HPA 2005 Technology Retreat: CE Industry Overview Brian Markwalter Vice President, Technology Consumer Electronics Association

Trend #1 A Strong and Growing Industry

CE Industry Growth 10.7% 7.1% 10.7%

Audio Quarterly Trends Units: +3.3% Dollars: +13.0%

Video Quarterly Trends Units: +1.0% Dollars: +9.8%

Trend #2 A Product Explosion

2004 Fastest Growing Products (Based on Shipment Revenues) 1.Blank DVD Media211.7% 2.LCD TV 204.5% 3.Digital Video Recorders203.9% 4.Portable MP3 Players184.0% 5.SDARS Tuners and Accessories145.1% 6.5.8Mhz Cordless Phones144.8% 7.Flash Media127.6% 8.Plasma TV58.4% 9.Digital Direct-view and RPTV40.2% 10.Mobile Video and Navigation34.8%

Trend #3 It’s All About the (Flat) Display

Digital FPD Shipments

Digital FPD Revenues

DMD Performance LCOS, LCD, DLP Rear-Projection 35% of RPTV Shipments

TV Market Composition

TV Revenue Contributions

Trend #4 Content Explosion And the Need for Storage

Digital Imaging Growth

Average Image Libraries Now Photos: 3,420 Storage: 7.2 GB In 5 Years Photos: 600 Storage: 1.26 GB

Blank DVD Media

Flash Media Growth

Digital Recording Options

Trend #5 Content On the Move

Portable MP3 Growth Flash and HD-Based

Satellite Radio Tuners and Accessories

Mobile Video Gaining Volume * Includes mobile video displays, stand-alone DVD players, and DVD changers

The Rise of MRAV 2004 Shipment Volumes Through November 2004 Units: 3.8 million Revenues: $340 million Based upon CEA’s MARA Shipment Data

Audio Server Growth YTD

DMS Purchase Plans (Base: U.S. Online Adults)

Closing 2005 International CES set records –142,585 attendees (pre-audit) –2,550 exhibitors –1.531 million net square feet exhibit space It’s great to be in CE

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