards-based wireless connectivity technology based on radio-frequency identification (RFID) that can be used for proximity communication over a distance up to about 20 centimeters [5]. Currently transfer rates of 106kbit/s, 212kbit/s and 424kbit/s are offered with higher rates being expected in the future. When two devices communicate using NFC one of them must act as a reader/writer while the other then behaves like an NFC tag comparable to an RFID tag (chip containing some data and connected to an antenna). The NFC forum that at the end of 2006 had over 80 members from industries such as mobile device manufacturing, infrastructure and technology vendors as well as payment providers is publishing standards in the area of NFC. Standards from ISO, ECMA and ETSI form the foundation of NFC specifications. In particular NFC is compliant with ISO the main international standard for smartcard interoperability making it possible for an NFC tag to act like a contactless smartcard. Envisioned applications of NFC do not only include payment but also things like ticketing, peer-to-peer communication or service initiation e.g. employing smart posters or product packages in stores. The main attractiveness of NFC in these fields of usages comes from the fact that people can use a simple act of touching or placing their device close to something in order to initiate a desired service. Since the bandwidth of NFC is comparably low many usage scenarios employ it for conveniently initiating communication. Thanks to the proximity requirement this initiation process can cover various security aspects like authentication or authorization. For transportation of the actual workload the communication peers can then switch to a faster communication method. The availability of mobile phones with NFC capabilities is still relatively low. However according to sources on the Internet [6] vendors like Nokia, BenQ, Motorola, Samsung and Kyocera are offering NFC models today already. It is important to note that in addition to mobile phones many other devices like cash registers, other POS equipment, ATMs, posters, bus stops, vending machines, parking meters, entry systems and product packages are foreseen to become NFC enabled. Industry players like Innovision [5] expect the first mass-market adoptions of NFC technology in relatively low-financial value applications that build on existing payment and communications infrastructure thereby not requiring large investment in new back-end infrastructure. 4. NFC Payment Systems and Procedures Today there are four main systems of payment being supported and used in Switzerland: (1) cash (bills & coins), (2) debit cards (Maestro & Postcard), (3) credit cards (MasterCard & Visa) and (4) Maestro ecash. From a technology point of view all their usage patterns can be supported by mobile payment systems based on NFC. These systems can be classified according to the amount being paid (micro vs. macro) and the NFC role of the mobile device (tag vs. reader/writer). For our analysis we are selecting 2 plausible setups: (a) micro, tag and (b) macro, reader/writer. System (a) can be thought of as a competitor to cash and Maestro ecash. The human interaction on the mobile phone is reduced to a minimum and the NFC chip is working in tag mode e.g. containing some preloaded amount of money from which the charge is being deducted. Simply touching some reader area with the mobile phone and pushing a single button (e.g. for activation) performs payment. In the case of system (b) the mobile phone acts as some sort of terminal communicating with the POS infrastructure in reader/writer mode. The amount to be charged is read from the POS and the user can interact with the phone e.g. choosing options or authorizing payment. So far we have looked at the process, as it is perceived from the customer perspective. However this is only the tip of the iceberg because for all non-cash 46

47 payments there is a need for quite complex (back-end) systems making it all possible. In general the following processes can be identified: (1) issuing, (2) authorization, (3) batching, (4) clearing/settlement and (5) funding. In addition there are many supporting processes like renewal, replacement, chargebacks, services for merchants etc. Figure 2 shows a version of a credit card payment process illustrating the flow of transaction data and money (source: apacs.org.uk). For simplicity reasons the settlement between the cardholder s and the retailer s bank has been omitted. Figure 2. Credit Card Payment Process In principle today s back-end systems could also be used for processing mobile payments. However mobile payment is adding new stakeholders (e.g. mobile operators) and some complexity to the provisioning process. The variety of mobile phone form factors and the fact that personalization needs to be done when the phone is already in the user s hand are the two main issues that need to be addressed in provisioning In order to do that some services for provisioning and personalization over the air (OTA) have been developed. These OTA services mandated the introduction of a trusted service manager (TSM) who will be aggregating the applications from different service providers and perform card management and provisioning of secure elements to the mobile devices. On the handset itself it is of importance where sensitive data like payment credentials or even applications are being stored in order to protect their integrity and confidentiality. Three potential storage locations are proposed by the SmartCard Alliance [7]: (1) a secure element embedded in the handset, (2) a memory card (e.g. a minisd card) or (3) the SIM card. 5. Stakeholders In comparison to established payment systems the set of stakeholders significantly grows when talking about mobile payment. The following two tables list the stakeholders as identified in [2] completed by banks as one important stakeholder that was left out in there. The stakeholders colored in green are basically those dominating today s payment infrastructure. Table 1. Traditional Payment Stakeholders Stakeholder Role Consumers Using the mobile payment devices Issuers Issuing mobile payment capabilities Merchants Accepting mobile payments Acquirers Supporting merchants acceptance of mobile payments Payment networks Setting standards and promoting acceptance by all parties throughout the network Issuing and Processing payments acting on acquiring payment behalf of acquiring and issuing processors banks Banks Providing customers with accounts and the ability to transfer money between them Table 2. Additional Payment Stakeholders Stakeholder Role Mobile network Ensuring a supply of mobile phones operators (MNOs) with NFC capabilities and supporting payment services on their networks Chip and handset Supporting branded financial manufacturers applications SIM/payment Providing branded financial software developers applications Trusted service managers (TSMs) Proprietary payment application providers Specialty application providers Provisioning the payment application to the mobile device (OTA) Offering payment applications for specific services (e.g. transit agencies payment systems) Adding additional value to mobile payments (e.g. PayPal enabling C2C payments) All these stakeholders have their specific agendas with some commonalities: acquiring plus retaining customers and making money. Some industry observers consider mobile payment to be a disruptive technology since it allows simpler and more convenient solutions with different attributes that have not been valued by existing customers [7] [8]. Since Markides suggests that disruptive innovations are less likely to be driven by the customer side [9] we focus on the supply side in our analysis 47

