IDC at CES 2009

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Copyright 2009 IDC. Reproduction is forbidden unless authorized. All rights reserved.

Welcome!

7:30 AM - 8:00 AM Registration and Breakfast8:00 AM - 9:20 AM IDC Analyst Presentations

9:20 AM 10:00 AM Analyst Panel Discussion10:00 AM - 10:30 AM Networking with IDC Analysts

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Beyond Early Adoption:New Perspectives on Consumer Segmentation

Alicia Dowdell

Director

Computing and Consumer Primary Research

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Jan-09 3 2009 IDC

Todays sessionTodays session

Challenge of current consumer segmentations

Where todays models leave behind consumers

Segmentation based on attitudes

Why segmentation still matters

IDCs latest global research Drivers of consumer segmentation

New opportunities to reach consumers

Where and how you can better serve consumers

Q&A

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CE and ConsumerSegmentation

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Jan-09 5 2009 IDC

Traditional consumer segments shifting

as new devices are rapidly adopted

Traditional consumer segments shifting

as new devices are rapidly adopted

Families

Retirees

Still late

adopters?

Professionals(prosumers)

Early adopters

Who elsebesides affluent,

younger males?

Teens and pre-teens

Young adults or

millenials

Techiesdifferent thaninnovators that

came beforethem?

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Models based on demographics and

adoption leave questions unanswered

Models based on demographics and

adoption leave questions unanswered

What happens to earlyadopters and innovatorsas markets mature?

Where are the 70% majoritynow how do they act andwhy?

How do consumer attitudesimpact CE adoption whatare we missing?

What can consumers feelings and attitudes tell us about howmarkets will diversify, thrive, or decline?

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Jan-09 7 2009 IDC

IDC designed research to understand

consumer attitudes and ownership

IDC designed research to understand

consumer attitudes and ownership Australia

Belgium

Japan

Brazil

Canada

Netherlands

Saudi Arabia

Singapore

South Korea

Sweden

Switzerland

United ArabEmirates

United Statesof America

Source:/Notes:

Italy

Mexico

Norway

Poland

Russia

China

Denmark

France

Germany

India

Taiwan

UnitedKingdom

Thailand

* Structured survey fielded online November December 2008 (total N = 31,231 consumers aged 18 +)

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Jan-09 8 2009 IDC

Consumer feelings, responsibility, and

satisfaction w/CE drove analysis



Principal component (factor) analysisPrincipal component (factor) analysis

2 Step Cluster Analysis

Attitudes, responsibility,& feelings

Satisfaction(select devices, services)

ConsumerScape 360ConsumerScape 360 research findingsresearch findings

Methodsof

analysis

Segmentation analysis (5 consumer segments)Segmentation analysis (5 consumer segments)

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Jan-09 9 2009 IDC





Principal component (factor) analysis

ConsumerScape 360 research findings

Methodsofanalysis

How do you think and feel aboutCE and technology?

How do you feel about makingdecisions about CE devices andservices for your household?

What statement best describeshow you select a new CE devicefor your personal/HH use?

Who in your HH is primarilyresponsible for setting up, fixingproblems and/or managing thecomputer (including Internet)?

How likely are you to recommendyour brand/provider to someoneyou know (family member, friend,

co-worker, etc)? (Scale of 1 - 5,5 = Very likely/definitely)

TV service provider

Internet service provider

Mobile phone services provider Brand / manufacturer of MP3

player

Brand / manufacturer of computer(desktop, laptop/notebook)

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Jan-09 10 2009 IDC

Cluster analysis revealed 5 segments,

comprising ~92% of the total sample

Cluster analysis revealed 5 segments,

comprising ~92% of the total sampleCluster 1: Confident, experiments

Excited about experimenting/using new consumer electronics and technology

24%

Cluster 2: Comfortable, networks

Looks for advice / example of others and wait to replace than upgrade

17%

Cluster 3: Networks for CE Needs Solid understanding of how to meet HHs needs for CE, technology

21%

Cluster 4: Practical, in charge

Gathers/needs information before buying something new

21%

Cluster 5: Cautious, Brings Office Tech Home

Watches others / in person demonstration before buying new devices

17%

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Jan-09 11 2009 IDC

Segments behaved in both expected

and surprising ways

Segments behaved in both expected

and surprising ways Confident segments tended

to be younger (< 45) withmore men than women.

In contrast, Practicalsegment included morewomen (including youngwomen).

