31 - User Generated Content

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 2009.
http://www.im.ethz.ch/education/FS09/iot_sem

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, ITUs
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 item-
level 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:
http://www.im.ethz.ch/edu/FS2009/iotsem
Florian Michahelles Zurich, Switzerland, J une 23, 2009

Tabl e of Cont ent s

Busi ness Aspec t s of t he I nt er net of Thi ngs
Semi nar of advanc ed t opi c s, FS 2009, Fl or i an Mi c hahel l es

Mobile as a Personal Computer 3
Anar Gasimov
RFID for Track & Trace of Baggage in Airports 8
Stphanie 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
zge Kk
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
Mobile as a Personal Computer

Anar Gasimov
Swiss Institute of Technology Zurich
agasimov@ethz.ch

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 phones 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 PC
Portability
Special input
capabilities:
Near Field
Communication,
Audio,
Photo/Video,
Barcode, Tagging
Built-in GPS
Large screen
Ergonomic
keyboard
Long battery life
Processor power
Standard protocols
Bigger storage
Table1: Advantages of Mobile and PC

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.

Business Aspects of the Internet of Things, Seminar of Advanced Topics, ETH Zurich, FS2009, Florian Michahelles (ed.)
3
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
devices 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 email 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
Mobiles small size makes
it less comfortable for data
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 devices
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
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).
Fi gur e 1 Mobi l e Beamer
Fi gur e 3 Docki ng
St at i on f or mobi l e
devi ces
Fi gur e 5 Mobi l e wi t h
USB por t
Fi gur e 2 Fol dabl e
scr een
Fi gur e 4 Pr oj ect ed
I nf r ar ed keyboar d
4

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. email, 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.

Figure6 Smart phonemarket 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
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
Figure7Mobileinternet (pages downloaded), sourceOpera
5
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 Operators
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.

Figure6 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
tagging methods such as Microsoft Tag, internet and
location based systems, mobiles 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.
Mobiles 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. email). 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, mobiles 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

[1] Mobile Phones Will Become The Primary Personal
Computing Devices. J ohn J . Barton, Shumin Zhai,
Steve B. Cousins. s.l. : IEEE Workshop on Mobile
Computing Systems & Applications, 2006.

[2] Exploring the Implications of M-Commerce for
Markets and Marketing. Sridhar Balasubramanian,
Robert A. Peterson, Sirkka L. J arvenpaa. 4, s.l. :
J ournal of the Academy of Marketing Science, 2002,
Vol. 20.

6
[3] The Future of the Internet III. J anna Quitney
Anderson, Lee Rainie. s.l. Pew Internet & American
Life Project, 2008.
[4] Mediametrie, Media in Life. Study on Cinema
frequentations in France. 75 000 Cinma de
Mdiamtrie. 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, 2008.
[7] BBC News. Universal charger for phones plan.
http://news.bbc.co.uk/1/hi/technology/7894763.stm

[8] Robbins, D. C., Lee, B., and Fernandez, R. 2008.
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, 386-394.

7
RFID for Track & Trace of Baggage in Airports

Stphanie Nguyen
ETH Zrich Department of Management, Technology and Economics
snguyen@student.ethz.ch

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, RFIDs 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
of airlines [14]. The baggage handling system is
becoming more complex due to the safety regulations,
increasing number of passengers and tighter turn-
around 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.

Figure 1 - RFID technology [7]

Table 1 - RFID trials and implementation [14]

The RFID J ournal 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.

Antenna
Transponder
Reader
Computer
System
9
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 worlds 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 bags 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 worlds 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
Italys busiest airport, Milans 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
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 18000-6C (EPC Gen2 protocol), ISO/IEC
15961 and ISO/IEC 15962 [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
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 J ournal. 2005. [Online]
http://www.rfidjournal.com/article/articleview/1339 /1/129/

[3] Roberti, Mark. Baggage Tagging Is a No-Brainer.RFID
Journal. 9 October 2006. [Online]
http://www.rfidjournal.com/article/articleview/2706/1/2/

[4] SCDigest Editorial Staff. "The Five Center RFID Tag is
Here, the Five Center Tag RFID is Here! Well, Almost."
SupplyChainDigest. 29 J anuary 2009.

[5] European airports deploy RFIDenabled baggage
tracking. RFID News. 5 March 2009. [Online]
http://www.rfidnews.org/2009/03/05/european-airports-
deploy-rfid-enabled-baggage-tracking

[6] Software upgraded for baggage handling solutionRFID
News. 21 October 2008. [Online]
http://www.rfidnews.org/2008/10/21/software-upgraded-for-
baggage-handling-solution

[7] Understanding Radio Frequency Identification (RFID).
R Moroz Ltd. 4 November 2004. [Online]
http://www.rmoroz.com/rfid.html

[8] Zhang , Ting; Ouyang , Yuanxin; He, Yang. Traceable
Air Baggage Handling System Based on RFID Tags in the
Airport. J ournal of Theoretical and Applied Electronic
Commerce Research. Vol 3. Issue1 April 2008. University de
Talca - Chile

[9] Dr. Scherrer, Darien. RFID Regulation and Technical
Issues. RFID visions and reality ETH Zurich. 6 March
2009.

[10] Baggage Improvement Programme (BIP) IATA.
1997-2009. Accessed: 20 March 2009. Available:
http://www.iata.org/

[11] About Us IATA. 1997-2009. Accessed: 20 March
2009. Available : http://www.iata.org/about/

[12] IATA Introduces RFID Standard for Baggage Tags
Annual industry savings projected at US$760 Million.
IATA. 18 November 2008. [Online]
http://www.iata.org/pressroom/briefings/2005-11-18-01.htm

[13] Simplifying the business. IATA. J anuary 2009.
[14] RFID for Baggage business case IATA. 2007.

[15] INNOVATIONS and technologies IER. 2007.
Accessed: 20 March 2009. Available : http://www.ier.fr /uk/
market/air-transportation/~/uk/innovation/keeping-track-of-
baggage-with-rfid/index.html

[16] RFID in Aviation: airport luggage control.
AeroAssist. J une 2008.

[17] Zebras RFID Readiness Guide: Ensuring a Successful
RFID Implementation. Zebra. 2008.

[18] Hong Kong International Airport. Accessed 20 March
2009. Available: http://www.hongkongairport.com

[19] Case Study: Hong Kong Airport - Baggage tracking
implementation. The Sectoral e-business watch. 2008.

[20] Bite, Katalin Emese. Minimizing the baggage loss at
airports. Periodica Polytechnica. 2008.

[21] RFID IN AVIATION. IATA. 2008.

12

Smart Home
Jingzhi Xu
MSc Management, Technology and Economics
ETH, CH-8092 Zurich, Switzerland
jixu@student.ethz.ch

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

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

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 messa ge 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 bus-
based 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

Figure 1 S-Curve of Different Technology

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

4.2.1 Demand Side

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

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.

4.2.2 Supply Side

Technology of X-10 is introduced in 1979,
which is less sophisticated level than todays
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.

Views about the Smart Home
19%
23%
18%
14%
40%
47%
28%
36%
13%
13%
13%
16%
20%
13%
25%
22%
8%
4%
16%
11%
0% 20% 40% 60% 80% 100%
1
2
3
4
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

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 1534, 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.

Concerns about the Smart Home
22%
15%
16%
43%
40%
35%
12%
15%
13%
18%
24%
27%
5%
6%
9%
0% 20% 40% 60% 80% 100%
1
2
3
Strongly Agree Agree
Neither Disagree
Strongly 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 two-
thirds of those aged over 55 agreed with
compared to 38 per cent of the young group
aged 1524.

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 designbuild 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

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 its
still a long way for Smart Home technology to
adopt worldwide.

References

[1]Digital Image Communications,
http://dicommunications.com/smarthome.htm

[2] Bob Siegel, The Smart House Area
homeowners opt for home theaters and more,
welcomehome.

[3] Sang Hyun Park, So Hee Won, Jong Bong
Lee, Smart Home digitally engineered
domestic life, Pers Ubiquit Comput (2003) 7:
189196.

[4] Toril Laberg, Haakon Aspelund and Hilde
Thygesen, "SMART HOME TECHNOLOGY:
Planning and management in municipal services"

[5] IPBusiness,
http://www.fatpipeonline.com/departments.php?
department_id=12&article_id=344

[6] Mark Pragnell, Lorna Spence and Roger
Moore, The market potential for Smart Home.

[7] Vividlogic,
http://www.vividlogic.com/product.php?cat_id=
1&p_id=4
[8] Steve Lohr, "The Smart Home Is Still
Looking for a Market", The New York Times,
January 6, 2009.

[9] Victoria Haines, Val Mitchell, Catherine
Cooper, Martin Maguire, "Probing user values
in the home environment within a technology
driven Smart Home project".
18
Input Techniques for Mobile Phones: keyboard, sensors, barcodes, RFID,
HCI

Afet Musliji
Management, Technology and Economics
ETH Zurich, CH-8092 Zurich, Switzerland
amusliji@student.ethz.ch

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 worlds 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 e-mail, 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 break-
through 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
available for both screens and buttons, which make up
the interface for interaction.

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 12-24
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
possibility of having memorized the key for the
calendar application benefiting from spatial memory.

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 devices 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
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 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.

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

With the latest trends [6] in society and technology
of increasing amount of personal computing done away
from the desktop; the increasing capabilities of ever-
smaller 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
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 state-
of-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.

6. 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,
2007.

[2] Robbins, D. C., Lee, B., and Fernandez, R. 2008.
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, 386-394

[3] Smart phones: how to stay clever in a downturn.
http://www.deloitte.co.uk/TMTPredictions/telecommunicatio
ns/Smartphones-clever-in-downturn.cfm

[4] CEVA Glossary of Terms.
http://ceva-dsp.mediaroom.com/index.php?s=glossary

[5] Ken Hinckley, Jeff Pierce, Mike Sinclair, Eric Horvitz.
Sensing Techniques for Mobile Interaction. Microsoft
Research, One Microsoft Way, Redmond, WA 98052

[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 15213 USA. CHI 2006 Workshop

[7] Pasi Vlkkynen, Ilkka Korhonen, Johan Plomp, Timo
Tuomisto, Luc Cluitmans, Heikki Ailisto*, and Heikki
Sepp. A user interaction paradigm for physical browsing
and near-object control based on tags. Mobile HCI
Conference 2003

22

End User Programming in Internet of Things

zge Kk
Department of Technology, Management and Economics, ETH Zurich
koekcueo@student.ethz.ch

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
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 screen-
layout 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].
Typical software with end user programmability
feature should have an editor, an interpreter or
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.