48 below. However the customer eventually decides whether a mobile payment system will succeed on the market. In this decision the fulfillment of 3 major categories of requirements will play a crucial role: security, costs and convenience. Technology providers like hardware and software developers can be considered second line suppliers catering to the main stakeholders. For this reason we do neglect them in our analysis as well. A very important new stakeholder in the payment business are the mobile network operators because (1) they have massive direct customer contacts, (2) they provide the mobile handsets thereby dictating features and (3) they are looking for new ways to increase customer loyalty. 5.1 Roles and Interests The following tables summarize the roles and interests of the four stakeholders that where identified as most important. Table 3. Mobile Network Operators (MNOs) Examples: Swisscom, Sunrise, Orange Role Control the proliferation of NFC technology on the handsets Dictate the hardware and software requirements to the handset manufacturers Often certify and load the applications to the phone (although this is changing in particular with smartphones) Will ultimately control which virtual cards residing in the wallet on the handset Interests Making mobile phones more attractive and important to the users Increasing customer loyalty Decreasing customer churn Increasing traffic on their networks Getting a share of the transaction fees, boosting the average return per user Encourage consumers to upgrade to new NFC-enabled phones Making other use of the NFC-enabled handsets (e.g. in marketing) No big interest to share customers with other entities Table 4. Merchants Examples: Migros, Coop, Valora, McDonalds, SBB Role Charge for goods sold to customers Offer different methods of payment to the customer Interests Reliability of the payment system Increased revenue: o Ticket size o Number of transactions o Wallet share of the merchant s own cards o Customer loyalty o Attracting new customers Reduced expenses o Cost of downtime (contactless technology) o Cash handling expenses o Operational expenses (e.g. electronic receipts, coupons and customer cards) Payment convenience, security and speed Low transaction costs Low investments in payment infrastructure Simple setup and operation of payment infrastructure Table 5. Financial Industry: Banks, Issuers and Acquirers Examples: UBS, PostFinance, Cantonal Banks, Viseca, Six Card Services and Multipay Role Providing customers with accounts and the ability to transfer money between them Offering payment methods and means to customers Issuing mobile payment capabilities Positioned as the most trusted provider for financial services Interests Keeping their benefits of processing payments Keeping their revenue or having a compelling reason to share it Increasing electronic payment transaction volume from replacing cash sales Making proximity payment one part of their strategy Table 6. Payment Networks Examples: MasterCard, Visa, Eufiserv (PostFinance) Role Setting standards and promoting acceptance by all parties throughout the network Providing brands with a high recognition factor signaling payment acceptance Interests Keeping their position as a core enabler in the payment industry Increasing global market share in the payment industry Increasing revenues through higher transaction volumes Making proximity payment one part of their strategy 5.2 Strategic Positions Following up on the roles and interest of the four main stakeholders we analyze their strategic position in the following tables. The method being used is a simplified SWOT analysis combining strengths with opportunities and weaknesses with risks. 48

49 Table 7. Mobile Network Operators (MNOs) Examples: Swisscom, Sunrise, Orange Strengths and Opportunities Strong market presence Large customer bases Established procedures for customer billing Control over handsets, their configuration and distribution Close link to technology providers Weaknesses and Risks No experience in the payment business No experience in the banking business Customer trust? Dependent on handset manufacturers and standards Market fragmentation (in particular internationally) Market entry of MNOs complicates the overall picture of relationships The established players might look at them as a threat Various potential business models to choose from Table 8. Merchants Examples: Migros, Coop, Valora, McDonalds, SBB Strengths and Opportunities Control over the POS Generation of revenue (money flow) Relations with established payment providers and systems Bigger merchants: economies of scale Weaknesses and Risks Significant investments in new POS infrastructure lately Very efficient cash handling processes make it hard to justify investments in mobile payment systems Waiting position due to the nature of disruptive technology Table 9. Financial Industry: Banks, Issuers and Acquirers Examples: UBS, PostFinance, Cantonal Banks, Viseca, Six Card Services and Multipay Strengths and Opportunities Market presence Large customer base Part of the existing payment systems Existing relationships and alliances Highly optimized processes Weaknesses and Risks Increased costs due to activities in the areas of customer service, device tracking, application and key management No control over distribution and form factor of the payment device Reluctance to deploy payment applications to customer owned mobile devices Risk of MNOs taking over the role of banks in payment thereby establishing competition for the existing methods of payment Table 10. Payment Networks Examples: MasterCard, Visa, Eufiserv (PostFinance) Strengths and Opportunities Market position and presence Large customer base Existing relationships and alliances Highly optimized processes Strong position in setting standards for the payment industry Weaknesses and Risks Risk of loosing market share to new entrants from the mobile communication industry or to new third parties Loosing control over the form factor of payment devices Increased costs to deliver payment technology to the payment network High transaction costs for merchants may lead to the surge of alternative providers 5.3 Analysis Summary Summarizing the analysis of the different core stakeholder reveals a very difficult situation with conflicting interests and a low probability of a seamless cooperation between the various players. In this situation a business model that delivers value to all stakeholders is an important requirement but very difficult to come up with. Looking at possible paths of development in the domain of proximity mobile payment the future role of the mobile network operators is key. Recent developments even augmented this fact with the full support of the ETSI-endorsed Single Wire Protocol (SWP) by the GSMA (the global trade group for the mobile industry). This aforesaid SWP standard is providing the interface between a handset's SIM and the embedded NFC chipset within the handset. This means that secured communication from within the mobile device to the handset has to be passing the SIM card. So even if the mobile network operator (MNO) is not selling the customer s handset it can still control which applications e.g. for payment or ticketing can be downloaded to their subscriber s SIM cards. In November 2008 the GSMA called for massmarket NFC handsets by mid-2009 [10]. Some industry observers doubt there will be any significant deployments of NFC phones until 2010 but in any case if the SWP standard prevails this will pretty much push MNOs into the pole position and new third party payment providers into a niche. Unfortunately the strengthened position of the MNOs makes the overall situation even more complex. In order for mobile payment to be successful on the market it should be standardized and comprise as little fragmentation as possible. However many scenarios being discussed, alliances being built and trials being 49