More consumers in earlyadopter or innovator typesegments maintained CEbudget for 2009.

Confident/comfortable

segments more likely toexpress optimism aboutearning potential going intonew year.

No one segment dominated byworkers vs. students / retirees/ etc.

Majority segments wereproportionate by gender andage, and included HHs withand without children.

Pervasive use of mobile

devices more consumers onthe go regardless of segment.

Many made recent CEpurchases (TV, MP3 players,or mobile phones /

smartphones) Similar penetration of digital

TV, DVD, other CE technology(although some TV sizestended to be larger screens)

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Jan-09 12 2009 IDC

Level of satisfaction across services and

devices varied among segments.

Level of satisfaction across services anddevices varied among segments.

Source: IDC, 2007

71%

67%

66%

66%

58%

Desktop

82%

76%

76%

76%

66%

Laptop /Notebook

66%68%68%60%Cautious

54%59%60%51%Practical

68%68%70%60%Networks

64%67%69%59%Comfortable

73%70%72%64%Confident

MP3InternetMobileTV

Top box analysis (% consumers within segment who definitely or werelikely to recommend their provider or brand) revealed several gaps.

Understanding which consumers need what types of service includingtechnical support can improve loyalty and reduce churn.

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Jan-09 13 2009 IDC

Essential guidanceEssential guidance

Segmentation analysis revealed differences in how consumersthink and feel about technology that cut across gender, age,and other demographic lines.

Important aspects of consumer experience to address include:

1. How they choose consumer electronics for themselves / theirhousehold.

2. Whos responsible for managing CEs and services (and why).

3. How confident or comfortable (or not) consumers feel aboutmaking decisions regarding CE and services.

4. What role new technology plays in their household and wherethey look and turn for experience and information.

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Jan-09 14 2009 IDC

Next stepsNext steps

Weight data from 26 country research for use across IDCConsumer programs

HH profiles by CE ownership, usage of services, online behavior, etc

Examine segment behavior by country in ConsumerScape 360

Continue to flesh out segment profiles

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Jan-09 15 2009 IDC

Questions?Questions?

[email protected]

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Appendix:Attitude questions by segment

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Jan-09 17 2009 IDC

Which of the statements best describes how you thinkand feel about consumer electronics or technology?Which of the statements best describes how you thinkand feel about consumer electronics or technology?

Sample Size = 28718

24%38%

13%

50%38%25%

38%27%

100%

45%

22% 16%

50%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Practical Networks Cautious Comfortable Confident

I do not think about technology or CE muchI only change devices, technology, or services as a replacement

I am personally excited about t rying new technology/like to experimentI wait to buy anything for personal use until I have a chance to try it at school/workI rely strongly on the advice and example of friends and family

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Jan-09 18 2009 IDC

In your household, how do you make decisions aboutbuying consumer electronics like TVs, stereos, or video

players?

In your household, how do you make decisions aboutbuying consumer electronics like TVs, stereos, or videoplayers?

Sample Size = 28718

45%

28%

53%58%

66%

55%

72%

47% 42%34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


I am the one who makes the decisions. I share responsibility for both decisions and payment.

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Jan-09 19 2009 IDC

How do you feel about making decisions about consumerelectronics and services for your household?How do you feel about making decisions about consumerelectronics and services for your household?

Sample Size = 28718

18%

34%42%

58%

58%

52%

58%

42%

83%

23%

13%17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


I find it a challenge. I don't always feel confident about

OK - I need and expect to get information before I am ready

Good I understand what we need and know where and how to f

Very confident - I understand new technology and know what I

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Jan-09 20 2009 IDC

Which of the following statements best describes the wayyou think about and buy products and services?Which of the following statements best describes the wayyou think about and buy products and services?

Sample Size = 28718

10%

15%

15%

19%

25%

80%

81%

78%

76%

74%

9%

4%

6%

5%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Practical

Networks

Cautious

Comfortable

Confident

If I really want something I will buy it regardless of price I like to shop around for the best price

I only buy something after it goes on sale I do not usually buy things for myself

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Jan-09 21 2009 IDC

What statement best describes the way you select a newelectronic device for personal use or for your household?What statement best describes the way you select a newelectronic device for personal use or for your household?

