Netbooks, MIDs and Mobile CE: A Collision of Form Factors and Use Cases Kevin Burden Practice Director – Mobile Devices

Segmenting the mobile device industry Understanding the catalysts of segment collisions Affects of pricing and platforms on market confusion Consumer desires for MIDs and Netbooks Netbooks, MIDs, and Mobile CE: Primary, Companion, or Secondary Device? Presentation Overview

Mobile Computing Landscape Between the Laptop PC and the Smartphone lies Mobile Computing MID Superphone Connected Navigation Netbook Smartbook eBook Reader UMPC Portable Media Player

Blurring the Device Lines Smartphones, MIDs, and Mobile CE Devices Are Blurring the Lines: –What is the difference between a large touchscreen smartphone with a capable Web browser and an MID that supports cellular voice? –What is the difference between a media-centric MID and a mobile PMP (think iTouch with WWAN)? –What is the difference between a navigation-focused MID and a mobile PND (think Tom Tom) with a great Web browser? How to Look at the Device: –What is the primary function? –What is the usage model? –What platform is behind the device? Multiple Device Challenge –Will targeted application devices increase acceptance?

What determines device class? ? Smartphone Netbook MID UMPC Use Case Marketing Capabilities Form Factor © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Segment Collisions Browser, GPS, Wi-Fi, Media Player, Camera Voice Size Use Case Smartbook 3G / 4G Substitute or Additive MIDNetbook LaptopSmartphone Size / Form © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Mobile Device Forecast Comparison Smartphones represent the largest device group in terms of shipments MIDs are expected to show strongest growth over next three years Netbooks and Smartbooks have begun displacing laptop sales © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Mobile Consumer Electronics

Device ASP Trends Narrow Price Gap Between Smartphones and Netbooks Value and Use cases need to be understood by consumers Smartphones, Netbooks, and MIDs may have carrier subsidies Economic downturn is not the only driver for Netbooks © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Mobile Internet Devices – by the Regions

OS Landscape – MIDs Myriad devices will be offered, not just one form factor. The mobile OS must have commonality, in terms of user experience and feel, across MID, CE, and mobile phone sectors. Power must be optimized and a power-friendly OS is a plus. Silicon solutions in this market scale between different market segments. RAM will become cheaper over time as processors become more powerful and cheaper, which could enable a PC OS to be installed in MIDs. © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Netbooks – by the Regions

OS Landscape – Netbooks The majority of netbooks have shipped with Windows XP familiarity of priority audience affordability of license Windows 7 is being introduced in October on select netbook models; replacing Windows XP and Windows Vista SKUs Android to debut on netbooks starting Q4’2009 Chrome OS from Google expected to be introduced into the PC Linux segment in H2’2010. © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Interest in Netbooks Q : Based on the description and assuming the price was right, how interested would you be in purchasing a Netbook ? N=1000 Nearly a third having only mild interest in the Netbook category, suggests additional education and positioning is needed to explain the value of Netbooks to priority audiences The relatively high PC penetration in the United States suggests that Netbooks will be a secondary machine for the majority of users Budget-sensitive users or those looking to replace an existing computer may consider a Netbook as their primary system © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

N=662 Netbook Use Case Q : Which software applications would you be likely to use on your Netbook? Netbooks are marketed as “connected” devices, using either Wi-Fi for WLAN or 3G/4G modems for WWAN access. The selection of and Web browsing as the top two applications for Netbooks is in line with this expectation. © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Are Netbooks Your Primary or Secondary Computing Device? © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Interest in MIDs Q : Based on the description and assuming the price was right, how interested would you be in purchasing a MID ? N=1000 Quick, “snack” size applications and uses are typical for handheld MID owners. The smaller screen and keyboard size make MIDs less desirable for applications that require significant content creation. Consumer interest in MIDs are at price points closer to smartphone handsets than laptop computers. The network operator channel is expected to play a significant role in the sale of MID products. © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

MID as replacement devices While platform vendors like Intel and TI (Texas Instruments) have spent time and resources developing the MID ecosystem, few products have appeared throughout 2009 MIDs are more likely to be considered when looking to replace a handset It is unlikely that consumers will consider MIDs as an alternative to a laptop computer Q : Would you use your MID as a replacement for your cell phone or laptop computer; or would you use your MID in addition to your cell phone or laptop computer? N = 543 Primary Device Secondary Device © 2009 ABI Research  abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.

Similarities in Form Factor, Operating System, Price, and Functionality have created market confusion Mobile CE devices primary and secondary status is closely tied to regional and economic conditions A “good enough” consumer attitude is allowing for the creation of low-cost mobile CE segments Devices in adjacent segments must face new competitive realities OS / Platforms must increase consideration of multiple device formats.Summary

Thank You Still have questions? Visit Thank you for your time, Kevin Burden Practice Director – Mobile Devices ABI Research