50 run (e.g. the one of Swisscom with Selecta and Legic [11]) only cover specific use cases and do not integrate all the stakeholder thereby risking market fragmentation. In terms of diffusion models for mobile payment a fragmented market automatically results in very little or reduced network effects which are crucial for the overall success of mobile payment. 6. Delaying Factors and Countermeasures Following our analysis of the major stakeholders with their agendas we are trying to identify major factors, which could be responsible for further delay of NFC based payment scheme deployment in Switzerland. In the following table the individual factors are combined with potential countermeasures to alleviate the problems. Table 11. Delaying Factors & Countermeasures Delaying Factor Potential Countermeasures Existing high standard Wait for the breakthrough of and coverage of mobile payment schemes in electronic payment in other European countries Switzerland Identify areas of usage where mobile payment promises the highest overall benefits (e.g. micro payments, parking, Chicken and egg problem (no NFC enabled phones, no POS infrastructure) Swiss customers still prefer cash and retailers optimized there costs for cash payments down to 0.2% of the purchase amount [12] Recent investment of retailers (e.g. Coop and Migros) in new POS terminals Availability of NFC enabled handsets Low interests of some stakeholders Difficult to kicking off network effects Small market in Switzerland does not encourage early adoption vending machines) Identify and promote additional use cases for NFC enabled phones Very difficult to overcome in the short term Include retailers in a later stage of the rollout plan Develop an NFC extension module for existing POS terminals (if technically feasible) Wait for the international breakthrough of NFC enabled handsets Introduction of services by other stakeholders which eventually could lead to increased pressure Implement a stepwise approach with a clever rollout plan Wait for the breakthrough of mobile payment schemes in other European countries 7. Deployment Scenarios Considering the complexity of the overall situation it is quite difficult to come up with reasonable and sustainable scenarios for the deployment of proximity mobile payment in Switzerland. Of course the situation will also be influenced by international developments and alliances being built. The following three scenarios illustrate different setups in terms of orchestration and rollouts. 7.1 MNO Centric In the MNO centric scenario the operators attack the existing payment systems by providing their customers the opportunity to be charged for purchases on their mobile bill. As an alternative prepaid schemes could be offered which also have the advantage of lower liquidity requirements on the side of the network operators. The Focus for the initial rollout would probably be on micro payments at vending machines and for services like parking. Direct alliances of MNOs with merchants are necessary to get this scenario going. In a second stage this payment system could be extended to support payments at kiosks, quick-serve restaurants and drive-ins. Even later macro payments e.g. at the POS of retailers could be taken into consideration however this would probably require alliances with the financial industry. 7.2 Soft Card In the U.S. and also in Asia (e.g. Hong Kong and Korea) there is a significant momentum towards contactless smartcards [2]. Products supporting this technology include MasterCard PayPass and Visa paywave. Many POS terminals in theses countries already support this method of payments and growing support is expected. Thanks to the smartcard support defined in the NFC standards payments at theses terminals can also be made with an NFC enabled phone holding an embedded soft card. This scenario enables a stepwise deployment with the mobile phones gradually taking over the role of contactless smartcards while make use of an established payment system. Since both MasterCard and Visa are very big global players it is very likely that their standards for contactless smartcards will be deployed in Switzerland some day. 7.3 Big Alliance A third scenario is an alliance of all major stakeholders. In particular this scenario would include 50

51 the Six Group (former Telekurs) as an intermediary and service provider for merchants. The services offered could be based on existing payment systems and would provide the highest potential for network effects kicking in quickly. However it is questionable whether a business model satisfying all stakeholders can be developed. 8. Conclusions In this paper we identified major factors that are responsible for the delayed deployment of mobile payment in Switzerland. In combination with the different agendas of the various stakeholders and the necessity for a business case that benefits all involved parties this explains some aspects of the problem with its high overall complexity. The presented scenarios for deployment (MNO centric, soft card and big alliance) can be regarded as possible rollout paths of the new payment method each with its own advantages and disadvantages. It remains to be seen whether one of these scenarios will prevail or if the Swiss market will await further developments in major European countries before making any bold moves. 9. References [9] C. Markides. Disruptive innovation: In need of better theory. Journal of Product Innovation Management, 23(19-25), [10] Near Filed Communications World: GSMA calls for mass market NFC handsets by mid (URL: 11/19/3235/gsma-calls-for-mass-market-nfc-handsetsby-mid-2009/, browsed ) [11] Legic Identsystems Ltd: LEGIC embeds badge and purse into NFC mobile phones. (URL: =6038, browsed ) [12] J.Ondrus, Y.Pigneur. Cross-industry Preferences for Development of Mobile Payments in Switzerland. Electronic Markets. 17:2, , 2007 [13] Innovision. Near Field Communication in the real world part 2: Using the right tag type for the right NFC application [14] J.Ondrus, Y.Pigneur. A Systematic Approach to Explain the Delayed Deployment of Mobile Payments in Switzerland. Proceedings of the International Conference on Mobile Business (ICMB 2006) [15] J.Ondrus, Y.Pigneur. An Assessment of NFC for Future Mobile Payment Systems. Sixth International Conference on the Management of Mobile Business (ICMB 2007) [16] K.Pousttchi, M.Zenker. Current Mobile Payment Procedures on the German Market from the View of Customer Requirements. Database and Expert Systems Applications, 2003 [1] K. Pousttchi, M. Schiessler, D. Wiedemann. Analyzing the Elements of the Business Model for Mobile Payment Service Provision. Sixth International Conference on the Management of Mobile Business (ICMB 2007) [2] Smart Card Alliance. Proximity Mobile Payments: Leveraging NFC and the Contactless Financial Payments Infrastructure, Whitepaper [3] Kreyer, N., Pousttchi, K. and Turowski, K. (2002b). Standardized Payment Procedures as Key Enabling Factor for Mobile Commerce. In Proceedings of the EC- Web, E-Commerce and Web Technologies (Bauknecht, K., Quirchmayr, G. and Tjoa, A.M. Eds.), , France, Aix-en-Provence. [4] epark24 (URL: browsed ) [5] Innovision. Near Field Communication in the real world part 1: Turning the NFC promise into profitable, everyday applications [6] Touchatag: What mobile phones are NFC enabled? (URL: browsed ) [7] J. Bower and C. Christensen. Disruptive technologies: catching the wave. Harvard Business Review, 73(1):43 53, January [8] S. Walsh. Roadmapping a disruptive technology: a case study. the emerging microsystems and top-down nanosystems industry. Technological Forecasting and Social Change, 71: ,

