Imation’s Profitable Growth Strategy - IIS Windows...

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Imation’s Profitable Growth Strategy

Jim EllisVP Strategic Growth Programs

November 14, 2006

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Personal StorageRecordable CD / DVD / Blu-ray / HD DVD optical discs1.44MB Diskettes, Devices/AccessoriesUSB Swivel Flash DriveFlash CardsMicro HDD

Small-Medium BusinessExabyte ™ VXA, Travan™/Travan NS4mm/8mm, SLR , Data Cartridges; DVD Optical Disc, Blue Discs, USB Swivel Flash Drive, Ulysses ™, Odyssey TM,

Quantum GoVaultTM, RDXTM

Mid Range ServerUltrium Tape Cartridges, DLTtape™ Tape Cartridges, Super DLTtape™ Cartridges,Ulysses™

Data CenterBlackWatch™ 9840, 9940;T 10000 BlackWatch™ 3590, 3590E, 3592, 3480, 3490E;Royal Guard™ 3480 9490EE; T10000 Tape Cartridges

Primary CompetitorsTDK, VerbatimSanDisk, Lexar Sony Maxell, Fuji

Imation Product Portfolio Spans All Major Sectors of Removable Storage

Increased capacity, levels of automation and transfer rates

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New Growth Area

#2 U.S; Growing Worldwide

#1 Worldwide

#1 Worldwide

Imation Market Position

Key CompetitorsMedia Type

Quantum, ADICRemovable Hard Disk

Sandisk, Lexar, PNYUSB Flash Memory

Verbatim, Maxell, TDKOptical Media

Fuji, Maxell, TDK, SonyMagnetic Tape

Imation Market Position

Imation is the Industry Leader in all Four Pillars of Removable Data Storage Media

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Imation Magnetic Tape Strategy

• Maintain #1 Global Position

• Invest in Advanced Tape Technology• Achieve 1 TB cartridge • Continue development of Multi-

terabyte tape (25+ TB)• Maintain solid OEM relationships

• Lean Enterprise – Speed, Quality, Competitive Cost

• Leverage Global Footprint

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Magnetic Tape Market

0.0

0.5

1.0

1.5

2.0

2.5

2004 2005 2006E 2007E 2010E

$2.0 $2.0 $1.9 $1.8 $1.8

Dolla

rs

Sources: SCCG Consulting Services, Gartner, Company Reports, Imation Estimates

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Magnetic Tape Market Landscape2006 Global Magnetic Tape Market Brand Share Estimate

Sources: SCCG Consulting Services, Gartner, Company Reports, Imation Estimates

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Imation Optical Strategy

• Maintain & Grow #1 WW Market Share• Maintain strong retail position in US• Expand Memorex Brand in LA, APAC & Europe

• Complete Portfolio of Products & Formats Across Multiple Brands

• Grow Differentiated Technologies• Hardcoats• AquaGuard• Archive CD/DVD

• Build a Leadership Position in HD-DVD and Blu-Ray• Leverage technology expertise & modular manufacturing

• Lean logistics to reduce cost• Leverage purchasing volume across suppliers

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Optical Market

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2004 2005 2006 2007 2010

CD DVD HD-DVD / Blu-Ray

Sources: SCCG Consulting Services, Cambridge, U&S, Imation Estimates

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Market Landscape2005 Global Optical Brand Share Estimates

Others 42.6%

Imation 12%

Memorex 15.5%

Verbatim 13.9%

TDK 12.7%

TY 3.5%

DVD

Others 43.7%

Imation 6.5%Memorex

10.7%

Verbatim 16.9%

TDK 14.0%

Sony8.2%

Sources: SCCG Consulting Services, Cambridge, U&S, Imation Estimates

Others 43.0%

Imation 9.0%Memorex

12.3%

Verbatim 15.3%

TDK 10.9%

Sony9.0%

CD

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Imation Flash Strategy

• Gain #2 WW share for UFD and Top 5 WW share for Flash Cards

• Leverage global purchasing volume for cost competitiveness

• Optimize supply chain to minimize impact of rapidly declining flash memory prices

• Enter Flash Card market globally- Larger market than UFD

- Higher growth than UFD- Strengthen overall portfolio

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The Market for UFD and Flash Cards is Large and Growing, with Cards Growing Twice as Fast

$2.4 $2.9 $2.8 $3.3 $3.5 $3.9

$5.7$6.9 $7.9

$10.6

$13.3

$14.9

$0.0

$6.0

$12.0

$18.0

2005 2006 2007 2008 2009 2010

$ B

illio

ns

US B F la s h D r iv e s F la s h C a rd sSources: Gartner, IDC, WF 2006, Imation Analysis

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Flash Card & Flash Drive 2005 Market Share

Sources: Imation Estimates using NPD, GfK, U&S

Others40.1%

Buffalo1.7%

PNY 3.3%Fuji 4.0%

Kingston 4.6%Lexar 6.7%

Sony 11.2%

San Disk28.6%

San Disk28.6%

Other40.1%

Other51.3%

Buffalo 3.1%IMN/MMX 5.4%

PNY 14.0%

Lexar 13.3%

Kingston 4.6%

San Disk14.7%

USB Flash Card$5.7 Billion

USB Flash Drive$2.6Billion

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Imation Removable Hard Disk Strategy

• Use low cost COTS (Commercial off the shelf) parts (ASICs)

• Develop full range of products• Multi-brand strategy• Leverage IP, cartridge and systems

expertise• Build on industry and customer knowledge

and OEM relationships

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Thank you!