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MARKETS & TECHNOLOGY TRENDS Researching Lifestyles IFA INTERNATIONAL VISITS PHILIPS RESEARCH AT HIGH TECH CAMPUS EINDHOVEN Fred Boekhorst – Senior Vice President – Program Manager Lifestyle In the days before this year's IFA show, our team was invited by Philips to visit their research facilities at the High Tech Campus in Eindhoven, where we visited the various life-size lifestyle test labs, and even tried the "emotion jacket" – a highly experimental device that adds an extra dimension to the experience of viewing a film, by reproducing the feeling of a heart-beat or shivers up the back. We also experienced an amazing home cinema test area, including "surround lighting" and wind blast effects. It definitely gave the "wow" effect. Heading the section is Fred Boekhorst. We asked him to tell us more about how the centre operates. of bringing beauty treatments that until now were limited to beauty salons into the hands of consumers. Today, in the field of beauty there are many creams that have very limited efficacy. People know they don't work, nevertheless they spend a lot of money on them, so we believe there is truly a market for devices that will work. "Home Living" covers everything that relates to making life comfortable, safe and easy in the home. Today we are known for such devices as the Senseo coffee maker, juicers, etc., and we believe there is quite a lot of room for expansion in the area of Home Living. Interactive Living deals with our businesses in TV, Audioand Video multimedia and Accessories. We know from our research that one of the top activities that drives a feeling of well being is watching a movie at home with family. What are some of the most important themes you are dealing with in these fields today? One very important one is that of sleep. Sleep is difficult to categorise within any particular area though, because on the one hand it does influence beauty to some extent, but far more, it influences a healthy lifestyle. People are often unaware of the importance of sleep for a healthy lifestyle and we believe that to come up with good propositions around healthy life, sleep is something we have to investigate in depth. Tell us about the background of the research labs here in Eindhoven... Philips Research started in 1914 in Eindhoven and plays an important role in generating technologies in the areas of Healthcare, Lifestyle and Lighting. One of the key inventions is the Compact Disk, which resulted in numerous optical storage applications. In 1998, we conceived the notion that we needed a laboratory that mimics true-to-life situations where we can study people as though they were at home or in a shop or in a hotel for example. The reason for this is that we believed that traditional research methodologies were too limited to really investigate the deep needs of people. In 2001-2002, we began working on "immersive experiences". The basic idea was to see whether we could augment picture and sound with light. Initially there was some scepticism inside Philips as to whether that was a good idea, however, user tests inside the "home lab" indicated to us that people actually do appreciate the In the past, we used only images and sound to evoke an experience and was quite successful. Meanwhile, our research has shown that by adding other sensory experiences such as for example the sense of touch, we can take it to the next level After quite a lot of indepth study, Philips came to the formulation of four key themes that will drive the growth of our consumer lifestyle sector inside Philips, and consequently also themes that are of high relevance to the lifestyle research programme that we run here. They relate to Healthy Life, Personal Care, Interactive Life and Home Living. Healthy Life is about making sure you will never end up in a hospital, by living in a healthier manner. And health here has to be seen in a holistic way; it is not only about physical health, it's also about mental health. Stress, which is truly a disease of our time, is a big part of that. Personal care encapsulates the notion of beauty. This notion has evolved not only into appreciation of what you see on the outside, but also what you radiate... It's about feeling good. We are known there for our shaving and grooming business and haircare treatment business, and we are looking to new ways 16 IFA International • Monday, 31st August 2009

SPECIAL FEATURE - MEET THE NOMADS! enrichment of the experience by adding light as a new medium to audio and video. That's one of the examples, and I would have to say that if we hadn't had all the user tests in the Home Lab, we might have never launched that concept. Sensory experiences are defined as a research topic, exploring new ways for people to master a desired mood. They range from creating deep immersion in new "scenery", experiencing thrills, to achieving deep relaxation. The essence of our work is to see whether we are able to measure body signs in order to classify your current emotional state... we are attempting to master emotions. We distinguish between two applications: "open loop" applications, which simply adds sensory channels. An example of this is the "wake-up light". It's an "open loop" application because