52 Persuasive Technology in Motivating Household Energy Conservation Yi Bing Tan ETH Zurich, Department of Management, Technology and Economics Abstract This paper reviews the role of existing persuasive technologies in overcoming the action-attitude gap with regards to household energy consumption. Persuasive tools in the form of smart meters and energy display devices empower households in curtailing energy consumption by providing continuous feedback, while Web 2.0, particularly social networking sites, is critical in reaching out to the masses to recruit households to the cause. These two mediums are complementary and should be used in conjunction to achieve persistence in energy savings. 1. Introduction One of the most daunting challenges facing mankind today is sustainable development. Since the Industrial Revolution, global energy consumption has increased 450-fold, with the main bulk of energy coming from non-renewable resources such as oil, coal and gas [1]. While the general consensus is that this is essential for economic growth, the impact on the natural environment has undeniably and severely affected the ecosystems, and will also compromise human life and civilisation in the long run. It is therefore imperative that energy usage be curtailed and controlled to a more sustainable level. One of the main levers for sustainable development is technology. With technology so firmly embedded in the everyday life, there exists many opportunities for technology to influence user behaviour. However, to successfully carry out persuasion, there is a need to consider the psychology of human decision making process. This is particularly important to address the long-standing existence of an attitude-action gap [2]. While environmental awareness of issues such as global warming and climate change is at an all-time high, adoption of eco-behaviour is still limited to the environmentally-conscious. This paper attempts to draw insights from various theories in social psychology to understand how persuasive technologies can play a role in motivating ecobehavioural change. While the adoption of eco-behaviour is evidently desirable in all aspects of life, I will limit our discussion to household energy conservation behaviour. In the first section, I will look at the effectiveness of various intervention strategies in household energy conservation, particularly the role of feedback, and how current technologies embedded in computing devices can bring about these strategies. Next, I investigate the role of Web 2.0 in carrying out persuasion on the web, particularly in recruiting the masses into adopting ecobehaviours as well as in helping to enforce a persistent behavioural change- that is, in making eco-behaviour a habit. 2. Background 2.1 Psychology of action-attitude gap There exist many theoretical frameworks under the study of environmental psychology that aim to explain the gap between environmental awareness and adoption of eco-behaviour. One model proposed by Blake [4] examines the barriers between environmental concern and pro-environmental behaviour. As shown in Figure 1, these barriers are namely individuality, responsibility and practicality. Individual barriers are related to the personal attitudes and value system of an individual; this represents the most significant barrier for people who are less than environmentally conscious. Responsibility barrier describes the locus of control of an individual. This represents an individual s perception of his ability to influence the situation through his own behaviour. The third barrier refers to social and institutional constraints that prevent people from taking up pro-environmental behaviour, such as lack of time, money or information. 52

53 Figure 1: Barriers between environmental concern and action [4] While there are many other factors which influence an individual s decision in adopting ecobehaviour, this model is nevertheless useful in that it combines both internal and external factors. The responsibility barrier is especially pertinent in our discussion; given the scale of environmental degradation, most people feel that they cannot make an impact. Just as how people may not feel the urgency of environmental issues due to the slow and gradual process of ecological destruction, changing behaviours will not improve the situation overnight, and a sustained effort is needed. Thus, technology not only plays a role in empowering people to change, but also connects people to show that they can make a difference through a concerted effort. 2.2 The role of persuasive technology While persuasion using technology may not be something new, B.J. Fogg was the first to formalize this concept in his book of Persuasive technology is defined as any interactive computing systems designed to change people s attitudes or behaviours [5]. To illustrate the three roles computing technology can play, Fogg introduced the framework of the functional triad: computing technology as a tool, media, and social actor. The functions of these three roles are depicted in Figure 2. While there exists some valid criticism against the invention of the idea of a functional triad [6], the persuasion strategies listed based on each of these three roles, particularly the role of computers as a tool and medium, are nevertheless still useful and should be considered. A summary of persuasion strategies for these two corners of the function triad is presented in Table 1. Figure 2: The functional triad: Computers in persuasive roles [5] Computers as Persuasive Tools 1. Reduction: persuading through simplifying 2. Tunnelling: guided persuasion 3. Tailoring: persuasion through customization 4. Suggestion: intervening at the right time 5. Self-monitoring: taking the tedium out of tracking 6. Surveillance: persuasion through observation 7. Conditioning : reinforcing target behaviours Computers as Persuasive Medium 1. Simulated cause-and-effect scenarios 2. Simulated environments 3. Simulated objects Table 1: Summary of persuasive strategies 2.3 Households are an important target group Households represent an important target group when it comes to energy conservation. While the industrial sector may still be leading in CO2 emissions, tough measures exacted by governments worldwide have resulted in a gradual decrease in industrial emissions over the years. Emissions from the residential sector, on the other hand, have increased at a rate of roughly 1.5% annually. In 2007, this sector accounted for 20.7% of totally energy-related CO2 emissions in the US [7]. A similar scenario is observed in the U.K., where residential sector accounted for 23% of total greenhouse gas emissions that year [8]. As such, the aim is not only to curtail the rise of household emissions, but also to achieve persistent reductions in household emissions. 3. Persuasion through devices 3.1 Overview of intervention strategies Extensive studies have been conducted to investigate the effectiveness of intervention strategies in household energy conservation. One of the most important strategies is the role of feedback. Since energy use is invisible to the user, the idea of providing feedback about electricity usage is to educate residents and 53