4.1. 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.
24

Figure 1. Body gestures are recorded by motion
sensors. Sensors gather data about body position
independentfromenvironment[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].
4.2. 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. Fromthe
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 users
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 users cellular phone.
Client gathers location information and sends it to
lash-up server and server searches for relevant lash-
ups 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
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
users 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
todays 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, 2006.
3) Hartmann B., Abdulla L., Mittal M., Klemmer S. R.,
Authoring Sensor-based Interactions by
Demonstration with Direct Manipulation and Pattern
26
Recognition, Standard University HCI Group and
The MIT Media Laboratory, 2007.
4) 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, J uly-Aug. 2004 Page(s): 5 7.
7) End-User Programming Homepage.
http://www.cs.uml.edu/~hgoodell/EndUser/
8) EUSES (End Users Shaping Effective Software).
http://eusesconsortium.org/
9) EPFL Learning Algorithms and Systems Laboratory
http://lasa.epfl.ch/

27
User-Generated Content
Niroshan Balasubramaniam
ETH Zurich, balasun@student.ethz.ch

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 user-
generated 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 user-
generated 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 self-
expression 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
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 user-
generated content in seven groups according to their
main use (fig. 2).

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,
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 user-
generated 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
2008-2013 (% of Internet users, source [7])

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
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
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.
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
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 100-200 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

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 consumers 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
in a shop and have a high penetration rate among people
- usually more than 90% in big cities [1
The program enables mobile phone
specific headset, to recognize the pro
bar code or in the future thanks to RFID tags. By
connecting to Apriori, consumers can access existing
recommendations on the same pro
usually ratings rather than reviews as this tool is much
more convenient for a quick buying d
consumers can also submit product ratings from
anywhere, enriching the database ever more
Fig.5: Apriori enables recognition an
recommendation on products (source

There would be standard criteria, usually vali
most products, like the price/quality ratio
specific criteria that could be added
himself like the quality of headsets for an Ipo
would also require the presence of a mo
is done currently in Wikipedia, delete or amen
relevant rating criteria. One potential future application
would be to connect Apriori with exisiting
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 worl
lead by companies monitoring and orchestring the image
that they project. This could be prevente
other forms of User-Generated Content, the social
networks. Indeed, in the future, we might be able
the recommendations coming only from our close
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
have a high penetration rate among people
14].
The program enables mobile phones, through a
to recognize the product thanks to its
e or in the future thanks to RFID tags. By
cting to Apriori, consumers can access existing
ations on the same product, which are
usually ratings rather than reviews as this tool is much
decision. The same
uct ratings from
atabase ever more (figure 5).

Apriori enables recognition and submission of
ucts (source: [14])

criteria, usually valid for
s, like the price/quality ratio, but also more
by the consumer
sets for an Ipod. This
also require the presence of a moderator who, as it
elete or amend non-
ne potential future application
be to connect Apriori with exisiting databases
such as Epionions.com, to enrich even more user
oubt in general on the quality of these
ress the issue of
ratings, in the frame of a world growingly
orchestring the image
be prevented by leveraging
Content, the social
, in the future, we might be able to filter
ations coming only from our close circle
s, by for example taking the ratings coming only
with you on Facebook.
in having the view of
n the buying of a new
laptop could for example filter the ratings coming from a
social network used by specialists of the fiel
example.

7. Conclusion

Web 2.0 sets user-content at the heart of its
development. From a state where creators and
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
free did not mean poor-quality.
becoming almost a second
your first one, be it Windows or Apple, enabling you to
access data, send information, to uploa
your desktop and a growing amount of functions. Blogs
created by simple persons are nowa
CNN.com or BBC.com, the tra
information. We have seen in this article the
types of UGC as well as the four
the development of user contents
economic as well as legal drivers
on e-commerce platforms using UGC as a tool to make
their services more reliable an
research by presenting Apriori, a platform connecting
user-contents, mobile phones an
help consumers to make better buying
interesting to see that all the
it a simple blog or writing a complicate
quantum physics on Wikipe
the power to the people. We create the worl
tomorrow.
Nevertheless, major challenges persist in this new
paradigm, such as the level
these information being written by non
notably on topics like science or
address some privacy issues
not always meant to be share
like facebook or Flickr reveals very private information
that is indeed difficult to control.
emphasis should be put on giving
to the creators of UGC, through for example the
common creative standard. To conclu
for example filter the ratings coming from a
by specialists of the field for
content at the heart of its
development. From a state where creators and consumers
, 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
quality. Facebook is today
d operating system, next to
ows or Apple, enabling you to
information, to upload videos from
a growing amount of functions. Blogs
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
evelopment of user contents, technological, social,
rivers. We have then focused
commerce platforms using UGC as a tool to make
their services more reliable and we concluded our
research by presenting Apriori, a platform connecting
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
eople. We create the world of
Nevertheless, major challenges persist in this new
as the level of trust that one can put on
ing written by non-professional,
science or medicine. One can also
s as user-generated content is
not always meant to be shared with anybody: websites
like facebook or Flickr reveals very private information
ifficult to control. More than that, more
be put on giving some forms of rights
to the creators of UGC, through for example the
. To conclude, this whole new
32
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 2009
http://www.physorg.com/news157661569.html
[2] Tsunami Blogs Help Redefine News and Relief Effort,
January 2005
http://news.nationalgeographic.com/news/2005/01/0126_05012
6_tv_tsunami_blogs.html
[3] Online Collaboration Boosts Power of the People, January
2009
http://discoveryfuel.com/collaborative-design/online-
collaboration-boosts-power-of-the-people/
[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 2007.
[6] 2008, the Year of Nano-Networks
http://alwayson.goingon.com/permalink/post/22841
[7] User-Generated Content Draws Fans. February, 2009.
http://www.emarketer.com/Article.aspx?R=1006895
[8] Compete.com, April 2009.
http://siteanalytics.compete.com/facebook.com+myspace.com/
?metric=uv#
[9] Whos Worried About Facebook? Not Twitter, February
2009.
http://gigaom.com/2009/02/08/whos-worried-about-facebook-
not-twitter/
[10] User-generated content drives half of U.S. top 10 fastest
growing web brands. Nielsen / Netratings, August 2006.
http://www.nielsen-online.com/pr/PR_060810.PDF
[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 2005
http://benmetcalfe.com/blog/2005/08/flaws-with-ebay-trust-
model/
[13] http://www.epinions.com/about/
[14] APriori: A Ubiquitous Product Rating System, F. von
Reischach, F. Michahelles, Workshop on Pervasive Mobile
Interaction Devices (PERMID) at Pervasive 2008, Australia,
May 2008.

33
Monetization of Mobile platforms

Avinash Vankadaru
ETH Zurich, CH-8092, Switzerland
vavinash@student.ethz.ch

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
dos and donts 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 users relationships and lifestyle via web-
enabled 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 2000s 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
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.

2.1. 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 Andersons 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
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.

2.2. 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.