the product does not know in what sleep stage you are and therefore cannot personalise its behaviour to your situation. By contrast, a "closed loop" device would measure and interpret the user's emotional state and would either stimulate or deepen the state. It's the closed loop that we are aiming for. We want to interpret the emotional state, influence it by using actuators, measure the reaction, and then interpret the state again. So each research project more or less starts from deep insights on real consumer needs... Exactly. We create multiple solutions, using multidisciplinary teams. We quite often have marketing people in here, we have designers in here who collaborate with us, but also we have a number of external specialists, leading to open innovation. Given a specific need and conceptual solution, we then test with end-users whether the concepts fulfil their needs correctly, and only after all these stages have been passed successfully, we start the product creation process inside Philips. In this way, you minimise the chances of bringing an ill-defined product to the market. l Hall 22 / Stand 101 The Ultimate Convergence Domain Mobile Devices The Heart of the Search for the “Holy Grail” Function It’s becoming almost impossible to categorise many of these devices today. They’re small, mobile, and help the nomadic current-day human get around and communicate. Every day in IFA International we will be giving you a close-up on a certain “sub-segment” of the CE market. Today, we spotlight nomadic technologies, and in particular put navigation devices of all kind under the microscope. But to begin, we felt it fitting to ask Futuresource to tell us about some of their recent research in the field of mobile devices… Major Changes in Mobile Markets By David Sidebottom, Senior Consultant - Digital Media, Futuresource Consulting The last 12 months have seen major changes in the European mobile device market place, mainly a downturn in the handset market, the introduction of “apps” stores and the wider availability of featurerich converged devices and smartphones. All of these are driving a gradual change in mobile behaviour – for many years there has been much hype regarding the mobile Internet and “what is the Holy Grail function of the mobile phone?” Well, the Holy Grail function was voice (and text) all along, but recent developments have seen consumers finally embrace the Internet on mobile, and the features and applications that it enables, thus bringing them to a mass market. By the end of 2009 there will be close to one billion mobile phone subscribers across Europe. In 2008, handset sales in the region reached nearly 300 million; of these, 45 million were smartphones, 70% had MP3 playback, and over one in three had 3G capability. Multimedia features are therefore now expected in mobile phones, challenging the dedicated device market, such as MP3 players, Portable Navigation Devices, digital cameras and even netbooks (Wi-Fi is now standard in most smartphones). Last year, approximately 600 million mobile phones were sold with imaging capability, four times the number of dedicated digital cameras sold. Key features this year are not hardware based, but software based: integrated social networking, push email and location based services. The introduction of apps stores providing such services allows customers to keep their handsets “fresh” without the need for a hardware upgrade (contributing to the downturn in handset sales continuing in the near future). Futuresource Consulting has recently published a report on device convergence, exploiting the key dynamics and strategic implications of both dedicated and converged device sectors. A wide variety of devices and CE products are adding IP connectivity, but the mobile phone is the number one IP connected device, after the PC. It is this IP connectivity that is driving potentially the biggest development in the mobile landscape: the importance of the mobile operating system. Apple has changed the game in this area, consumers download content from the App store using the Apple OS on the Apple iPhone. If this is done via Wi-Fi, what is the role of the operator? Who, therefore, owns the consumer? This is why many of the operators are keen to embrace open operating systems, in particular Android, so they can customise user interfaces and maintain ownership of the consumer. However, will Google (the developer of Android), see this as an opportunity to take ownership of the consumer in the mobile space, building on its universal success in the online space? So whilst mobile operating systems open up a whole host of opportunities in mobile entertainment and content delivery, they also introduce a new battleground for the mobile consumer. Key to the growth of the smartphone sector will be the empowerment of the David Sidebottom, Senior Consultant - Futuresource Consulting youth market. Sub €150 smartphone devices will hit the market in 2010, opening up the pay-as-yougo market which dominates the youth and teenage market. It is this sector that embraces all forms of mobile connectivity and features, whilst mobile social networking is second nature. l IFA International • Monday, 31st August 2009 17

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