Erik Apotheker

May 14, 2008 version 1

Market Segment Focus 09

End User Sales Initiatives

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IT Channel Segmentation

» The channel has historically been comprised of three unique pillars.▪ Generalized resellers in the direct marketing and ecommerce venues who focus

on sales of computer peripherals, supplies and accessories.▪ Value Added Resellers (VARS) who provide tailored solutions by customer set /

market specific solutions who integrate products for the best solutions to customers business problems

▪ B2B vertical and OEM sales partnerships.» The combination has brought forward opportunities in SMB, SLED/FED and Fortune

1000 corporations.» The focus has been on integrating LWs into unique solutions and playing a

supporting actor type role in the customers overall user experience.▪ Our biggest successes have come from a series of segments.

Segment 07 Revenues

– Medical Practice Management $250K– Veterinary Prescriptions $300K– AIDC $1M– Security $150K– Clinical Laboratory Information Systems $750K– Architectural & Automotive Paint Matching $700K– Instrumentation $540K– More… $2.5M*

*Business via other channels or via distribution -estimated.

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Classic LW Value Proposition

» With a small footprint, tons of software hooks promising desktop productivity and with time saving efficiencies via software add-ons and features, the LabelWriter is well positioned for SOHO & SME environments.

» Clearly the diversity of the software features, labels, development supports and connectivity options afford the LabelWriter unique inclusion into many environments.▪ At the core of this diversity exists

generalized uses for addressing, mailing, shipping, media labeling, bar coding and more.– Although our labels are “multi-

purpose” the marketing and popularity of the top selling SKUs clearly identify mailing and shipping as key uses for the LWs.

– Efforts have been undertaken to directly integrate into leading third party software applications supporting mailing.

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Integration Examples - Hardware

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Integration Examples - Software

Direct Thermal printing remains a viable standard for cost effective labeling – including barcodes.

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Labeling Market Size – Source: Tarsus

» The global label market has been estimated at $65B with 29% of the consumption found in North America.

▪ About 3,000 printers exist of which the average growth is 5%-7% over the past two years.

▪ 97.7% of the total market size is derived from the production/conversion of self adhesive labels.– 84.8% is produced from coated papers.

▪ Consumer produced labels are the most widely produced labels (61%), followed by industrial, food and pharmaceutical labels.

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Converters – Source: Tarsus

▪ Label converters in North America are facing downward pressure on price. A climate of increasing costs makes it difficult to remain competitive or profitable.

▪ Of 2,000 North American converters surveyed in 2006 the following chart illustrates their perceived main barriers to label industry growth.

▪ More than 50% of converters are now marketing value add software, labelers or label application equipment.

▪ While market and competition pressures will mount it is unlikely that competitors will actively target complex and fragmented market segments.– It is likely they will chase larger

volume business opportunities in order to maximize press uptime despite profit pressures related to volume oriented bids.

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Opportunity Abounds – Contact Management

» In evaluating the core use for our vertical solutions it becomes clear that the vast majority of our successes can be loosely categorized under the term contact management.▪ Ambulatory Care – Medical/Veterinarian▪ Practice Management▪ Postage▪ Personal Information Managers▪Database & CRM Software▪Mailing/Postage

» Several of our long term projects can also be categorized this way.▪Direct Mailers – Info USA, Axiohm▪USPS

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Segment Targets

» Despite elongated sales cycles, expend resources on software integration▪ Contact Management Software▪ ISV Hosted Applications (10)▪ Personal Information Managers (46)▪ Practice Management

– Medical (379)– Legal (35)– Real Estate (5)

» New consumables▪ Wristbands (healthcare/entertainment)▪ Piggyback labels▪ Adhesive choices▪ Tyvek

» New product potential▪ PDAs (Win CE, Palm, Symbian)▪ ID/Healthcare Membership Card Scanning

» Leverage synergies across Cardscan, Endicia and other Dymo specialty labeling solutions.▪ Aligns with channel VAR initiative.

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Typical Objections to Integrating LW

» Lack of resources to develop software / development cycles out of sync.

» Low margin $ proposition if I have to compete with the “pricegrabber”s.▪Unwilling to accept support liabilities.

» Despite much higher pricing, Zebra/Cognitive/Sato/Intermec/Datamax etc. have more product features and perceived to be more rugged.

» 4” print width needed.

» Concerns over direct thermal image quality and lifespan of printed materials.

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Recommendation

» Narrow focus to contact management where at least 3 of the following traits exist.▪ OS connected.▪ SME use environment.▪ Reasonable expectation of consumable usage.▪ Private branding is not a requirement.▪ Potential for globalization.

» Phasing▪ Phase 1 – PIMS, DBs, Healthcare, direct mailer, and practice

management.▪ Phase 2 – Security/Access Control, Real Estate, CRM, legal.▪ Shrink wrap software, ISPs, and SaaS partners are key targets.

» For consideration▪ Improve API, SDK and other connectivity aids▪ Expand consumable offerings as appropriate.▪ Migrate SE300 to a 4” platform.

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New Twists

» Mitigate purchase price and support issues by utilizing a LW TT installment/lease plan.

– Fleet maintenance and warranty managed by Dymo reduced overhead and liability to partners.

– Layered in monthly installments are more palatable than one large down stroke.

Proper structure could ensure revenues beyond the normal purchase price of the LW.» Revenue sharing?

Masks “Pricegrabber” effect allowing a semi-protected revenue stream.– ASP increase via upgrade to TT– Agreement and warranty revolve around use of “Non Genuine Dymo

Consumables May Void Your Warranty”.

» Synergistic connectivity with other Newell Rubbermaid Tech Products.

» SME users are less sensitive to label pricing.» Fewer partners hurdles to overcome.» Bigger / Faster ramp to revenue potential.» Better / More scalable options.

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Resource Allocation

» Phase One▪Robust lead generation program.

▪Web solution/product content campaign – search engines, associations, buyers guides, resource guides, whitepapers etc.

▪Membership to key associations.

▪One sales associate.

» Phase Two▪ System Engineer / Technical Project Manager

▪ Additional sales associate.

▪Nominal tradeshow exposure.