2.3. 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]. Its a
translation of Googles 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 dont 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
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 2008.
[2] Freemium concept by Chris Anderson
http://www.wired.com/techbiz/it/magazine/16-
03/ff_free
[3]Bharat Rao, Louis Minakakis, Evolution of
Mobile location based services, Communications of
the ACM, Pages 61-65, December 2003.
[4] Pieter Ballon, Nils Walravens, Antonietta
Spedalieri, Claudio Venezia, An Advertisement-based
37
Platform Business Model for Mobile Operators, 12th
International ICIN Conference, October 2008
[5]http://en.wikipedia.org/wiki/Short_message_service
http://mobilejones.com/2007/07/27/you-might-be-
paying-1000-per-mb-for-sms/
[6]http://www.mobilemarketer.com/cms/news/research
/2323.html, IDC
[7] http://webdevstudios.com/services/social-network-
applications/
[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
Business Aspects of the Internet of Things:
Mobile Marketing
Gilad Geron
Swiss Federal Institute of Technology Z urich,
Department of Management, Technology and Economics,
ggeron@student.ethz.ch
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 po-
tential for marketers, who can now target their audience
with more precision and with more attractive and interac-
tive contents. This paper aims to examine mobile phones
as a marketing ground and how the emergence of new tech-
nologies, 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 chan-
nels, which means that viewers are more scattered and the
number of viewers per channel is smaller. This makes it
more difcult to target a large number of viewers and there-
fore reduces the efciency of advertisement campaigns on
television. Moreover, according to Newspaper Associa-
tion of America, there is a decrease in newspaper adver-
tisement expenditure and an increase in online newspaper
advertisement,[4] which may suggest that consumers are
shifting their preferences towards digital sources of infor-
mation (perhaps because the information provided digitally
is updated at a much higher frequency). The changes which
are occurring to the traditional mass media mediums re-
quire the conventional marketing strategies to adjust. The
marketing world is in transition and mobile phones are be-
coming more and more the center of attention. The purpose
of this paper is to explain why mobile phones are becom-
ing increasingly popular and to analyze the latest trends of
mobile marketing.
Before diving into the concept of mobile marketing, we
will briey dene a couple of general terms of marketing.
Marketing is an organizational function and a set of pro-
cesses for creating, communicating, and delivering value
to customers and for managing customer relationships in
ways that benet 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 audi-
ence. Pull marketing on the other hand, is where the mar-
keteer generates customer interest to pull the promotional
information.
Mobile Marketing is dened 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 phones commu-
nications 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 ex-
ample, 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
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 entertain-
ing 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 becom-
ing increasingly attractive for marketing purposes. One of
the main reasons is their popularity. The number of mo-
bile 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 worlds
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 au-
dience is reachable at all times. Mobile phones are con-
sidered as the rst so-called private mass media and the
second interactive media (the rst is the internet).[10] What
makes mobile phones so personal is the fact that all of ones
information is stored on it, such as all their friends and col-
leagues 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. Fig-
ures suggest that the accuracy of tracking audience on mo-
bile 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 mo-
bile 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 iden-
tify who is watching the television at any given time and
rely on polls in order to make estimates, which do not nec-
essarily 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 pre-
cision. For the reasons explained above, marketeers view
the accuracy which mobile phones offer as a gold mine for
marketing. Privacy issues in this eld 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 mo-
bile 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 market-
ing, location based services applications are advertising or
marketing services that use specic 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 notied when approaching a certain lo-
cation 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 loca-
tion based services accuracy and experience. For exam-
ple, the built in camera of the mobile phone can be used
together with an image recognition software in order to cre-
ate 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 at-
tractive is the fact they have built-in payment capabili-
ties. Over 12 million consumers in Japan alone are us-
ing 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
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 fu-
ture 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 mat-
ter 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 pay-
ment methods.
4 Mobile Applications and Entertainment
stores
The release of Apples iPhone had a signicant impact
on the way people viewed smartphones. Before its release,
smart phones were rather sophisticated to use and were tar-
geted mostly at business people as their main audience. Ap-
ple 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 mo-
bile applications and games can be sold. The user may
browse through the store and with a fewclicks download the
desired application or game directly onto his mobile phone.
In the rst 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 exam-
ple, 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 Ap-
ples iPhone operating system and AppStore. Other smart-
phone 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 appli-
cation 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 devel-
oper 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 benets 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 mar-
ketplace. For developers, Apple offers a cost-effective so-
lution 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 di-
rected at consumers is designed to be more attractive to the
user and contains more interactive interface in order to max-
imize their prot by attracting the biggest amount of con-
sumers possible. Due to the popularity of these marketplace
platforms, many brands nowadays, offer free software and
advergames to promote brand recognition and customer en-
gagement. 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 world-
wide. These confounding gures, emphasize the potential
of mobile phones as mobile entertainment devices. As mo-
bile internet connection become faster and the subscription
fees become at, 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 inter-
net 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 nor-
mally 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
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 2004. The Web 2.0 concept is based on smooth,
interactive interfaces, easy communication, secure informa-
tion sharing and most importantly collaboration on the in-
ternet. Web 2.0 encourages people to nd, share and pro-
duce 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 in-
formation between them. The users identities can be moni-
tored 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 com-
panies 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 identied, 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 network-
ing is that we can measure what we consume but more im-
portantly 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
efciency to the particular target groups.
6 Pervasive Advertisment
Pervasive advertisment is a special case of mobile mar-
keting, where the scope of mobile devices extends to
things or pervasive computing objects. The principle be-
hind 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 com-
ponents and integrates them with the real world objects.
An example of such a device is Microsofts Surface.[8] Mi-
crosoft Surface is a computing platform with a large inter-
active 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 drag-
and-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 interact-
ing 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 ad-
vertisement which is more attractive. A billboard may show
a promotional video or offer digital coupons with GPS co-
ordinates 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 ba-
sis. The beauty of this form of advertisement is the fact
we can monitor all interactions with the billboard and build
a preferences prole 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 mar-
keting teams of the companies get more accurate feedback,
which in turn can help them improve their marketing ef-
ciency. To take this concept a step further, the billboard
advertiser can make its services location aware. By using
the preferences prole, the advertiser could target its adver-
tisement 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 solu-
tion and more complex algorithms and articial intelligence
could be applied in order to determine which advertisement
should be showed at each scenario more accurately. An-
other 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
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 erce 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 prede-
cessor, 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 appli-
cation which uses its phones camera together with bar-
code recognition software to read a products barcode then
connect through mobile internet to a social network where
users compare prices and reviews about the desired prod-
uct. The result is a mobile social commerce and review
framework.This application takes advantage of the phones
computing power and imaging capabilities as well as prof-
iting 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 mar-
keting strategies, it requires very little investment from the
companys behalf. Given the immense power of social net-
works, it is likely that we will see social mobile marketing
becoming popular.
Despite the popularity of mobile phones, it is very un-
likely that mobile marketing will force other forms of mar-
keting to disappear. Mobile marketing will become more
main stream but marketing in newspapers and other me-
dias are still effective. Perhaps other mass media forms will
be used to increase customer knowledge about mobile ser-
vices.
With their versatile capabilities, mobile phones can be
used as a binding link to connect between reality and dig-
ital world. Using different technologies (such as, NFC,
barcodes, wireless networks, GPS, image recognition soft-
ware), real world tags can be linked to digital tags and
therefore offer consumers a greater added value. Perva-
sive 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 comput-
ing 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 2008. http://www.itu.int/
newsroom/press_releases/2008/29.html,
September 2008. Accessed on the 28th of April 2009.
[2] American Marketing Association. Dictionary.
http://www.marketingpower.com/_layouts/
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[3] Cambridge Marketing colleges. Mobile marketing.
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[4] ComCorp. Increase online newspaper ad re-
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[5] L. Fields. Location based services a mar-
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articles/location-based-services-%E2%
80%93-marketer%E2%80%99s-dream. Accessed on
[6] Google. Google adwords - google mobile ads. http://
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[7] D. Halperin. Mobile marketing and advertising to
be worth $3 billion by 1q 2008, says abi research.
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google/20070410005730/en, April 2007. Ac-
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[8] Microsoft. Microsoft Surface website. http://www.
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[9] Mobile Marketing Association. http://www.
mmaglobal.com/wiki/mobile-marketing.
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[10] A. Moore. Mobile phones as mass media: Mod-
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masternewmedia.org/media/mobile-phones/
mobile-phones-as-mass-media-white-paper
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-2007076.htm, July 2007. Accessed on the 28th of
April 2009.
[12] L. Obringer. How advergaming works. http://money.
howstuffworks.com/advergaming.htm. Ac-
[13] W. Turler. Votre t el ephone: bient ot un porte-monnaie.
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[14] C. Valdecantos. Are you an alpha user? http:
//consultantvalueadded.com/2008/06/19/
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[16] M. Walsh. Mobile music revenue to reach $14.6 billion.
http://www.mediapost.com/publications/
?fa=Articles.showArticle&art_aid=100847,
February 2009. Accessed on the 28th of April 2009.
44
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
stefan.wengi@iaeth.ch

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 todays 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
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 phones 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 phones 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 14443 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
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
cardholders and the retailers bank has been omitted.

Figure 2. Credit Card Payment Process

In principle todays 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 users 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 todays 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
acquiring payment
processors
Processing payments acting on
behalf of acquiring and issuing
banks
Banks Providing customers with accounts
and the ability to transfer money
between them

Table 2. Additional Payment Stakeholders
Stakeholder Role
Mobile network
operators (MNOs)
Ensuring a supply of mobile phones
with NFC capabilities and
supporting payment services on
their networks
Chip and handset
manufacturers
Supporting branded financial
applications
SIM/payment
software developers
Providing branded financial
applications
Trusted service
managers (TSMs)
Provisioning the payment
application to the mobile device
(OTA)
Proprietary payment
application
providers
Offering payment applications for
specific services (e.g. transit
agencies payment systems)
Specialty
application
providers
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
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 merchants 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
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
Control over the POS
Generation of revenue (money flow)
Relations with established payment providers and
systems
Bigger merchants: economies of scale
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
Market presence
Large customer base
Part of the existing payment systems
Existing relationships and alliances
Highly optimized processes
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)
Market position and presence
Large customer base
Existing relationships and alliances
Highly optimized processes
Strong position in setting standards for the payment
industry
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 customers handset it can still control
which applications e.g. for payment or ticketing can be
downloaded to their subscribers SIM cards.
In November 2008 the GSMA called for mass-
market 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
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
and coverage of
electronic payment in
Switzerland
Wait for the breakthrough of
mobile payment schemes in
other European countries
Identify areas of usage where
mobile payment promises the
highest overall benefits (e.g.
micro payments, parking,
vending machines)
Chicken and egg
problem
(no NFC enabled phones,
no POS infrastructure)
Identify and promote
additional use cases for NFC
enabled phones

Swiss customers still
prefer cash and retailers
optimized there costs for
cash payments down to
0.2% of the purchase
amount [12]
Very difficult to overcome in
the short term

Recent investment of
retailers (e.g. Coop and
Migros) in new POS
terminals
Include retailers in a later
stage of the rollout plan
Develop an NFC extension
module for existing POS
terminals (if technically
feasible)
Availability of NFC
enabled handsets
Wait for the international
breakthrough of NFC enabled
handsets
Low interests of some
stakeholders
Introduction of services by
other stakeholders which
eventually could lead to
increased pressure
Difficult to kicking off
network effects
Implement a stepwise
approach with a clever rollout
plan
Small market in
Switzerland does not
encourage early adoption
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
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

[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.), 400-409,
France, Aix-en-Provence.
[4] ePark24 (URL: http://www.epark24.ch, browsed 04-08-
2009)
[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: http://www.touchatag.com/faq/what-mobile-
phones-are-nfc-enabled, browsed 04-08-2009)
[7] J. Bower and C. Christensen. Disruptive technologies:
catching the wave. Harvard Business Review, 73(1):43
53, January 1995.
[8] S. Walsh. Roadmapping a disruptive technology: a case
study. the emerging microsystems and top-down
nanosystems industry. Technological Forecasting and
Social Change, 71:161185, 2004.
[9] C. Markides. Disruptive innovation: In need of better
theory. Journal of Product Innovation Management,
23(19-25), 2006.
[10] Near Filed Communications World: GSMA calls for
mass market NFC handsets by mid-2009. (URL:
http://www.nearfieldcommunicationsworld.com/2008/
11/19/3235/gsma-calls-for-mass-market-nfc-handsets-
by-mid-2009/, browsed 04-08-2009)
[11] Legic Identsystems Ltd: LEGIC embeds badge and
purse into NFC mobile phones. (URL:
http://www.legic.com/en/dyn_output.html?content.void
=6038, browsed 04-08-2009)
[12] J.Ondrus, Y.Pigneur. Cross-industry Preferences for
Development of Mobile Payments in Switzerland.
Electronic Markets. 17:2,142-152, 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

51

Persuasive Technology in Motivating Household Energy
Conservation

Yi Bing Tan
ETH Zurich, Department of Management, Technology and Economics
tany@student.ethz.ch

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 eco-
behavioural 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 eco-
behaviours 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 individuals 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

Figure 1: Barriers between environmental concern and action
[4]

While there are many other factors which
influence an individuals decision in adopting eco-
behaviour, 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 2003. Persuasive technology is
defined as any interactive computing systems designed to
change peoples 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
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

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 ones 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 movements 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 Birds 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
ones 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
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
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

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ladyada/.