54 empower them with the knowledge to control and curtail usage. A review of literature shows that direct feedback can generate savings from 5-15% [9], while anecdotal evidence describes savings as high as 40% [10]. The effectiveness of feedback has also been shown to be maximised when it is provided continuously in real-time. Other intervention strategies that have been proved effective are providing comparative or group feedback, goal setting and tailoring of information [11]. 3.2 Smart meters and energy display devices These intervention strategies have been made possible on a large scale with the advent of smart metering and real-time energy display devices. Smart meters differ from conventional meters in their ability to continuously measure and record electricity, water or gas consumption in households. In addition, they will also be connected via a communications system for supplier metering purposes. This means that residents will have remote access to data, hence possibly paving the way for home energy management systems in the future [12]. Currently, there are 40 million smart meters in use worldwide, with 100 million installations planned for the next few years [13]. While smart metering is definitely desirable, as evidenced by government intervention worldwide to provide for it, its nation-wide implementation would take time due to the need to set common technical standards to ensure interoperability of meters [14]. The other alternative readily available now is real-time energy display devices. This range of persuasive tools is different from smart meters in that they only provide consumption data to consumers and not to suppliers. Typically consisting of an external reader/ transmitter and a display device, they are cheap and easy to install. To enhance its usability and attractiveness, these products are often designed to appeal to the aesthetics with their interfaces kept simple and intuitive. These devices are an example of self-monitoring persuasive strategy mentioned by Fogg. Devices such as Wattson have a cumulative memory feature which allows monitoring of energy usage over a period of time. This makes it easy for household to track peak electrical demands and adjust their energy consumption behaviour accordingly. The attractive and interactive design has also motivated users to conduct their own cause-and-effect simulations at home using Wattson as a persuasive media; case studies of Wattson users describe the fun of switching appliances off and observing changes in colour cues to identify the most energy-intensive appliance [15]. Some of these devices have set up an online community to support the adoption of eco-behaviour. An investigation of Wattson online community shows the number of connected devices, energy used per day and the amount of money spent. While no further information was provided on its exact features, an online community definitely has huge potential to create long-lasting behavioural change. This will be further discussed later. 3.3 Persuasive tools that utilise ambient display There also exist many innovative gadgets which utilise ambient displays to provide information about energy usage. One such gadget which stands out as a persuasive tool is the SmartSwitch invented by Stanford students. Incorporated with a network connection and a brake pad, the SmartSwitch judges the level of energy consumption in the house and provides resistance when the level of electricity usage is deemed high, making it harder for a switch to be turned on [16]. This technology not only provides intervention at the right time, hence fitting in with the principle of suggestion, it also reinforces the target behaviour of not turning on additional lights through operant conditioning, hence acting as a conditioning technology. The effectiveness can be expanded upon by incorporating an input for goal setting, where the level of electricity usage (at which resistance sets in) can be determined by households. Figure 3: Wattson and its computer interface [15] 4. Persuasion on the web The drawback of devices and gadgets as persuasion tools is the implicit need for intrinsic motivation. Households have to want to change their behaviours in order for them to take the first step of purchasing (except in the case of smart meters) and to fully utilise the feedback mechanisms provided. Moreover, the persistence of thus-induced eco-behaviour is questionable. The few studies where follow-ups were included have shown that positive effects of intervention were not maintained [17]. Here, we propose Web 2.0, in particular social networking sites (SNS), as a complement to persuasive tools. We shall investigate its potential to persuade the masses, including the less than environmentally conscious, to adopt eco-behaviour, as well as its ability to engage individuals in eco-behaviours in a sustained manner. 54

55 4.1 Psychology of differential participation Before we can leverage upon Web 2.0 and its various persuasive technologies, it is useful to gain some psychological insights into how and why individuals participate in social movements. According to a study done by Passy and Giugni [18], social networks have three important functions: they structurally connect prospective participants to an opportunity to participate (i.e. recruitment); socialise them to a protest issue; and shape their intensity of participation. One crucial determinant of the intensity of participation is the perception of one s contribution to the cause. If an individual feels that his involvement can have an impact on the cause, he would be motivated to participate more intensely. On the contrary, the collective effectiveness of the organization does not matter as much. Also, recruitment by informal networks characterised by interpersonal ties is more likely to elicit a higher level of participation than recruitment by formal means, for example through membership. Other determinants of participation level include: subject availability (amount of time households can spare for this activity) and the fit of the movement s ideology with the life goals and activities of participants. Next, existing examples will be used to investigate how Web 2.0 makes use of persuasive technologies to appeal to the psychology of individuals and motivate them to engage in the environmental movement. 4.2 Recruitment via mass interpersonal persuasion Web 2.0 marks a new era of using the web as a platform, with user participation, openness, and network effects as its key characteristics [19]. One of the key trends is the explosion of social networking sites. With 45% of web users actively participating on these sites every day [20], this presents a new form of persuasion: Mass Interpersonal Persuasion (MIP). MIP refers to the empowerment of individuals to change attitudes and behaviours on a massive scale, particularly via online social networks [21]. Facebook is one of the largest SNS with more than 175 million active users [22]. Most users on Facebook are connected to friends in numbers from hundreds to thousands. This presents a huge target audience for social influence by any Facebook user. Combined with the automated structure available to all users, anyone can persuade connected online friends to do things with ease. One example of an automated structure is the events function, where users can create an event with a few clicks and invite friends to participate. This plays upon the psychology of differential participation aforementioned; since people are being persuaded by people they know, the invitation becomes more credible, and hence people are more likely to accept and participate. Earth Hour is one such event created and reached massive scale worldwide. It achieved 1.1 million online social network friends to commit to switching off their lights for one hour on 28 th March. There is no way to check if every one of these online friends stuck to their commitment, but by leveraging on social networking sites, huge publicity was created. Landmark buildings such as Big Ben in London and Bird s Nest in Beijing switched off their lights [23], and reduction in electrical usage was reported in various cities worldwide [24]. The power of SNS in recruiting masses can be attributed to the bandwagon effect: people often do and believe things just because many people do and believe the same things. Earth Hour is an example of persuading people who would have cared less about saving the environment into turning their lights off for one hour just because they were invited to, and because their friends were doing so. There are also other features on Facebook which can be just as effective in garnering totally unexpected behavioural changes from people. If, for example, Wattson users were to post updates on their status about how much fun they were having experimenting with the gadget, people who are less than environmentally conscious could be motivated to purchase one, just because they want to join in the fun! 4.3 Achieving persistent savings through user engagement To achieve persistence in savings, there is a need to consider internal motivation as opposed to external incentives and controls [25]. Here I propose Web 2.0 as a platform for social reinforcement, for providing recognition and support through community building and group participation. The effectiveness of group participation in effecting sustained behavioural change has been demonstrated by EcoTeams in the Netherlands [26]. While the EcoTeams had a monthly meeting to exchange information about energy-saving options, the Internet makes it possible to do the same from the comforts of one s home via online communities. The advent of Web 2.0 has only increased the sophistication of these online communities, especially with regards to the sharing of user created content. Not only has the emergence of sites such as YouTube and Flickr allowed individuals to upload videos and photos, the introduction of folksonomy makes it easy for others to retrieve relevant content along natural axes generated user activity through tagging. The rise of blogging also makes it possible for anyone and everyone to share their thoughts and ideas, with the 55

