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Connected Homes and Intelligent Buildings

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CONNECTED HOMES & INTELLIGENT BUILDINGS the company as a major component supplier for this rapidly evolving market. TE's customer relationships extend across many home automation categories such as hubs, occupancy sensors, appliances, HVAC equipment, and thermostats. TE's interconnect and switching technologies play a critical role in development of home automation systems: For example, TE enables routing power and signals internally and sometimes externally using electrical interconnects, and routing power and signal in these devices via switching components (for example, a power relay is needed in every wireless or wire- controlled Connected AC wall outlet). TE customers' devices are found in all major sub-systems in the automated home, including: • Lighting equipment and controls • Safety equipment and controls • Security equipment and controls • Entertainment • Portable consumer electronics • HVAC equipment and controls • Energy management equipment and controls • White goods • Portable appliances Selecting the right connector, switch, relay, or sensor for the device and its application is key to ensuring a long and trouble-free product life. For example, misapplication of products can be a major headache for OEMs, causing product failures that can take years to rectify. TE's global team of product and development engineers, application and sales engineers, account managers, and technology experts helps its customers make these important decisions early in the product development process, where optimization of a design is most important. The major elements are in place to drive growth in the connected home market, including: • Established communication protocols • Hardware that supports these protocols • Hardware that interfaces with all main home automation systems (HVAC, Security, Safety, Entertainment, Lighting) • Cloud-based access for mobile devices • Cloud-based inter-protocol translation • Improving and more reasonable price points However, a number of roadblocks currently limit widespread adoption and are worth mentioning: Data security Data security is an issue for home automation and across all Internet of Things (IoT) connected devices. Whenever a new system or product is released, it becomes a new target for cyberattackers 6 . It is unlikely that an ironclad solution to attacks on connected home systems will be developed in the near future. However, today's connected consumer is accustomed to these risks and accepts them in exchange for the benefits offered by connectivity 7 . Standardization The lack of cohesiveness and standardization across a broad group of competitors may also limit the adoption of home automation technology. Consumers have expressed concerns about committing to a specific system that is not interoperable with other devices – they do not want to commit to a product, only to discover that they cannot integrate it with other systems. These differences in protocol and communication limit economies of scale but are characteristic of any new technology revolution. Fortunately, hardware remains the same across protocols – so the hardware currently in development by companies such as TE will help drive adoption of home automation, no matter which protocols become standard. Consumer awareness Though many devices for home automation are on store shelves today or available for online purchase, many consumers are confused about the value proposition. For example, a consumer who is in the market for a new refrigerator will need a knowledgeable retail sales associate and comprehensive content on the Internet to explain the benefits and value of a connected home appliance. Without front-line education during the sales cycle, a consumer could opt out, and the connected home capabilities and value would go unrealized. The connected home market is still in the early adopter phase, and many startup companies are jockeying for position and for consumer attention. Manufacturers such as TE can help accelerate development of new and attractive home automation products by partnering in product design. Limitations to Connected Home Adoption

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