58
Roomba to Roomie: Robots are entering our homes and our lives

Zacharias Annu
Department of Management, Technology and Economics, ETH Zurich
zannu@student.ethz.ch

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 2025. 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
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 2008.
[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 2007. It is expected that the cross-
fertilization 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

The market for robots for handicap assistance
is still small, but is expected to double in the next four
years. These robots have not yet taken off to the
anticipated degree, given their potential with regard to
both imaginable need and the existing technological
level of the equipment. In a longer perspective, say in
the next 10 years, and taking into account demographic
shifts and advances in technology, assistive robots for
disabled and handicapped persons as well as robotic
prostheses are certain to be a key area for service
robots. Some major research institutions are focusing
on developing prototypes of this kind of robots and
robotics-related devices.
Projections for the period 2008-2011: about
12.1 million units of robots for personal use to be
sold. It is projected that sales of all types of domestic
robots (vacuum cleaning, lawn-mowing, window
cleaning and other types) could reach over 4.6 million
units in the period 2008-2011, with an estimated value
of US$3.3 billion. The size of the market for toy robots
and hobby systems is forecast at about 4 million units,
most of which, of course, are very low-priced. About
3.2 million robots for education and training are
expected to be sold in the period 2008-2011. Sales of
all types of entertainment and leisure robots are
projected at well beyond 7.3 million units, with a value
of about US$1.8billion.
The figures mentioned above indicate that the
consumer robotics industry has a potential for growth.
The price of these products in comparison to the
perceived benefits that the products promise to offer is
one of the main criteria for customers purchasing
decision. This could be the reason that the prices are
expected to drop in future to attract the mass market.

3. User experiences

Ever since home robots have been in the markets, it
has received mixed responses from users. Some see it
as a boon and others have different opinions. iRobot
Roomba vacuuming robots, is one of the best-selling
consumer robots till date. The iRobot Roomba has
been lauded by industry experts and consumers alike as
the first true practical and affordable home robot.
Many users have responded positively to this
invention. Though initially users were a bit surprised
and even skeptical of its form and capabilities, many
now vouch that Roomba would liberate users from
mundane household chores to spend more time with
family and friends.
There have been numerous studies on Roomba. One
such study [4] describes the expectations of people
around Roomba. The participants of the study
acknowledged that the Roomba was a robot but they
made a distinction between it and other robots .This
distinction seemed to be based on that fact that
Roomba was a consumer product thus implicitly in
contrast with other robots that were either fictional or
tools used in science. The most common expectation of
robots given by participants in the study [4] was that a
robot would be intelligent, had the ability to learn
and gain knowledge of the environment over time and
adapt its behavior accordingly. The fact that Roomba
does not learn its environment quickly became
apparent to participants though understanding how it
navigated and maneuvered through space. The lack of
intelligence limited the attributions to Roomba.
Although nearly universally the Roomba did not match
the general expectations of a robot, this seemed to
have little effect on the actual use of the Roomba. Even
those participants who expressed disappointment that
the Roomba was not more intelligent, particularly that
it did not seem to ever figure its way around, did not
report using Roomba less because of this [4]. There
were other interesting behaviors seen among the
participants of the study. With Roomba to help,
cleaning was a concern for everyone in the home, not
just the female homemaker. To help Roomba clean,
householders made physical modifications to their
homes, a process referred to as roombarization.
Common types of roombarizaion included clearing up
wires, changing furniture layout, and tucking in rug
tassel [5]. Users even named their Roomba and were
very interested in how their pets interacted with it.

61

Fig 2. Nuvo [3]

For all their purported helpfulness, home robots are
largely about companionship as we see a new trend of
markets emerging for robots that function as
housemates or roommates. One such robot available
is Nuvo, which has been marketed as a household
helpmate and as a mobile baby monitor and security
device, because it can relay photographs to cell phones
that have access to the Internet. The increasing sales of
such robots show that they have created a new type of
enthusiasm among user. However this has created
special interest among social scientists who study the
humanmachine interaction. Here is one such
interesting user experience: [6]
Whatever its capabilities are, or will be, Nuvo has
a hard time living up to the expectations set by
1960's TV shows like "The Jetsons" and "Lost in
Space." I found myself wanting Nuvo to provide
magical servitude and sparkling wit. I wanted it to
accidentally drop the salt shaker in the mixing bowl
and then be able to laugh about it because it realized
it was funny, or perhaps not laugh because it was
annoyed at having made a mistake. I wanted it to
know the difference between the two emotions, and
the complex circumstances that can cause both to
arise.
I came to enjoy Nuvo's odd attention. When I
came in from jogging, I looked across the apartment
to see Nuvo facing me. When I said, "Nuvo, I'm
back," it bowed to me, a traditional Japanese
greeting. I decided to sleep with Nuvo next to me
on my large bed, plugged in and recharging through
the night. Its blue power light slowly pulsated, as if
it were breathing. My boyfriend called me the next
day and asked if I was sleeping in the same room
with Nuvo. When I told him we were sleeping in
the same bed, there was an awkward pause.
Home robots are slowly moving from being just useful
to something thats sociable, robots with the capacity
to interact with people on psychological terms. This
opens up a new world of questions. But these
increasingly sophisticated devices challenge the idea of
human relationships and the very purpose and
importance of living things.

5. Challenges faced by the manufactures

We are moving beyond the stage where robots were
used only in controlled and therefore relatively simple
factory environments. The home is a much more
complicated environment with more unplanned and
unexpected elements that can show up. This presents
numerous challenges to manufacturers and hobbyist
alike. Bill Gates, the leader of the PC revolution
predicts that the next hot field will be robotics. He
envisions a future in which robotic devices will
become a nearly ubiquitous part of our day-to-day
lives.[7] He believes that technologies such as
distributed computing, voice and visual recognition,
and wireless broadband connectivity will open the door
to a new generation of autonomous devices that enable
computers to perform tasks in the physical world on
our behalf. We may be on the verge of a new era, when
the PC will get up off the desktop and allow us to see,
hear, touch and manipulate objects in places where we
are not physically present[7]. However the software
giant does not shy away from pointing out the few
challenges faced by the manufactures of domestic
robots.
One such challenge is that robotics
companies have no standard operating software that
could allow popular application programs to run in a
variety of devices. The standardization of robotic
processors and other hardware is limited, and very
little of the programming code used in one machine
can be applied to another.[7] Whenever somebody
wants to build a new robot, they usually have to start
from square one. The Microsoft Robotics Developer
Studio (Microsoft RDS, MRDS) seems to be one
solution to the problem. It is a Windows-based
environment for robot control and simulation. It is
62
aimed at academic, hobbyist, and commercial
developers and handles a wide variety of robot
hardware. [8]
The popularity of robots in fiction indicates
that people are receptive to the idea that these
machines will one day walk among us as helpers and
even as companions. Nevertheless, although robots
play a vital role in industries such as automobile
manufacturing--where there is about one robot for
every 10 workers--the fact is that we have a long way
to go before real robots catch up with their science-
fiction counterparts. [7] One reason for this gap is that
it has been much harder than expected to enable
computers and robots to sense their surrounding
environment and to react quickly and accurately. It has
proved extremely difficult to give robots the
capabilities that humans take for granted--for example,
the abilities to orient themselves with respect to the
objects in a room, to respond to sounds and interpret
speech, and to grasp objects of varying sizes, textures
and fragility[7]. Even something as simple as telling
the difference between an open door and a window can
be devilishly tricky for a robot. But researchers are
starting to find the answers. One trend that has helped
them is the increasing availability of tremendous
amounts of computer power. [7]
Another barrier to the development of robots
has been the high cost of hardware, such as sensors
that enable a robot to determine the distance to an
object as well as motors and servos that allow the robot
to manipulate an object with both strength and
delicacy. [7] But prices are dropping fast and therefore
we are able to see some recent forays into the home
markets. If one wants to talk about burgeoning markets
for robotics, there's a whole slew of teleoperated
applications that are waiting to be tapped. But here is
also an added problem. If the robot was able to wash
up dishes on its own then this may be useful, but if it
has to be told how to wash up, where each plate is,
when to pick it up, when its clean, where to put it to
drain etc by a teleoperator then that lessens its value. It
looks like the same old problem robots have been
coming up against for years. We need Artificial
Intelligence of a sufficient standard to use the hardware
designs available to us to their fullest extent. Until AI
has reached this standard all the robots built for this
sort of environment have to be focused on one
"simple" task i.e. vacuuming or lawn-mowing. [9]
While advances in technology are giving us
answers to some problems, a major stumbling block is
presenting a good business case for a domestic robot.
Many inventions in the robotics field are seen as
germination for further research, but
whether there's yet a market that could sustain itself, is
still not clear. One example is the AIBO by Sony
(Japan), the production of which was stopped in 2005
because of reportedly unsatisfactory sales. On the other
hand iRobots Roomba has been rewarded for putting
customers interest first. Roomba accomplishes a task
customers care about and does so at a price
competitive with other methods. No breakthrough
technologies were required, just familiar components
used in new ways. A simple set of principles helped
designers provide value to customers by keeping the
focus on the application, robot cost and functionality
and the system complexity. [10]
A burgeoning number of robotics innovators
have been inspired by the success of Roomba to move
beyond the primarily theoretical applications to which
robots had previously been consigned and are now
beginning to create robots to help people do real tasks
in the home. The latest research and development in
domestic robotics field is in sociable robots, an
autonomous robot that interacts and communicates
with humans or other autonomous physical agents by
following social behaviors and rules attached to its
role. [11] There have been some interesting
discussions in the design of these robots. Many
robotics engineers are working on humanoid forms,
instead of pursuing more imaginative, mobile,
futuristic designs, reason being that ordinary people
(especially the elderly) might interact more
comfortably with robots that have familiar shapes. In a
country like Japan, with senescing demographics, the
desire of an aging population for robots could be
enormous, both as personal assistants and as
companions. But roboticists have to remind themselves
of the hypothesis of the uncanny valley (The name
captures the idea that a robot which is "almost human"
will seem overly "strange" to a human being and thus
could result in a repulsive response [12]) to decide on
the design and business case for such sociable robots.
63

Fig 3. Human-like robots could create an
uncanny valley [12]

6. Word of caution

The scope of things one could possibly do
with home robots is ever-increasing with advancing
technology. Home robots are currently being used in
all walks of life, from child-minding robots to robots
that care for the elderly. These types of robots can be
controlled by a mobile phone or from a PC, allowing
input from camera "eyes" and remote talking from
caregivers. Sophisticated elder-care robots like the
Secom "My Spoon" automatic feeding robot; the
Sanyo electric bathtub robot that automatically washes
and rinses; and the Mitsubishi Wakamura robot, used
for reminding people to take their medicine, are
already in widespread use.[13]
Despite this, no international legislation or policy
guidelines currently exist, except in terms of
negligence. People in the likes of Professor Noel
Sharkey of the Sheffield University urge their fellow
scientists and engineers working in robotics to be
mindful of the unanticipated risks and the ethical
problems linked to their work. [13] They believes that
robots for care represent just one of many ethically
problematic areas that will soon arise from the increase
in their use, and that policy guidelines for ethical and
safe application need to be set before the guidelines
set themselves. According to few experts like Prof.
Sherry Turkle research into domestic robots has
demonstrated close bonding and attachment by
children, who, in most cases, prefer a robot to a teddy
bear[17]. Short-term exposure can provide an
enjoyable and entertaining experience that creates
interest and curiosity. However, because of the
physical safety that robot minders provide, children
could be left without human contact for many hours a
day or perhaps for several days, and the possible
psychological impact of the varying degrees of social
isolation on development is unknown.[13] At the other
end of the age spectrum, the relative increase in many
countries in the population of the elderly relative to
available younger caregivers has spurred the
development of elder-care robots. These robots can
help the elderly to maintain independence in their own
homes, but their presence could lead to the risk of
leaving the elderly in the exclusive care of machines
without sufficient human contact. [13]
Since Artificial Intelligence is becoming
more sophisticated and robots might be entering more
households, there may be important negative effects on
the human family system. People need to try and
remember that robots are still computers driven by
software and prone to crashing, hackers and such like.
Many also believe that allowing robots to do simple
everyday tasks would probably make us more
dependent on them and even lazier. These are all
realistic possibilities. These will cause a lot more
discussion and debate about technology, ethics, and
human life.