Sample Size = 28718

33%39%

17%

52%46%

29%

37%

17%

48% 54%8%

23%

38%

16%

43%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


%o

fR

espondents

I need to hold or handle something in person I am comfortable ordering something after reading a descript ion

I would buy after watching a demo on TV/video I am OK if I watch another person use it first

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Jan-09 22 2009 IDC

Who in your household is primarily responsible for settingup, fixing problems, or managing the computer / internet?Who in your household is primarily responsible for settingup, fixing problems, or managing the computer / internet?

Sample Size = 28718

65%

88%100% 100%

18%

54%

6%

10%

15%

10%19% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


I do Another adult in my HH

Child (13 or older) Professional or service provider

Something else (who?) A friend or relative visits to help

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The Coming Reality of Internet Video inthe Living Room

Greg Ireland

Research Manager

Consumer Markets: Video

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Jan-09 24 2009 IDC

So many possibilitiesSo many possibilities

Market drivers

The Internet video success story of 2008 was Hulu Now we have Netflix coming to devices

Cable VOD still doesnt have the right content

This means the coming of age of the DMA!

Network-enabled Video Device Shipments (,000)

0

10,000

20,000

30,000

40,000

50,000

60,000

2007 2008 2009 2010 2011 2012

DMAs and Media Servers

DVD

HDTV

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Jan-09 25 2009 IDC

Whatchootalkin bout?Whatchootalkin bout?

These things have failed in the past!

Consumers arent really interested! Other connected devices make more sense!

Traditional service providers will rule the day!

Cmon, the economy stinks!

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Jan-09 26 2009 IDC

DMAs have failed in the pastDMAs have failed in the past

True, but

Two buckets of DMAs in the past

Those that connect to the PC Those that connect to useless content

Whats different now? Connectivity direct to BB content

Content is from established content destinations

And its content people want

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Jan-09 27 2009 IDC

Consumers arent really interestedConsumers arent really interested

Explaining new consumption paradigms isnt always easy

Early implementations did little to drive interest

Expensive devices No real content, or limited content

No prior consumer relationship with content providers

But, consumers are watching more TV shows and movies online There is interest in viewing this content in the living room

This is content that often isnt available from cable

New devices can build on existing and growing consumer

association with established content providers

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Jan-09 28 2009 IDC

Other connected devices make senseOther connected devices make sense

But

Connected TVs are caught in a replacement cycle dilemma

Network-enabled Blu-ray makes tons of sense, but doconsumers believe that Blu-ray itself makes sense?

Game consoles perhaps the best positioned, but limited appeal

to non-gaming households

Meanwhile

DMAs can be lower cost And promoted specifically as content acquisition devices

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Jan-09 29 2009 IDC

Service providers are well positionedService providers are well positioned

But

Will they get their act together?

Slow to move the right content onto VOD

Much of what they have is still SD

Who believes that the integration of BB video and the STB willtake place soon? Or be a viable solution?

The battle between content companies and service providers is

going to get more tense, and content companies have a lot ofleverage

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Impact of the economic turmoilImpact of the economic turmoil

First the bad news

Cuts in innovation expected in 2009

CE focus on existing product lines

Consumer spending under pressure

But

Home-based entertainment value proposition

Evolution of existing behavior transition

Innovative products are still emerging as leaders work to createnew consumer experiences

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Jan-09 31 2009 IDC

Playing in the sandboxPlaying in the sandbox

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Jan-09 32 2009 IDC

Things to considerThings to consider

Future outlook

Still not a mass market opportunity

Traditional cable services arent going away any time soon

Pay TV providers do have much to lose, but can work to protectthemselves from the over the top threat

but

2009 wont be a lost year for consumer behavior evolution

Coming out of the recession, dont count out those DMAs

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QuestionsQuestions

Contact me at:

[email protected]

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Customer Support and The Digital HomeAre Technology Players Ready to face the Coming Storm?