56 complementing RSS technology allowing their audiences to subscribe to their webpage and receive notifications every time that page changes. The result is a live web, where things are happening all the time [27]. Do The Green Thing is one such community that actively engages members in adopting eco-behaviour. Users are encouraged to upload brilliant videos and inspiring stories to help inspire others. Any green action can be twittered to the website and this will be reflected in the form of dialogue box on Google map to show who is doing what where [28]. This inadvertently creates a sense of involvement for the members as publicly acknowledging that they have made a difference, no matter how small and insignificant their action may seem. Members may then be motivated to do more green things since they now feel that their actions do indeed contribute towards the cause. Another example of the power of online community is 1BOG, acronym for one block off the grid. The aim is to organize communities to buy solar panels in bulk in order to get bulk purchasing discounts from suppliers, with the internet platform providing community support via knowledge-sharing [29]. The ease of creating content and having an audience for it can play an important role in helping households persist in their eco-behaviours. While active participation in terms of content creation and participation in online communities will still be contingent on subject availability (a determinant of participation level aforementioned), Web 2.0 as a platform increases the convenience and decreases the time and effort required for intense participation. Since members on social networking sites tend to associate with others who have similar values and interests [20], this makes it easier for households to find an online community that offers a better fit with their life goals and activities. 5. Merging the two mediums In this section, the possibility of merging the two mediums, devices and the Web, to further increase their persuasive power in motivating eco-behaviour change is investigated. A critique against the effectiveness of real-time energy display devices is their lifecycle of usefulness [30]. After the initial excitement of the learning and exploration phase wears off, how many actually sustain their eco-friendly activities, such as unplugging the laptop every night? To prolong their lifecycle of usefulness, one possibility is to leverage on community support enabled by the web. As mentioned in section 3.2, online communities have a huge potential to support sustained behavioural change effected by real-time energy display devices. Firstly, households can set an energy saving target and announce it to their online community as a sign of commitment. According to the goal-setting theory, having a goal can be an important determinant of performance, and the goal-performance relation is enhanced when there is a commitment [31]. The online community can help by allowing households to commit publicly to their goals, and provide support through the establishment of a network. The posting of energy data online will allow the community to help in monitoring and providing feedback to the household as well. Secondly, access to energy data of other households provides comparative feedback. This can increase effectiveness of energy conservation efforts [32]. This also complements the principle of surveillance suggested by Fogg, which theorised about an additional aspect of persuasion through observation of others. Moreover, the knowledge of being observed will have a Hawthorne effect on oneself, hence motivating households to commit to desirable eco-behaviour. The integration of real world objects with the internet is also another idea that has been in existence for some time. Made possible by recent advances in miniaturization, sensor and communication technology, the vision is for items to have their digital proxy, hence merging the green world (physical world) with the blue ( digital world), resulting in an internet of things [33]. One application is to allow real-time energy display devices to automatically upload household energy data onto the web. Tweet-a-watt is an innovative, first-of-its-kind device that incorporates a wireless module. This transmits data to a nearby computer and publishes household energy data to their Twitter 1 account [34]. A possible expansion on this idea will be allowing households to choose which online community they want to upload their energy data to. By linking energy data to a chosen community, particularly communities with a green focus such as Do The Green Thing or the Earth Hour group on Facebook, households will be more motivated to participate since they are already active in that community, with the community playing a critical supportive role in their eco-behavioural change. 6. Conclusion Persuasive technology plays an important role in closing the action-attitude gap. Persuasive tools in the form of smart meters and real-time energy displays increase households locus of control by providing continuous information on energy consumption, hence targeting the barriers of responsibility and practicality. Social networking sites can overcome individuality barrier through mass interpersonal persuasion to recruit 1 Twitter is one of the largest social networking sites which allow users to send messages to their online Twitter account from sms, web, mobile web, instant message, or from third party API projects. 56