7. Conclusion

Although the home robot industry is predicted
to grow, experts say that the adoption is slow. [14] In
truth, the idea of robots in every home seems further
away today than it did four years ago. The reasons are
not entirely clear. It could come from a lack of interest
among consumers, a lack of imagination among
product developers, or a lack of tasks that could be
done well by robots. [15] There is a need for more
market study to understand consumer preferences.
Also home robots are vying for a place in markets that
can be easily substituted, for example people could
choose a real dog for Aibo or could start buying
wrinkle free clothes than buying a robot that could
iron.
The future, in time, will be far stranger. In
five years, the home robots are going to be more self-
sufficient, though not revolutionary. Given the average
64
development cycle for a new one, home robots in the
next few years are going to be similar to today's.
There will be more single-purpose robots taking care
of dull, dirty, dangerous tasks that do not require
significant manual dexterity. Robots are going to get
smaller even as their range of capabilities keeps
growing. They also will be networked so their
information applications become mainstream. [16]
Robots that serve as physical surrogates are going to be
affordable and commonplace. While there will be
exciting services of home robots in the offing, the
question of adoption and acceptance cannot be
answered. It seems that the multipurpose sociable
robots will remain in the research laboratories for a
while. Therefore the predictions of few about robotic
surrogates and helpmates in every home will take a
longer time to become a reality. However the consumer
robotics industry can flourish with better designs and
more single purpose robots like Roomba.

8. References

[1]http://www.electronics.ca/reports/consumer_electro
nics/cl eaning_robots.html
[2]http:// www.pioneernet.net/johnc/actuallydo.htm
[3]http://www.worldrobotics.org/downloads/2008_exe
cutive_summary.pdf
[4] Forlizzi, J. and DiSalvo, C. 2006. Service robots in
the domestic environment: a study of the roomba
vacuum in the home. In Proceedings of the 1st ACM
SIGCHI/SIGART Conference on Human-Robot
interaction (Salt Lake City, Utah, USA, March 02 - 03,
2006). HRI '06. ACM, New York, NY, 258-265.
[5] Sung, J., Grinter, R. E., Christensen, H. I., and
Guo, L. 2008. Housewives or technophiles?:
understanding domestic robot owners. In Proceedings
of the 3rd ACM/IEEE international Conference on
Human Robot interaction (Amsterdam, The
Netherlands, March 12 - 15, 2008). HRI '08. ACM,
New York, NY, 129-136.
[6]http://www.nytimes.com/2005/07/14/garden/14robo
t.html
[7]http://www.sciam.com/article.cfm?id=a-robot-in-
every-home&page=4
[8]http://en.wikipedia.org/wiki/Microsoft_Robotics_St
udio
[9]http://www.readybot.com/
[10] Jones, J.L., "Robots at the tipping point: the road
to iRobot Roomba," Robotics & Automation Magazine,
IEEE , vol.13, no.1, pp. 76-78, March 2006
[11]http://en.wikipedia.org/wiki/Social_robot
[12]http://en.wikipedia.org/wiki/Uncanny_valley
[13]http://www.sciencedaily.com/releases/2008/12/081
218141724.htm
[14]http://www.theage.com.au/articles/2004/10/28/109
8667898044.html?from=storylhs
[15]http://www.technologyreview.com/business/16503
/page1/
[16]http://www.pcmag.com/article2/0,2817,2238195,0
0.asp
[17]http://mitworld.mit.edu/video/588

65
Promising Business Applications of Vehicular Communication Systems

Michael Steiner
Department of Management, Technology and Economics, ETH Zurich
michaelsteiner@student.ethz.ch

Abstract

Previous research in the field of vehicular
communication systems lead to the foundation of the
CAR 2 CAR Communication Consortium in 2002,
which is formed of major car members and suppliers in
Europe and pursues the development and introduction
of the underlying radio, networking and information
technology. With the emergence of Car-2-X
communication many innovative applications become
feasible. After a short introduction into different
categories in vehicular communication systems, this
paper describes the technology and its basic
architecture. Starting with safety and traffic efficiency
application, that are the main motivations for this
technology, it continues with some thoughts about the
economic background around a future market
introduction, which finally leads to a description of
several business applications including navigation
services, local commerce and insurance services.

1. Introduction

Vehicular communication systems are an emerging
type of networks in which vehicles and roadside units
are the communication nodes. They provide each other
with information, such as safety warnings and traffic
information. This field of technology is often referred
to as car-to-x (C2X) communication, as in these
systems a car communicates to several different
counterparts or even another car. The terms car-to-car,
car-to-infrastructure (public), car-to-enterprise (private)
and car-to-home indicate the different possible
communication pairs.
C2X communication enables a great number of use
cases in order to improve driving safety or traffic
efficiency and provide information or entertainment to
the driver. The first of these three use case categories is
safety. The use case of collision warnings allows
preventing rear-end collisions. During normal driving,
the equipped vehicles anonymously share relevant
information such as position, speed and heading. In
order to prevent an imminent rear-end collision, each
vehicle monitors the actions of its own driver and the
position and behavior of all other nearby vehicles.
When the system detects a critical proximity, it warns
the driver and he will have enough time to intervene
and avoid a crash. The second category is traffic
efficiency. Those use cases are meant to improve
efficiency of the transportation network by providing
information to the owners of the transportation network
or to the drivers on the network. For example, an
infrastructure constantly collecting data and predicting
traffic congestion on roadways can deliver routing
advices to the drivers that will shorten their travel time
by using alternate routes that are not congested. The
third category of use cases named infotainment and
others is meant to capture the remaining use cases
which are not directed at safety or traffic efficiency.
Many of these use cases interact more directly with the
vehicle owner on daily basis providing entertainment or
information on a regular basis. Others are transparent
to the driver but still perform a valuable function such
as increasing fuel economy or allowing diagnostic
information to be accessed more efficiently at a service
garage.

Figure 1 Use cases of vehicular communication [1]
66
Figure 1 visually recapitulates the communication
pairs mentioned at the beginning. Where car-to-car
mainly corresponds to the safety category of use cases,
car-to-infrastructure communication supports traffic
efficiency applications. Infotainment and other use
cases are based on car-to-enterprise and car-to-home
networks.
Today, such C2X communication systems hardly
exist, because of missing technology standards and
high entry barriers for car manufacturers. Nevertheless,
C2X communication is more and more understood as
the next big step in vehicle technologies and many
current projects are trying to lay the foundations for
standardization and commercial exploitation. They
contribute their results to a common consortium called
CAR 2 CAR Communication Consortium (C2C-CC)
that was founded in 2002 by six European car
manufacturers. Its objectives are to create and establish
an open European industry standard for C2X
communication systems based on wireless LAN
components, to guarantee European-wide inter-vehicle
operability and also to push the harmonization of C2X
communication standards worldwide [2].
The aim of this paper is to give an overview of the
technology and its applications in the field of vehicular
communication systems. Emphasis is on the business
aspects and on innovative commercial applications.
This paper is structured as follows. Section 2 describes
the technological approach and its issues. Section 3
outlines the motivational applications within the
categories safety and traffic efficiency. Section 4
provides the economic background which eventually
leads us to the section 5 describing some promising
business applications, before we finally conclude with
section 6.

2. Technology

The feasibility of the broad spectrum of application
scenarios stated above depends on a standardized open
communication platform. In this section, we shortly
describe the communication technologies and the
reference architecture of the network among the
different fixed and mobile nodes.
The C2C-CC [2] derived the radio system for the
car-to-car communication from the standard IEEE
802.11, also known as Wireless LAN. As soon as two
or more vehicles are in radio communication range,
they connect automatically and establish an ad hoc
network. As the range of such a single Wireless LAN
link is limited to a few hundred meters, every vehicle is
also a router and allows sending messages over multi-
hop to farther vehicles. The routing algorithm is based
on the position of the vehicles and is able to handle fast
changes of the ad hoc network topology. Hence, the
main technologies used to implement vehicular
communication systems are WLAN and GPS. In order
to fulfill the specific requirements of fast changing ad
hoc networks and for having communication protocols
supporting both active safety and infotainment
applications, the new WLAN standard IEEE 802.11p
has been defined. Its initial draft will be published in
July 2009 [3]. The standardization process of the
frequency bands utilized has even reached a milestone
in 2008, when the EU Commission has reserved an
EU-wide frequency band for car-to-x communications
applications [4]. According to the decision, a protected
spectrum (5.875 5.925 GHz) has been allocated for
safety and efficiency related messages. The first 30
MHz in the frequency band are reserved for safety
relevant applications and the remaining 20MHz can be
used for further extensions.
Having these base technologies for communication
between vehicles and roadside infrastructures, the C2C-
CC has defined a reference architecture as shown in
figure 2. It comprises three distinct domains: in-
vehicle, ad hoc, and infrastructure domain. As we will
see later, each of these domains proposes different
application scenarios.