Matt Davis

Program Director

Multiplay Services

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Jan-09 35 2009 IDC

Todays DiscussionTodays Discussion

The Case for Convergence

The Drive for New Services

The Coming Storm

Customer Support and the Digital Home

Essential Guidance

The Case for Con ergence Ser iceThe Case for Convergence Service

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Jan-09 36 2009 IDC

The Case for Convergence ServiceProvider PerspectiveThe Case for Convergence ServiceProvider Perspective

Wireless voice revenues flattenedtowards the end of 2008 signsthat the market has finally matured wireless data the great hope

Wireless

Cable TV net subscriber growthhas been flat at the 100 million HHmark with meaningful competitionemerging from IPTV and potentialover the top displacement

disrupting existing distributionmodels price pressure willincrease

VideoVoice

Net broadband additionshave been approximately10 million a year in 2006and 2007 they will shrinkto about 6 million in 2008

Broadband

Local Consumer VoiceRevenues have fallen fromover 6% over the past year

AT&T and Verizon arelosing a combined 2 millionlines each quarter

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Jan-09 37 2009 IDC

86.00%

84.00%

81.00%

83.00%

83.00%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Broadband

Wireless

Local Voice

Television

Bundle

Are you planning to switch in the next 12 months?No

Churn intenders Does the Bundle Matter?Churn intenders Does the Bundle Matter?

Source: IDC 2008

Standalone

No bundle no problem

Plain old stasis rivalsIncumbency as a key forstaying put

However, bundling isimportant, it is essential toprofitable consumerARPU and the gateway tonew service delivery

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Jan-09 38 2009 IDC

Where will differentiation come from?Where will differentiation come from?

Cable

Telco

Cable modem

DSLLocal/LD

FTTP/N

IPTV

In-home content sharing

Wireless integration

Wireless Entertainment

Docsis 3.0

VoIP

DVR

VOD

Digital Cable

Both will have the ability to offer a 500 channelMulti-room DVR, VOD, HDTV capable video package thatincludes caller ID on the TV, remote DVR controland access, content movement around the home,unified communications, video calling etc..

HDTV

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Text Messaging on TV

Convergence and ComplexityConvergence and Complexity

Voice

Broadband Video

Wireless

Caller ID on TV

PC to TV IntegrationStreaming Internet Video

Convergence and Complexity

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The March to ConnectivityThe March to Connectivity

Never Networked Sometimes Networked Always Networked

Televisions

Set Tops

DVRs

Landline Phones

Digital Cameras

MP3 Players

Gaming Consoles

SmartPhones

PCs

Laptops

Modems & Routers

Printers/Peripherals

Growth of IPTVVoIP

Online Gaming

Faster LANs

Media Adapters

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The Coming StormThe Coming Storm

The number of devices is

growing

The complexity and

connectivity of the devicesis increasing

Networked devices createmore trouble tickets

% of devices that required external% of devices that required external

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Jan-09 42 2009 IDC

% of devices that required externalsupport% of devices that required externalsupport

0% 5% 10% 15% 20%

Smart Phone/PDA

DVR/Tivo

Gaming Console

Wireless/Wired Routers

Set Top Box

LaptopExternal Storage

MP3 Player/iPOD

DVD Player

Digital Camera

PC

Printer

Mobile Phone

TV

% of Problems

All the devicesrequired some

external support

Experienced a support issue in the past 12 months?

C SC S F

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Jan-09 43 2009 IDC

Customer Support ForecastCustomer Support Forecast

0

0.5

1

1.5

2

2.5

3

2007 2012

Customer SupportCost (In Billions)

Customer support Growth Forecast

What companies will provide the bulk of customer support?

First contact customer support isexpected to migrate from phone toonline support however networkedproblems will demand more Tier 2

support creating more time andexpense

Wh G C d?Wh G t C t t d?

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Jan-09 44 2009 IDC

Who Gets Contacted?Who Gets Contacted?

Service

Provider

26%

Tech

Manufacturer

67%

Retail Chain

7%

Computing

Service

Provider

21%

Tech

Manufacturer

61%

Retail Chain

18%

Service

Provider

38%

Tech

Manufacturer

47%

Retail Chain

15%

Mobile

Entertainment

E i O t iti & Ch llE i O t iti & Ch ll

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Emerging Opportunities & ChallengesEmerging Opportunities & Challenges

Service Providers are beginning to understand theproblem and are putting programs in place

Remote diagnostic tools are maturing for the PC the next step is other networked devices

There is still a gulf of understanding andcollaboration between network operators and

consumer electronics vendors

CE companies have typically used broadbandnetworks but have not been true participants

E ti l G idE ti l G id

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Essential GuidanceEssential Guidance

New services are key to growth for all players howeverincreased networking will lengthen customer support contacts andincrease expense

Consumer electronics companies need to understand that anetwork-based problem is actually their problem too consumersare not going to care where the breakdown occurs in the chain they will purchase CE and associated content if it is easy and willadopt slowly if it is difficult

Better service support portals, home installation, remotemanagement services will ease the pain of complexity

Neither network based service providers nor consumerelectronics companies can tackle the challenge in a vacuum youneed each other

Q estionsQuestions

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QuestionsQuestions

Please contact me at:

Ph: 508 935 4254

Email: [email protected]

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How Is The Global Recession ImpactingSemiconductor Demand and TechnologyAdoption in CE and Mobile Devices?