57 even non-environmentally conscious households into the cause, whereas web 2.0 and the Internet of Things enhance the effectiveness of community support through increased connectivity and reduced efforts. One area of concern is the ethics of persuasion, particularly with regards to the use of surveillance techniques in monitoring household energy consumption. While the intention may be benign, it can also be viewed as an invasion of privacy. There are two points to note with regards to this issue. First, it is important that such surveillance technologies are designed with the intention of being supportive instead of punitive. Second, it is essential that households are aware of the persuasive intent of these technologies, that their energy consumption is being continuously recorded, and permission should be obtained before such information are uploaded to websites. The other area of concern is the profitability of business opportunities in this area. Currently, green persuasive technology remains confined to a niche market, where some may argue it is too small for the sustainable growth of a firm. However, the market for real-time energy display devices, though saturated, is an example of how a useful, well-designed gadget can be a successful hit, especially with growing environmental awareness amongst the public. In conclusion, persuasive technology incorporating psychological means has vast potential for promoting and building sustainable development. Appropriate guiding principles will be needed to prevent unethical misuse. These may not be an easy task, but will most certainly be useful for the sustainability movement. References [1] Hoffman, V. (2008). Lecture notes: Introduction to Sustainability, Slide 7. Group for Sustainability and Technology, ETH Zurich. [2] 2. Kollmus, A. and Agyeman, J.( 2002). Mind the Gap: why do people act environmentally and what are the barriers to pro-environmental behaviour? Environmental Education Research, Vol. 8, No.3. [3] Wikipedia. (2008). List of Cognitive Biases. Retrieved on February 20, 2009, from: [4] Blake, J. (1999). Overcoming the 'value-action gap' in environmental policy: Tensions between national policy and local experience. Local Environment, Vol. 4, 3, pp [5] Fogg, B.J. (2003). Persuasive Technology: Using computers to change what we think and do. San Francisco : Morgan Kaufmann Publishers. [6] Atkinson, B. (2006). Captology: A critical review. First International Conference on Persuasive Technology for Human Well-Being, pp [7] U.S Deparment of. Energy Information (2008). Administration: Carbon Dioxide Emissions. Retrieved on February 20, 2009, from: [8] 8.U.K Deparment of Energy and Climate Change. (2008). UK Greenhouse gas emissions: Provisional figures. Retrieved on February 20, 2009, from: ndex.htm. [9] Darby, Sarah. (2006). The effectiveness of feedback on energy consumption. Environmental Change Institute, Oxford. [10] Thompson, Clive. (2008). Wired Magazin: Clive Thompson thinks: Desktop ord could reform energy hogs. Retrieved on February 20, 2009, from: [11] Abrahamse, Wokje, et al. (2007). The effect of tailored information, goal setting, and tailored feedback on household energy use, energy-related behaviors, and behavioral antecedents. Journal of Environmental Psychology Vol. 27, pp [12] Fleisch, E., Mattern, F. and Staake, T. (2008). Bits to Enery Lab. Retrieved on February 20, 2009, from: [13] Telegraph UK. (2009). Google introduces power meter software to reduce energy usage.. Retrieved on February 20, 2009 from: [14] MacDonald, Mott. (2007). Appraisals of costs and benefits of smart meters roll out options.uk Deparment forbusiness, Entreprise & Regulatory Reform. [15] WATTson. (2009). mdiy Kyoto: Case studies. Retrieved on February 20, 2009, from: [16] Russo, Peter and Wypich, Brendan. (2009). Greener Gadgets Design Competition: SmartSwitch. Retrieved on February 20, 2009 from: d=61 57

58 [17] Abrahamse, Wokje, et al. (2005). A review of intervention studies aimed at household energy conservation. Journal of Environmental Psychology, 25, pp [18] Passy, Florence and Giugni, Marco. (2001). Social networks and individual perceptions: Explaining differential participation in social movements. Sociological Forum. Vol. 16, 1. [19] Fleisch, Elgar and Michahelles, Florian. (2008). Web 2.0. Management Information System Lecture notes: When users add value, slide 6. ETH Zurich. [20] Mankoff, Jennifer, et al. (2007). Leveraging social networks to motivate individuals to reduce their ecological footprints. Proceedings of the 40th Annual Hawaii International Conference on System Sciences, p. 87. [21] Fogg, B.J. (2008). Mass interpersonal persuasion: An early view of a new phenomenon. Third International Conference, PERSUASIVE 2008, pp [22] Facebook. (2009). Facebook Statistcs. Retrieved on February 20, 2009 from: tics. [23] Earth Hour. (2009). Earth Hour Latest News : China's landmarks go dark for Earth Hour. Retrieved on March 29, 2009 from: [28] Do The Green Thing. (2008). Do The Green Thing: About. Retrieved on February 20, 2009 from: [29] 1BOG.(2008). Solar bulk purchasing for homes. Retrieved on February 20, 2009 from: [30] Everitte, Jonfroehlich and Yann, R. (2009). Sustain blog: Real time energy displays- the lifecycle of usefulness. sustain. Retrieved on March 28, 2009 from: 3/real-time-energy-displays-the-lifecycle-of-usefulness/. [31] Locke, Edwin and Latham, Gary. (2002). Building a practically useful theory of goal setting and task motivation. American Psychologist. Vol. 57, 9, pp [32] Siero, F.W., et al. (1996). Changing organizational energy consumption behaviour through comparative feedback. Journal of Environmental Psychology. Vol. 16, 3, pp [33] Fleisch, Elgar. (2008). Management Information System Lecture notes: Internet of Things- Integrating the real world. ETH Zurich. [34] Flahiff, Daniel. (2009). TWEET-A-WATT! A power moniter that twitters your energy use. Inhabitat. Retrieved on March 05, 2009 from: [24] Wikipedia. (2009). Earth Hour: Energy saved.retrieved on April 01, 2009 from: [25] De Young, Raymond. (1993). Changing behaviour and making it stick: the conceptualisation and management of conservation behaviour. Environment and Behaviour. Vol. 25, 4, pp [26] Staats, H., Harland, P. and Wilke, H.A.M.(2004). Effecting durable change. A team approach to improve environmental behaviour in the household. Environment and Behaviour. Vol. 36, 3, pp [27] O'Reilly, Tim. (2005). What is Web 2.0. Design patterns and business models for the next generation of software. [Retrieved on 20 November, 2008 from: what-is-wen-20.html. 58