Figure 2 Draft reference architecture [5]

The in-vehicle domain refers to a network logically
composed of an on-board unit (OBU) and potentially
multiple application units (AUs). An AU is typically a
dedicated device that executes a set of applications and
utilizes the OBUs communication capabilities. An AU
can be an integrated part of a vehicle and be
permanently connected to an OBU. It can also be a
67
portable device such as laptop or PDA that can
dynamically attach to an OBU. AU and OBU are
usually connected with wired connections, but the
connection can also be wireless, such as using
Bluetooth. The ad hoc domain is composed of
vehicles equipped with OBUs and stationary units
along the road, termed roadside units (RSUs). OBUs
form a mobile ad hoc network which allows
communications among nodes in a fully distributed
manner without the need for a centralized coordination
instance. OBUs directly communicate if wireless
connectivity exists among them, but even when no
direct connection is possible, dedicated routing
protocols allow multi-hop communications, where data
are forwarded from one OBU to another, until it
reaches the destination. The primary role of an RSU is
the improvement of road safety, by executing special
applications and by sending, receiving or forwarding
data in the ad hoc domain in order to extend the
coverage of the ad hoc network. Additionally, an RSU
can be attached to an infrastructure network, which in
turn can be connected to the Internet. As a result, RSUs
may allow OBUs to access the infrastructure domain.
In this way, it is possible for AUs registered with an
OBU to communicate with any host on the Internet,
when at least one infrastructure-connected RSU is
available. An OBU may also be equipped with
alternative wireless technologies and in such a way may
also communicate with Internet nodes or servers via
public or private hot spots. In case that neither RSUs
nor hot spots provide Internet access, OBUs can also
utilize communication capabilities of cellular radio
networks (GSM, GPRS, UMTS, HSDPA, WiMax, 4G)
if they are integrated in the OBU, in particular for non-
safety applications.

3. Motivational applications

As you could imagine now, the main motivations for
vehicular communication systems are increased safety
and traffic efficiency. The missions of all currently
running C2X projects, and especially the C2C-CC,
have in common that they name safety applications as
one of their primary goals. In the following, we have a
look at several ideas how to improve traffic safety and
efficiency.
When introducing the safety use case category, we
already described the concept of cooperative forward
collision warning. The idea is that when the vehicle
detects a critical proximity evaluating the shared
information about position, speed and heading of other
vehicles, it warns the driver via visual, auditory or
haptic displays. The pre-crash sensing use case
addresses the next step and assumes that a crash is
unavoidable and will take place. Similar to the
cooperative forward collision warning use case, it
requires that all vehicles periodically share information
with neighboring vehicles to predict a collision. Once a
collision is no longer avoidable, the involved vehicles
engage in fast and reliable communication to exchange
information such as more detailed position data and
vehicle size. This extra information provided to both
vehicles enables an optimized usage of actuators such
as air bags, motorized seat belt pre-tensioners and
extendable bumpers. A third interesting safety use case
is the hazardous location notification. It utilizes the
network of vehicles to share information that relates to
dangerous locations on the roadway, as for instance
slippery roadways or pot-holes. For instance, a vehicle
that experiences an actuation of its ESP (Electronic
Stability Program) system retains information about the
location and shares its knowledge with other vehicles in
the surrounding area. These other vehicles can then
provide the information to the driver or use it to
automatically optimize its chassis or safety systems. In
this use case it could even make sense to distribute the
information through ad hoc networks including
roadside units in order to reach further vehicles. Notice
that all three safety use cases mentioned so far have
some common characteristics. All vehicles involved
need the ability to share information with each other
and therefore must be equipped with car-to-car
communication systems. That is why a reasonable
market penetration is necessary in order to have a
safety impact. On top of this, these use cases require an
accurate relative positioning and vehicles need to trust
the information they receive from other vehicles. As we
see later, the requirement for trust will again be
important when it comes to commercially exploitable
business applications.
Although the main motivation of vehicular networks
is safety improvements, there are several other benefits.
Vehicular networks can help in avoiding congestion
and finding better routes by processing real time data.
This in return saves both time and fuel and has
significant economic advantages. The three prominent
use cases in the category of traffic efficiency are
shortly described in the following. First, there is the
obvious use case of enhanced route guidance that we
mentioned in the introduction. In this use case, the
roadside infrastructure is collecting data and predicting
traffic congestion on roadways throughout a large
region. This information regarding current and
expected traffic conditions helps the vehicles
navigation system to inform the driver about expected
delays or better routes that might exist. As this use case
68
is likely to route a number of people around congested
areas, the overall transportation system becomes more
efficient. The second traffic efficiency use case, green
light optimal speed advisory, provides information to
the driver in an effort to make their driving smoother
and avoid stopping [6]. As a vehicle approaches a
signalized intersection, it receives information
regarding the location of the intersection and the signal
timing. With this information, the vehicle calculates an
optimal speed using the distance to the intersection and
the time when the signal is green. When the driver
travels near this optimal speed, the traffic signal is
likely to be green and he will not have to slow down or
stop. The effect of this use case is less stopping on
roadways resulting in increased traffic flow and
increased fuel economy for equipped vehicles. Finally,
we have a look at the vehicle merging assistance use
case that allows merging vehicles to smoothly join
flowing traffic. When a vehicle enters an on-ramp to a
limited access roadway, it communicates with the
adjacent traffic that is already on the roadway. It
receives advices for specific maneuvers from the traffic
participants in order to allow a safe and non-disruptive
merge into the regular traffic.
Having these motivational applications in mind, we
see that for many use cases a significant level of market
penetration of C2X communication systems is
necessary in order to work properly. This leads us to
some economic thoughts provided in the following
section.

4. Economic background

Although there is a strong motivation for vehicular
communication systems by applications described
above, there are some severe issues regarding the
market introduction of C2X communication equipment.
For consumer technologies there are two mechanisms
that lead to a successful market introduction. Either
there is a visible added value of the technology for the
customer or a regulative order, which does not leave
alternatives, requires its use. A significant improvement
of road safety due to C2X communication might
actually justify the latter. But the catch to a regulative
introduction is that, to be issued, the effectiveness of
the C2X technology has to be proven first. In case of
technologies without network effects (like e.g. safety
belts) this might be achieved by crash tests and the
limited introduction in the field. But in case of C2X, a
certain penetration in the field is required before the
effects can be unambiguously shown. Hence, it cannot
be expected that a regulative order on the basis of
expected safety and traffic flow improvement is issued
before the penetration is reached. Owing to the network
effects the situation is equally tricky when investigating
the added value for the consumer. When a consumer
can only take advantage of a technology once a certain
market penetration is reached, he or she will not invest
in this technology before this is the case, which again
means that this penetration will never occur.
The classical approach for the introduction of new
consumer technologies, to rely on early adopters to
refinance development costs, or as usually done in
the automotive industries to introduce a new
technology top down, first in upper class vehicles and
then generation by generation in lower classed
vehicles, is consequently unsuitable for C2X
communication equipment. The general idea to solve
this dilemma is stated in [7]. C2X communication shall
be introduced with help from car-to-fixpoint
communication (C2FC) applications, which cover also
the use case category infotainment and others. The
communication with fixpoints has the advantage that
the fixpoints can be installed independently from the
equipment rate of vehicles. Discussed fixpoint
communication counterparts are traffic infrastructure
(car-to-infrastructure), enterprises (car-to-enterprise),
public hotspots, personal equipment and alike.
This proposed annihilation of the network effects by
focusing on C2FC applications is a step forward to
introducing the technology. Still, to envision the
introduction of car-to-car communication, necessary
for most of the safety and traffic efficiency
applications, with optional C2FC applications is also
naive. In consequence, car-to-car communication can
only be introduced as standard equipment. In order to
answer the question, how the serial production would
pay off for the manufacturers, the authors of [7]
propose a model with two major parts. Firstly, every
vehicle is equipped with a basic car-to-car
communication unit that can generate and forward C2X
messages. It does not need to include the capability to
also interpret the messages for the use inside the
vehicle it is installed in, because the motivation for this
unit is solely to achieve as quickly as possible a
sufficiently large penetration rate. Secondly, a variety
of C2FC applications is offered to the customers. The
sale of these options finances the cost of the respective
C2FC application, as well as parts of the basic car-to-
car communication units.
Motivated by this economic background, we will
have a look at several business applications in the
following section, whereas applications that are not
depending on a very high market penetration of the
C2X communication system will particularly awaken
our interests.
69

5. Business applications

In section 3, we have already seen several use cases
of the categories safety and traffic efficiency. Now, we
introduce some use cases of the third category called
infotainment and others. As mentioned before, these
use cases have a particular importance regarding the
successful market introduction of C2X communication
systems. Taking the point of view of different
stakeholders, we split the section into a customer, a car
manufacturer and a part looking at interests of
government agencies and insurance companies. Note
that we distinguish again between C2CC applications,
that need a car-to-car communication, and C2FC
applications, where a car-to-fixpoint communication
takes place, and therefore a single equipped vehicle is
enough for the use case.

5.1. The Customer

When discussing C2FC applications, and especially
their suitability as introductory applications, three
criteria are of importance: The required coverage, i.e.
distribution of fixpoint communication counterparts.
Variations exist from any limited are imaginable (e.g.
personal equipment, company parking lot) to
nationwide coverage, large (e.g. SOS request, vehicle
location). As second, there is the required networking
behind the fixpoint communication counterparts. The
range goes from the units are not connected to any
other information source, none to the units need to be
connected to the internet (e.g. at hot spots). The third
criterion is the attractiveness of the application with
respect to the price obtainable. The value highly
depends on the user group (private driver, business
driver, manager of fleet operation business). Naturally,
those applications are specifically suitable as
introductory applications that require little or no

Figure 3 Categorization of C2FC applications [7]

networking, that are applicable in any limited area and
that are very attractive to the user. Figure 3 categorizes
a selected number of applications.
The applications found in the lower left corner are
those especially suited for the early C2FC market. We
include also the car-to-hotspot and MP3 download
applications into our discussion, as with their not
unlikely market success they will move into the lower
left corner of the diagram. Three of these promising
applications are for transport companies: electronic
transport documents, electronic tachograph and
delivery control in production plants. All three are
issues today. Hence, technical solutions exist or are
sought after. The introduction of the electronic
tachograph is even supported by legislation. This
means that the earlier the C2CC communication
interface is included in the concepts the better.
Also car rental companies are today looking into the
optimization of their processes. The use of wireless
connectivity is already tested e.g. at the car rental
return station at the Munich airport. Therefore also
their needs bear a potential for introductory scenarios.
Next to the car-to-hotspot and MP3 download
application, of interest for the private user are car-to-
personal equipment (address book and calendar
synchronization, music download into the vehicle from
mobile devices, etc.), car-to-home (comfortable
download of route planning information, music transfer
from the home PC into the car) and the use of
information points. The latter could provide local
information about e.g. parking space or tourist sites.
Decisive for the acceptance of these applications are
that they are very affordable, easy to use and that they
do not cause an information overflow.
For companies, drive through payment is a related
application, although not suitable for the introductory
scenario. C2FC based drive through payment can, in
fact, be installed in isolated set-ups (e.g. petrol stations,
drive-through restaurants), but it cannot be expected
that anyone will do so before a certain penetration with
C2CC units is in the market.