Mario Morales

Program Vice President

Semiconductors

Takeaway PointsTakeaway Points

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Takeaway PointsTakeaway Points

Semiconductor industry downturn prolonged by slowrecovery in consumer and mobile phone segments

Multicore microprocessor SOCs enable richer internetexperience and convergence of CE and mobiledevices

Connectivity technologies and combo chips begin toramp in the 2H09 in smartphones and consumer

Portable media storage shifts almost completely to

NANDEmerging devices offer volume opportunities forsuppliers who can deliver on a complete platform

Macroeconomic RealityMacroeconomic Reality

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Jan-09 50 2009 IDC

Macroeconomic RealityMacroeconomic Reality

Global recession effects credit, funding of IT, and consumer spending

Downturn in consumer spending will be the key issue in 20092/3 of Americans own homes and 1/2 own stockDeclines in both markets bode poorly for spending

over the next 2 years

Markets need confidence and leadership to reach bottom and stabilize sooner. Interest rate cuts,tax cuts, infrastructure investments, and new stimulus package will bring relief by 2H09 and 2010

Negative impact for start-up companies who have 1 or 2 quarters of cash. Recession alsodelays necessary consolidation among semiconductor suppliers who are not willing tomove forward on M&A using cash

Economy wont bottom until the end of 2009 and wont recover until mid 2010. USwill lead the worldwide recovery

1H09 will be more severe than 4Q08 due to business seasonality and currentutilization levels of suppliers

Overall capital spending cutbacks match the same level of pull back as last yearwhich is essential to easing the oversupply (DRAM, NAND, and foundry)

Companies with solid leadership and experience, and a healthy financial structurewill be in the drivers seat when the market recovers

Semiconductor Revenue NegativelySemiconductor Revenue Negatively

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g yImpacted by EconomyImpacted by Economy

-15%-10%

-5%

0%

5%

10%

15%

2007 2008 2009 2010 2011 2012

PC Mobile Phone Consumer

Percentage Growth

Market Landscape-Overarching TrendsMarket Landscape-Overarching Trends

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Market Landscape-Overarching TrendsMarket Landscape-Overarching Trends

Nearly 1.4 billion people are accessing theinternet today, by 2012 the number will reachnearly 2 billion

Over 1.1 billion users will be accessing theinternet on mobile devices

3G/4G/WiMax subscribers will reach over1.4 billion by 2012

Internet video will become mainstream by2011 in TV households

Over 1.5 billion devices are being used to accessthe internet today, by 2012 the number of deviceswill more than double

Almost half of the devices will be connectedby 2012

Wireless broadband (100Mbps) will enable richercontent and broaden the reach of mobile devicesand services

However, content and usage models willultimately dictate the path of device innovation

Internet

Moores Law

Processi

ng Connectivity

Storage

Complexity

Demands

Enables

Security

Management Software

2008 2012

Users ~1.4B ~1.9

Devices 1.5B+ 3B+

2008 2012

Process 45nm 22nm

Transistors

820M 1.5B

Source: IDC

Microprocessors Drive EmbeddedMicroprocessors Drive Embedded

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Device GrowthDevice Growth

Embedded microprocessorsmoving from general purposeproducts to the centerpiece of everymajor device platform

Multimedia demand andadoption growing across alldevice segments

Digital home, connecteddevices driving the need formultiple data engines andcores

converging services and devices

require support of multipleapplications in parallel

Mobile applications demandingmore performance at lowerpower

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2007 2008 2009 2010 2011 2012

Unit Forecast (MU) CAGR 15%

Estimates include ASSPs, ASICs, and Standalone processors.Volume includes mobile phones. Does not include PCs.

