1. www.strategyanalytics.com 1 M-Learning Forum Market Trends in Mobile and Wireless Phil Kendall Director Global Wireless Practice, Strategy Analytics pkendall@strategyanalytics.com

2. www.strategyanalytics.com 2 Agenda Wireless Data Now –Key Trends and Emerging Dynamics –The Wireless Data Story to Date The Future for Wireless Data –Identifying Winning Segments –Identifying Winning Applications –Identifying Winning Devices

3. www.strategyanalytics.com 3 Wireless Industry Macro Trends Global Wireless Subscribers approach 1.8 billion by 2006 - penetration in developed markets will exceed 80%; High Bandwidth services will sentence voice to the ICE Age; Entertainment, Content and Commerce will be dominant in the second half of this decade; Success for Wireless Operators will be closely linked to their ability to: –gain a first mover advantage in advanced network technologies (location, voice navigation, unified messaging, etc.); –develop extensive customer profiles and exploit these to connect with customers on a personal level; –embrace and engage content and media empires. New marriages between content, computer, communication and automotive industries will emerge & mVNOs proliferate

4. www.strategyanalytics.com 4 Key Challenges for Wireless Industry CUSTOMER ACQUISITION CUSTOMER RETENTION VALUE CREATION –improving voice usage still critical; –tapping into data revenues ASAP a must.

5. www.strategyanalytics.com 5 W.Europe: Value-added Service Usage SMS penetration still increasing - less than 20% of users have NEVER received an SMS. Usage of Information services still failing to generate the momentum of person to person text messaging.

6. www.strategyanalytics.com 6 Youth Segment Opportunity for SMS/Data

7. www.strategyanalytics.com 7 WAP Still Lacks Strong Content

8. www.strategyanalytics.com 8 W. European WAP Service Usage Mopilot survey - 3Q 2000 T-MOTION - best used services: Information (News, Business news, Weather) - 25% Games - 20% Community (Dating zone, Chat, Pride Guide) - 16% Search (Phone directory, Yellow Pages, Doctor seach, Jobs) - 15% BUT usage is very low - less than 10 minutes/user/month

9. www.strategyanalytics.com 9 i-mode Usage Patterns Most popular unofficial i-mode sites are in the “dekai” category - meetings and encounters. DoCoMo does not support mobile community/chat services via the i-menu.

10. www.strategyanalytics.com 10 Passing The Test: 2-Stage Content Filtering Video Winning content will appeal to.... Audio Print Beliefs & Values Fun Security What value does mobility add? Always On... Always There Location - Aware

11. www.strategyanalytics.com 11 Key Target Segments for Mobile Content Trait: Lifestyle Segments Networked Youth Concerned Parents Team Leader Active Seniors Traveling Executive Individual Contributor Career- Focused Security- Minded Fun- Loving Socially Aware Family- Minded

12. www.strategyanalytics.com 12 Key Target Segments for Mobile Content

13. www.strategyanalytics.com 13 Interest in Emerging Consumer Applications Note: Willingness to pay among users expressing an interest. Youth demonstrated strong interest and willingness to pay for multimedia applications.

14. www.strategyanalytics.com 14 Interest in Multimedia Content (Willingness to Pay among users expressing an interest.) The youth market remains a major demand segment for multimedia content.

15. www.strategyanalytics.com 15 Interest in Emerging Business Applications Note: Willingness to pay among users expressing an interest.

16. www.strategyanalytics.com 16 Core Business Application Segments Those cellular users already using a laptop or PDA to access e- mail/corporate LAN when out of the office (mainly via fixed lines) are much more interested in emerging wireless applications.

17. www.strategyanalytics.com 17 Cellular Data Evolution Messaging will continue to drive European cellular data revenues for some years. Entertainment and Content will dominate in the second half of the decade.

18. www.strategyanalytics.com 18 W. European Data Penetration Devices will remain a significant bottleneck for wireless data penetration. The right devices will be available (though late) - the challenge will be to get them into the hands of the right users at the right price.

19. www.strategyanalytics.com 19 2.5G Meets Most Data Needs Most Data Usage will be of applications which have more modest bandwidth requirements than those offered by 3G.

20. www.strategyanalytics.com 20 Wireless Device Ownership by Technology

21. www.strategyanalytics.com 21 Cellular Phone Pricing Smartphones Wholesale Prices fall to $80 by 2005, CAGR of - 18% Multimedia terminals emerge as high price, big, and ugly but rapidly improve. Expected wholesale/fob of $600 dropping down to $250 Basic browser phones become “entry-level” by 2003. Non-browser phones virtually disappear by 2003 Smartphones take 22% share of units by 2005 representing annual unit volume of 195M

22. www.strategyanalytics.com 22 Wireless Devices Summary

23. www.strategyanalytics.com 23 Thank You…. For more information about Strategy Analytics’ research please contact: Phil Kendall pkendall@strategyanalytics.com tel: +44 1582 589813