5.2. The Car Manufacturer

The direct business for the car manufacturer is to
sell vehicles. As we have seen in section 4, the C2CC
components cannot be marketed as a standard option to
choose in order to reach a large market penetration.
Therefore, car manufacturers should look for
applications that allow them to counter finance the
installation of the C2CC units by profiting from the
wireless interface themselves, outside the direct line of
70
business. In the context of vehicular telematics the use
of such a wireless connection for the car manufacturer
has already been investigated. The respective keywords
are customer and vehicle relationship management
(CRM and VRM) [7].
A first advantage in the context of VRM is the
capability for remote diagnostics that allow for more
efficient new product development and more effective
utilization of safety margins. They furthermore help
with the choice of suppliers and the proof of reliability.
The possibility to remotely fix vehicle failures reduces
customer irritation and helps to avoid costly dealer
interventions. Secondly, warranty and liability
management can be improved, as problems can be
noticed earlier and alternative ways to contact the
customers exist.
Looking at the CRM context, it is obvious that
owing to detailed customer understanding and
vehicle monitoring, suggestions for upcoming vehicle
replacements with specifically tailored models are
possible. On top of this, the customer contact can be
occasionalized. Instead of mass mailings just those
with likely interest can be informed about useful
equipment, software upgrades and alike. Thus
enhancing the customers seamless ownership
experience is brand building.

5.3. Other Parties

It has already been mentioned that government
authorities must have an interest in C2X
communication, because of its potential to significantly
reduce the number of accidents as well as to improve
the traffic flow. Apart from road safety and traffic flow,
there are other areas in which government agencies
might profit from the C2X communication. The
optimization of tolling is an urgent case all over
Europe and it would be desirable to have a compatible,
cross border, single contract, wireless solution for
tolling. C2X communication systems could provide the
necessary infrastructure. Law enforcement is a second
field for governmental application. Where e.g. theft
tracking would be generally accepted, the possibility of
tracking speed and alike with help of C2X would
jeopardize completely the acceptance of C2X
communication systems. A strong interest of
government entities is also in collecting statistical
data for their purposes. Nevertheless, the same applies
as for the car manufacturer; a not insignificant
infrastructure is required. The only difference is that
government entities have it in their hands to decide on
the reuse of e.g. tolling infrastructure.
Beside government agencies, also insurance
companies have an interest in C2X communication
systems. When looking at the statistics it can be seen
that depending on where and how much you drive, the
probability to be involved in an accident varies
considerably. E.g. if you drive only on motorways, the
probability to be injured decreases by about factor four.
Based on similar arithmetic some insurance companies
adjust their fees according to the use of the car. This
concept is called Pay-As-You-Drive (PAYD) and is
described in more detail by [8].

6. Summary

Vehicular communication systems are an emerging
type of networks and many innovative applications,
which we categorized into safety, traffic efficiency and
infotainment and others, become feasible. Although
today, such C2X communication systems hardly exist,
C2C-CC has defined the technological architecture
around IEEE 802.11 and on top of this has reached a
milestone when the EU commission has allocated a
protected frequency band for safety and efficiency
related C2X communications applications. Prominent
applications in these areas are collision warning,
hazardous location notification, and enhanced route
guidance. When we looked at the economic
background, we realized that innovative business
applications are necessary to drive the emergence of
C2X communication systems. The discussion in the
corresponding section showed that there will not be one
groundbreaking C2FC application suitable for the
introduction of C2CC. Nevertheless, there are a
number of applications from which vehicle customers
might like to profit. The C2CC technology should thus
be seen as a platform on which numerous applications
requiring wireless connectivity to the vehicle can be
realized. Finally, we had a look at some of these
applications from the viewpoint of different parties
such as private and business customers, car
manufacturers, government agencies, and insurance
companies.
Having now a broad overview of the field of C2X
communication and of the results produced so far by
projects as the Network on Wheels [9], we expect
some interesting outcomes delivered by the running
project PRE-DRIVE C2X [10] that started 2008 and
will end in June 2010, as they are not only developing a
detailed specification for such a system and a
functionally verified prototype, but also will describe
sustainable business cases from safety- to infotainment-
applications.

71
References

[1] Festag, A., Noecker, G., Strassberger, M., Lbke, A.,
Bochow, B., Torrent-Moreno, M., Schnaufer, S., Eigner, R.,
Catrinescu, C., and Kunisch, J. (2008). NoW - Network on
Wheels: Project Objectives, Technology and Achievements,
Proceedings of 6th International Workshop on Intelligent
Transportation, Hamburg, Germany.

[2] CAR 2 CAR Communication Consortium:
http://www.car-2-car.org/

[3] Official IEEE 802.11 working group project timelines
http://grouper.ieee.org/groups/802/11/Reports/802.11_Timeli
nes.htm

[4] EU reserves frequencies for Car-to-x communications,
EE Times
http://www.eetimes.com/news/latest/showArticle.jhtml?articl
eID=209903568

[5] CAR 2 CAR Communication Consortium: CAR 2 CAR
Communication Consortium Manifesto, project report, 2007.

[6] Martin Goralczyk, Jens Pontow, Florian Husler, Ilja
Radusch (2008). The Automatic Green Light Project
Vehicular Traffic Optimization via Velocity Advice, Adjunct
Proceedings of the First International Conference on The
Internet of Things.

[7] Kirsten Matheus, Rolf Morich, Andreas Lbke (2005).
Economic Background of Car-to-Car Communication, Audi,
Volkswagen, Germany.

[8] Yuanshan Lee (2008). Applications of Sensing
Technologies for the Insurance Industry, Seminar on
Business Aspects of the Internet of Things, Zrich.

[9] NoW - Network on Wheels:
http://www.network-on-wheels.de

[10] PRE-DRIVE C2X:
http://www.pre-drive-c2x.eu

72
Things and Services

Sanjin Goglia
ETH Zurich, CH-8092 Zurich, Switzerland
goglias@student.ethz.ch

Abstract

Last few years saw the emergence of new
business models and improvements to the existing
ones based on services directly tied to the network
connected devices. The new trend has been adopted
in large variety of industries from medical devices
and power plants manufacturers to consumer
electronics producers. The provided services range
from monitoring and improving maintenance,
reducing inefficiency to bringing new and fun ways
of using the everyday electronic devices and they all
have one thing in common: they fuel the new streams
of revenue for the companies offering them. In this
paper the impact on various industries will be
analyzed as well as different business models, which
are currently found in real world.

1. Introduction

The business world has seen a large shift towards
providing additional services with the product sold in
the past few years. This shift has occurred mainly
due to the increased competition and larger number
of similar products all competing on the price field.
Some companies have introduced the services
wrapped around their products, providing the added
value to their customers. A small number of
companies has moved even one step further and are
offering the smart services. The term smart
services describe the services, which go beyond the
usual product updates and create an added value for
your customers on one side and provide the company
the cost effectiveness on the other side [1]. In this
paper we will analyze some of the successful
business models based on this approach in several
different industries.
In the power industry we will assess the ABB
products and services and in the medical industry we
will look at Siemens medical equipment. The
application for small and medium business will be
seen through the application of fleet tracking and
management service. As the smart services are not
only found in the expensive industrial products or
B2B market but also in the consumer market we will
additionally assess the approach of Nokia with their
new push in the services market with the product
called Ovi, the already well-established iTunes
approach from Apple and a newcomer to this market
Amazons Kindle.

2. Industrial Equipment

As a world-leading supplier of power plant
automation and electrical solutions, ABB offers an
unmatched portfolio of systems, products and
services to meet the needs of almost any type of
plant. With their advanced and cost-effective
services and solutions they can preserve and increase
the value of customers facilities. Their service
spectrum covers the entire energy supply path from
the power plant through the substation up to the end-
user outlet. At the same time ABB manages to lower
their operational costs. The key to this success has
been the use of remote monitoring and self-
diagnostic systems which are now days a de-facto
standard in this industry. The ability to gauge
maintenance frequency, coupled with enhanced life
cycle costs, offers a golden opportunity to improve
reliability of supply and minimize unscheduled
disruptions.
For example generating electricity is seen as a
fundamentally inefficient process. The efficiency of
existing European generating capacity averages at
about 35%. On a global scale, this drops to 30%. In
essence, 65-70% of the potential energy in all fossil
fuels is wasted. With fuel accounting for around 75%
of the operating cost of a coal-fired power station,
the need to ensure optimum energy efficiency is
critical. The power generation process is at its most
efficient when the plant is in constant operation. If a
plant is well maintained and runs smoothly, it will
achieve better combustion efficiency. By measuring
and monitoring not just the boiler chemistry, but also
other areas around a power plant, ABB is able to
have a better overview of current conditions. When
incorporated into a planned preventative
maintenance programme, this information can help
to substantially reduce the risk of unplanned outages
[2]. The improvement in efficiency is another benefit
of a well-designed and applied monitoring system.
For example most of the power plants have 300 to
1,500 electric motors, pumps and other equipment
running, and in many cases they arent anywhere
near as efficient as they could be. Energy monitoring
and control systems in a plant can range from several
73
meters to a comprehensive software setup and
thousands of measuring points. Most advanced
systems provide scalability, real-time data, and third-
party device compatibility via protocols such as
Ethernet, Modbus, Profibus, DeviceNet, LonWorks,
BACnet and OPC.
Most systems use the Internet for remote access
to multiple locations within a plant or between
multiple locations using Web browsers on a PC or
wireless devices such as a PDA or laptop.
Applications include alerts and alarming, load
analysis, cost allocation, bill verification, asset
management, trend analysis, equipment monitoring
and control, and preventive maintenance.
Other companies in this industry have similar
solutions to the problem. The energy1st monitoring
and control system from Stonewater Control Systems
uses intelligent gateways installed at customer sites
to collect information and push, rather than pull,
information from the local devices over the Internet
to Stonewaters network operation center. Toyota
Motor Sales, U.S.A., Inc. used such a system to
reduce its energy consumption within its corporate
and regional offices and distribution facilities.
Toyota exceeded its goals of reducing energy
consumption by 5% by the end of its fiscal year
2003, and by 15% by the end of fiscal year 2005 [3].
Many other examples can be found in an article by
T. Houc Put power under control [3].
Somehow similar examples can be found in a
completely different industry the medical devices
industry. Siemens Medical Solutions of Siemens AG
is one of the worlds largest suppliers to the
healthcare industry. The company is known for
bringing together innovative medical technologies,
healthcare information systems, management
consulting, and support services, to help customers
achieve tangible, sustainable, clinical and financial
outcomes. The product Symbia E is one of the
Symbia family of SPECT and SPECTCT (computed
tomography) imaging systems. It provides users with
a high-quality SPECT imager that can lead to
improved clinical confidence, reliability and
versatility.
Maximizing workflow plays a critical role in
providing efficient, cost- effective, high-quality
patient care, as validated in a recent industry survey
[4] that found workflow to be one of this year's top
business priorities for imaging and IT professionals,
whether they were from imaging centers, or large or
small hospitals. Siemens answers this need by
delivering workflow solutions that are role-based,
context sensitive and knowledge-driven, providing
access to tools that support quick and intelligent
access to information, enabling more precise
diagnosis, treatment and care.
To ensure the highest customer satisfaction and
system uptime, the Symbia E is equipped with
Siemens Remote Services capabilities. The Siemens
Remote Services program enables Siemens to check
the system status through full remote access and
remote diagnostics. This level of proactive
monitoring and trending of key performance
indicators will allow Siemens to service and update
the system before small problems turn into big
downtime. The end result is that Symbia E users will
experience interruption-free imaging while having
the support of a network of nearly 1,000 trained field
engineers.

