Digital Media Services WAEA Conference & Educational Workshops 2007 May 23 – 24, 2007 – Zurich, Switzerland Portables Session Scott Ralston Director Business Development, Thales Avionics

Digital Media Services Thales Avionics, Inc.Company & Division Overview Thales Avionics, Inc. - Company & Division Overview One of Two Leaders in the IFE Systems Marketplace Global Presence with Headquarters in Southern, CA Turnkey Approach Turnkey Approach Products, Services & Support Products, Services & Support More Than Forty Years Experience More Than Forty Years Experience Began with simple Personal Control Units (PCU) Began with simple Personal Control Units (PCU) Evolved to Elaborate, Web-Based Intranets in the Sky Evolved to Elaborate, Web-Based Intranets in the Sky

Digital Media Services Product Philosophy on Portables CurrentDevices Fulfilling Specific Market Niche Current Devices Fulfilling Specific Market Niche Integral to Long Term Strategy at Thales Anticipate Proliferation of Consumer Devices over Next Decade Anticipate Proliferation of Consumer Devices over Next Decade Demand for Content Anywhere / Anytime Increases Demand for Content Anywhere / Anytime Increases 800 million - Projected # of Cell Phones Sold in million - Projected # of Cell Phones Sold in 2007 > 80 million- Nokia’s 3G Market - “Media Enabled Phone” > 80 million- Nokia’s 3G Market - “Media Enabled Phone” > 8 million- iPODS Sold in Q > 8 million- iPODS Sold in Q Downloads- Bigger Market than CD’s or DVD’s Downloads- Bigger Market than CD’s or DVD’s

Digital Media Services Obstacles to Overcome – Content Owners Answer the Call… DRM Digital Rights Management Gains Acceptance Digital Rights Management Gains Acceptance Proprietary Methods > Standard Methods Proprietary Methods > Standard Methods Ubiquity Ubiquity Technology Increases Ability to Effectively Repurpose Content Technology Increases Ability to Effectively Repurpose Content Market Maturity Market Maturity Legal Distribution Channels Prevailing Legal Distribution Channels Prevailing

Digital Media Services Identifying & Converting the Opportunity Identifying & Converting the Opportunity Market Price Established by Consumer / Ground Based Models Option to Purchase / Rent Content on the Aircraft Option to Purchase / Rent Content on the Aircraft “Grazing” Becomes More Prominent Dead Time Filled by Electronic Distraction Dead Time Filled by Electronic Distraction Motivation Reaches Beyond Capturing Passenger Spending Motivation Reaches Beyond Capturing Passenger Spending Global Brand Image Cultivation Global Brand Image Cultivation Special Services Capture & Retain Customer Loyalty Special Services Capture & Retain Customer Loyalty

Digital Media Services Enabling Innovation Enabling Innovation General Interface between IFE System & Consumer Devices Audio & Video Output of Devices to Inputs of Embedded System Audio & Video Output of Devices to Inputs of Embedded System Power for Consumer Devices (USB and 115 VAC) Power for Consumer Devices (USB and 115 VAC) MobileIFE™ MobileIFE™ Range of Services and Revenue-Generating Options Range of Services and Revenue-Generating Options Pay-Per-Access for Applications and Content Pay-Per-Access for Applications and Content Content Sales Direct to PAX Portable Devices Content Sales Direct to PAX Portable Devices Content Revenue for Streaming Media to PAX Devices Content Revenue for Streaming Media to PAX Devices Sponsored Web & Microsites Sponsored Web & Microsites Catalog Sales Catalog Sales Web Portal ( Web Portal (

Digital Media Services end. end.