Integration of ConnectivityIntegration of ConnectivityT h l i

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TechnologiesTechnologies

Integration when attach rates approach ~25% +

Targeting upper range multimedia and smart

phones, but migrating into mainstream andconsumer and PC areas

FM/BT common, BT/WiFi/FM ramping,BT/GPS/WiFi/FM/NFC emerging

ImageSensor

ISP BluetoothBB

BluetoothRadio

Digital

Baseband

Processor

Transceiver

Power

Amplifier

Apps/Media

Processor

Baseband

Analog

GPSBB

GPSRadio

WiFiBB

WiFiRadio

DTVDemod

DTVTuner

MDRAM

NAND

SRAM

NOR

FMTransmit

FMReceiver

NFCBB

NFCRadio

Integration Trends

Multi-RadioIntegration

WLAN

Bluetooth

FM

MobileTV

GPS

Combo Connectivity Chip SolutionsCombo Connectivity Chip Solutions

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Combo Connectivity Chip SolutionsCombo Connectivity Chip Solutions

Not just multiple radios on a single chip but also moresoftware that enable more adaptable devices

0%

10%20%

30%

40%

50%

60%70%

80%

90%

100%

(%)

2007

2008

2009

2010

2011

2012

% Stand alone

% Combo chips

Includes Bluetooth, FM radio, GPS, WiFi, WiMAX, UWB,Mobile TV, and NFC solutions

Combo chips as apercentage of all

connectivity solutions areexpected to grow from 20%

in 2007 to over 60% in 2012

Mobile Phone SemiconductorC ti it Ad tiMobile Phone SemiconductorC ti it Ad ti

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Jan-09 56 2009 IDC

Bluetooth, FM radio and GPS will have the highest attach rates in mobile phonesin 2012, although all technologies are expected to experience robust growth

Connectivity AdoptionConnectivity Adoption

WW Mobile Phone Chipset Shipments by Technology

0

100

200

300

400

500600

700

800

9001,000

2007 2012

Millionsunits

Bluetooth- CAGR = 13%

FM- CAGR = 16%

GPS- CAGR = 13%

WiFi- CAGR = 54%

WiMAX

UWB

Mobile TV- CAGR = 108%

NFC- CAGR = 313%

Portable Devices and Media ShiftsAl t E ti l t NANDPortable Devices and Media ShiftsAl t E ti l t NAND

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Almost Entirely to NANDAlmost Entirely to NAND

Over 600 million flashmemory cards will ship thisyear

Majority of MP3s are NANDbased devices. PMPs andMIDs will also follow the same

pathBy 2012, almost 45% of totalNAND bit demand shipments

will come from mobile phonesSSD will account for 10% ofNAND demand by 2012

Source: IDC Semiconductors January 2009

NAND Bit Consumption by Market

0%

10%

20%

30%

40%

50%

2007 2008 2009 2010 2011 2012

DSC PMP(F) Mobile USB SSD

Emerging Devices: Netbook and MIDEmerging Devices: Netbook and MID

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Emerging Devices: Netbook and MIDg g

More devices per home (secondary device)

More devices connecting to the internet

Simple and affordable devices that connect to the internet. Always on and

connected

Internet in your hand: Apple iTouch, Blackberry Storm, Nokia, Samsung, G1,and many more

$200-$250 price point will be the battleground for market acceptance

Intel, TI, Qualcomm, Marvell, and others launching architectures specifically aimedat these new categories. Enables more development and design. Linux, XP, andWindows 7 will all have a play in these emerging device categories

Device attributes: Connectivity not optional, LCD size determines functionality,

power (> 1W), flexible storage required, and system integration criticalContent and usage models will dictate the path of device innovation, businessmodel, and market acceptance

Apple has the right formula today, but consumer and mobile markets haveroom for more platforms and services

Closing ThoughtsClosing Thoughts

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g gg g

Despite the downturn in the market there are real opportunities for suppliersas the business models, devices, and services continue to evolve

Connectivity, multicore SOCs, and NAND are the key critical technologiesin consumer and mobile

Several portable CE categories are maturing or soon will be

As competition from smartphones and feature phones challenge the standalonedevices

Netbooks will grow at a CAGR of nearly 40% in units over the next five years,but will remain limited in terms of semiconductor revenue opportunity

MIDs will be a unique segment, but will largely grow at the expense oftraditional PMPs and PNDs over the next couple of years. Smartphones willtake over segment in the long term

New usage models, richer content drives, more technology opportunities for suppliers

Entire ecosystem must continue to invest in user interfaces that offer an internet experiencewithout compromise

Content will need to be further refined to create real, sustainable business models for the

entire value chain for these new devices to prosper

QuestionsQuestions

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IDC at CES 2009