3. Logistics

As fleet operating costs continue to rise and the
Transport & Logistics market place becomes
increasingly competitive, the need for operations to
get the most out of their vehicles and drivers whilst
meeting customer service level expectations is
paramount to the overall success of any transport or
distribution business.
Several companies are now offering solutions to
address this issue. One of such companies is
Safefreight (http://www.safefreight.com). A
company specialized in helping their customers
improve the efficiency and effectiveness of their
organizations through the innovative application.
Their offering covers an extensive range of skill sets
to evaluate, design, implement and support complex
technological solutions which seamlessly integrate
into their clients line of business applications. Their
SmartFleet 360 Professional Services solution helps
to answer strategic and tactical questions like which
orders should be combined in a route (on a daily or
even real-time basis), what is the best sequence to
deliver (and pickup) orders in a certain route, which
resources and equipment should be utilized, what are
the most efficient driver start times, etc. By
integrating the real-time communication of manifest
to vehicles and real-time dispatching & scheduling
functions, the solution provides an accurate and
flexible decision making platform, which
continuously optimizes the schedule based on real
time information from the fleet. The system allows
their customers to reduce fuel and fleet costs through
accurate planning of routes and schedules reduce
empty mileage, improve customer service through
accurate arrival time planning, proactively re-plan in
real-time based on exception management, reduce
fleet operating and maintenance costs, etc.
By moving away from the traditional and very
expensive model for such applications where the
customer had to purchase the complete system,
Safefreight managed to make the online system and
offer this service under subscription. A previous
investment, which was in a range of 5000 USD per
vehicle, can now be obtained for as little as 40
USD/month including the hardware. By serving the
maps are served from Safefreights secure web
server, they enabled their customers to locate and
74
view fleet and other mobile assets, review historical
fleet reports and monitor asset location, condition
and security status in real time.
By using this solution their customers have
reported many benefits from it like: cutting fuel bills,
increased productivity and increased motivation and
less stress among their workers.
Similar businesses exist now days in various
countries.

4. Consumer Market

Just like in the industry many companies have
introduced various services bundled with their
devices, which provide additional streams of revenue
for these companies as well as offering their
customer an added value and long lasting
commitment to their products.
One of such companies is also Nokia. It is easy to
see why Nokia wants to move into services. The
handset market is maturing. In many rich countries
there are more mobile subscriptions than people.
Rapid growth is limited to emerging markets.
Handsets are becoming a commodity with shrinking
margins. Nokia could focus on increasing its market
share, which stands at nearly 40% worldwide. The
more promising bet, however, is mobile services, a
market that is finally taking off [5]. This kind of
business is not new to Nokia. A few years ago Nokia
introduced the Club Nokia, a mobile store for ring
tones and mobile applications. The Club Nokia has
been labeled as a failure mainly due to complaints
from the mobile operators who saw this new offering
as a threat to their customer relationship. The second
attempt by Nokia has been a launch of Ovi in August
2007, which attempted to provide a global one-stop
shop for mobile services. Now Nokia wants Ovi to
become even more - a hub that integrates mobile
services between handsets and personal computers,
by providing the digital maps, photo sharing
services, a music store and a synchronization tool
between the mobile phones and the PCs. By learning
on previous mistakes, this time Nokia managed to
convince mobile operators to provide support for Ovi
and offer its services together with their own. The
new streams of revenue Nokia sees in advertising, e-
commerce and subscriptions to premium services.
Another example is Apple with its iTunes store.
Now already recognized as one of the largest service
business in the world of consumable electronics. As
it is widely known iTunes store provides a possibility
for the users of Apple products to download music,
video and games to their devices. In August 2007
Apple announced that iTunes has sold over 3 billion
songs in the last 4 years, since its launch, and that it
recently surpassed Amazon and Target to become
the third largest music retailer in the US [6].
Previous attempts to sell music on the Internet were
primarily based on a subscription service model and
used proprietary formats. The record industry went
overboard on copy protection schemes, and the
public wouldn't buy it. One of the commercial music
services not only prevented consumers from burning
CD's of music they downloaded, but it also required
consumers to pay a monthly fee in order to keep
listening to music they had already downloaded. This
essentially made it impossible for consumers to
collect their own copies of music. It only allowed
them to rent it.
Apple was the first major business to understand
that consumers want music purchased on the Internet
to have the same properties as music they bought at a
CD store. These days that means portability.
Consumers want to be able to make MP3 files, CD's
or even cassettes of the music they buy. Apples
success provides valuable lessons for all marketing
on the Internet. As expected, Apple provided a
seamlessly integrated system that required very little
effort for the consumer to use. More importantly,
however, Apple provided a product with terms
familiar to consumers. Apple sold music instead of
renting it. Apple didn't try the use the situation to
force consumers to give up rights they were used to
having, and consumers appreciated it [7].
Amazon has taken a similar approach like Apple
by launching their mobile book, newspaper and
magazine reader - Kindle. Amazon Kindle is a
software and hardware platform for reading
electronic books (eBooks), developed by
Amazon.com. The Kindle hardware devices use an
electronic paper display and download content over
Amazon Whispernet using the Sprint EVDO
network. Kindle hardware devices can be used
without a computer, and Whispernet is accessible
without any fee. These devices also provide free
Internet access to Wikipedia [8]. Upon the initial
launch of the Kindle, Amazon's Kindle Store had
more than 88,000 digital titles available for
download, with the number of titles steadily
increasing. Amazon's first offering of Kindle sold
out in five and a half hours and the device remained
out of stock until late April 2008.
With Kindle, Amazon tries to reinvent the book
and newspaper publishing just like Apple reinvented
the music sales. According to the estimations done
by Citi analyst Mark Mahaney, the Kindle could
contribute 3% of Amazon's overall revenue in two
years. By combining device and book sales in an
iPod/iTuneslike model, Mark says, the Kindle could
add $750 million to Amazon's top line in 2010 [9].
By offering different models from purchasing books
to automatic delivery of newspapers to the device
based on the subscriptions Amazon has managed to
cover a whole range or reading users. Whether this
approach is going to be successful or not is still to be
seen.

75
5. Conclusion

The pressure from the market and competitors, in
form of lower margins on the devices and saturation
of the market with similar products, has forced
companies to look at combing their products with
services to achieve differentiation from the
competition. By intelligently combining the new
services with existing products the analyzed
companies have created a new value for the
customers, improved customer relationship and
retention as well as protected themselves from
competition with proprietary protocols and
technologies. It has been clear from the past
experiences by large companies that survival of the
companys business nowadays largely depends on
the offering not only top products but also binding
these products with a verity of services which
improve the customer experience and add value to
the product itself.
As we have seen from various examples, many
companies have managed to move their business to
higher earning levels by introducing the services for
the connected devices in the market of industrial
equipment. In addition to that these companies have
managed to differentiate themselves from their
competitors and create a long lasting relationships
with their customer. The introduction of services not
only adds to the revenue streams by direct sales of
these services but also allows the companies to
closely monitor their customers behaviors and
changes in trends. By doing this it allows these
companies to respond faster to the changes, build
better new products and even more improve their
customers satisfaction.
On the other hand we have seen completely new
business ideas in the fleet management and tracking
for small and medium businesses where initial costs
have been dramatically cut down and therefore
allowed the providers of these services to access
various new market segments. By doing this they
have also provided an additional benefits for their
customers who have seen cost cuts and better
overview of their workers. Such an approach would
not be possible without advances in the technology
and the possibility to interconnect the devices in a
larger, intelligent network.
In the end application of services in the consumer
market has been seen on the examples of established
business like Apples iTunes, which managed to
become the largest on-line music store by smartly
combining the services with their products. On the
other side the reinvention of the one stop shop for the
mobile phone applications and downloadable
products coming in a form of Nokias Ovi is still to
prove its business model. On the same side as Ovi
stands the new product from Amazon Kindle. By
trying to replicate the success Apple had with iTunes
and applying the same approach to books,
newspapers and magazines it is still to be seen
whether Amazon will manage to repeat the success
of iTunes.
Providing the services in the todays market has
not only become an advantage but an essential
addition to the devices sold. The companies who did
not recognize this new trend on time have observed
decline in sales and loss of customers, which
switched to other suppliers and became locked in to
the competition by the newly acquired technology.
Based on these findings it can be concluded that each
company in the future will not only have to think
how to make their product better but also what kind
of additional services they could and should provide
to their customers.

6. References

[1] G. Allmendinger, R. Lombreglia, Four Strategies for
the Age of Smart Services, Harvard Business Review,
October 2005

[2] J. Plumley, Improving power plant efficiency using
analytical instrumentation,
http://www.abb.co.uk/cawp/seitp202/f95b7920b6f64682
c1256f8d0055b672.aspx, January 2005

[3] T. Houc, Put power under control,
http://www.plantservices.com/articles/2005/539.html?
page=1, 2005

[4] Top Trends Survey, Health Imaging & IT Magazine,
October 2007

[5] Ovi go again, The Economist, December 2008

[6] J. Heller, iTunes Success Impact on Digital
Marketing,
http://thedigitalblur.com/2007/08/01/itunessuccessimpact
ondigitalmarketing/, August 2007

[7] G. E. Morris, The Apple iTunes Music Store: How
Apple
Got it Right,
http://thedigitalblur.com/200
7/08/01/itunessuccessimpact
ondigitalmarketing/, 2007
[8] Amazon Kindle,
http://en.wikipedia.org/wiki/Amazon_Kindle, Wikipedia

[9] H. Blodget, Amazon Kindle a $750 Million iPodLike
Business By 2010, The Business Insider, May 2008
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