59 Roomba to Roomie: Robots are entering our homes and our lives Zacharias Annu Department of Management, Technology and Economics, ETH Zurich Abstract From appliances to room-mates, robots are slowly but surely entering our homes and our lives. If we are to go by Bill Gates prediction there would be a robot in every home by But given the costs and complexity needed to build consumer robots, this prediction could be termed a little ambitious. This paper aims to look into the different robots available in the market for home use, a brief insight into the experiences of some of the domestic robot owners and the challenges facing the consumer robotics industry. Finally the paper tries to hint on certain unanticipated risks and ethical problems linked to the field of consumer robotics, leaving enough room for discussions and further research. 1. Introduction Robotics is set to bring a revolution in automation of the ordinary household tasks of cleaning, cooking, washing, gardening, household repair, and shopping. Most of the consuming tasks of ordinary life can be automated to some extent, leaving more time for leisure activities. Robots are even set to provide more variety to entertainment. Mobile robots that operate independently of the operator have arrived. Core robotics research and advances in robotic technology can be applied across a variety of robotic forms and functionality. With each new round of innovation, a type of technological cross pollination occurs that improves existing robotic platforms and opens up other avenues where intelligent mobile robots can be employed, effectively creating new markets.[1] The emergence of a market for intelligent mobile robots for use in homes presents many opportunities. Units used in homes are also useful in workplaces and public spaces, airports, under the sea, and on the battlefield creating synergies creating economies of scale that make systems more useful and inexpensive in all the various industry segments impacted.[1] What is good for a robotic unmanned ground vehicle is also good for a robotic vacuum and lawn mower. Multiple technological, cultural, political and market forces share a quantum singularity that has brought mobile robotics to the point where consumer markets can evolve. This is a phenomenon that will have a major impact on the way we live our lives. [1] Manufactures and roboticists however have to put up with greater challenges that they face in making these gadgets more useful and acceptable to consumers. Their greatest challenge is probably in creating robots that are mobile, dexterous and socially intelligent. Currently in the market, we find a robot that has one of these features, but one that has all of these features is still in the confines of the laboratory. This explains why the first users of the vacuuming robot were puzzled by its Frisbee shape, so much so, that some preferred to call it an automized floor cleaner than a robot. These robots were definitely different to what people had been introduced to, by the numerous science fictions as early as in the 1930s. But that has not deterred people from interacting with these objects. We are seeing the phase where robots do things for us and are moving into a phase where robots will be doing things with us. Few robot enthusiast go a little further to claim that robots would be a part of the future family. Therefore it makes it more important for us to understand the social impacts of robotic technologies. The aim of this paper is to list the home robot applications currently available in the market, highlight few challenges the makers face and state few reasons of slow adoption of these gadgets which together could imply that the predictions of some ardent lovers of technology could be a little ambitious. This paper is structured as follows: after looking into generic applications, some interesting market figures of home robots are shown. Section 3 describes what the users expect; followed by what the manufactures and hobbyist can offer given the various constraints and challenges they are faced with. Section 5 briefly describes the other side of the story with a word of caution. The final section looks into the future of home robots. 59

60 2. Applications, market figures and projections Here are some benefits that home robots offer (or could offer) today. Cleaning & Housekeeping: Currently there are many models in the market that clean and mop the floor, clean swimming pools and clear gutters. Cleaners already on the market carry a battery of electronic sensors that are meant to prevent them dropping off the edge of the stairs, to bypass obstacles like furniture, and size up a room. Several home robots can even carry dishes and other small loads from room to room. This is seen as a help for the physically challenged and the differently abled. Security & Hazard Detection: Home robots could easily be tied into a computerized home security system, and the robot's mobility would allow more areas in the home to be protected. Robots in the near future will use advanced AI (artificial intelligence) to monitor our homes, make sure everything is functioning properly and watch out for intruders. It would be fairly easy to attach fire, smoke, carbon monoxide, and other detectors to a home robot. Every night the robot could "make the rounds" to ensure that everything is okay. [2] Helpmate and home companion: Just imagine that every morning your robot could roll into your bedroom and wake you up; once the robot senses that you are out of bed it will follow you into the bathroom and deliver up-to-the minute news, weather, sports, and stock market information. [2]. Home Automation: It would be a fairly easy task to connect a robot to a home automation system. The robot, linked to your PC, would then have access to lights, security features, and more. [2] Entertainment: Robotics is an exciting hobby for many people around the world. There are countless clubs, websites, and books that have been written for those who are interested in the topic. "Humanoid battle robots" are set to bring computer games alive. Education: A home robot could not only teach about robotics but also spatial navigation, mapping, dead reckoning, programming, and more. Child Care: The technology already exists to use a robot to check on the kids while we are away from the house. Now with improvements someone could drive" the robot around from a remote computer and receive live pictures of everything that the robot sees. Pest Control: Small robots may one day scurry around our homes at night, locating and smashing cockroaches and other unwanted guests. [2] Fetch & Find : Using robot vision and an arm, the robot would navigate to the kitchen, open the refrigerator door; grab a beer off a bottom shelf, close the door, and return. Robots could also have attached RFID readers and assist in searching tagged items for e.g. keys and cell phones when misplaced. The International Federation of Robotics Statistical Department, which is hosted by the VDMA (Verband Deutscher Maschinen- und Anlagenbau - German Engineering Federation) Robotics and Automation association, publishes the study World Robotics every year. The next few paragraphs present some highlights of the report released on Oct [3]. Home robots are produced for a mass market with completely different pricing and marketing channels. Up to the end of 2007 about 3.3 million vacuum cleaners and more than 110,000 lawn mowers were sold. The total value amounted to about US$1.3 billion. As for entertainment and leisure robots, it is estimated that about 2 million units had been sold up to the end of It is expected that the crossfertilization of PC, home entertainment and robot technologies will become a very substantial business area in the near future. The total value of the stock of entertainment and leisure robots amounted to US$1 billion. These are very low-priced robots. Fig 1. Current figures and projections. [3] 60

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