1. Ten Surprising Facts About Consumers And Technology Ted SchadlerCharles S. Golvin VP & Principal AnalystPrincipal Analyst Forrester Research September 1, 2005. Call in at 10:55 a.m. Eastern Time

2. Theme Tech attitude is key to determining consumers’ technology behavior

3. Agenda What is Consumer Technographics ® ? Ten surprising facts about consumers and technology Why is consumers’ technology attitude important?

4. Consumer Technographics ™ Benchmark Study Fielded in January and February 2005 68,884 households 347 consumer brands The largest, longest-running consumer survey of technology adoption and use.

5. More than 700 data points in 12 areas Demographics Devices and access Online activities Financial services Mobile and telecom Television Retail Media and advertising Healthcare Travel Auto Government

6. 700 data points for 69,000 consumers means we can answer a lot of questions What shopping attitudes and retail behaviors characterize low-income households in Texas? Which PC brands do women over 40 with college degrees and three children prefer? Which high-income households bank online over broadband? What search engines do they use? Which media do seniors consume most online? How do consumers research medical conditions?

7. Agenda What is Consumer Technographics ® ? Ten surprising facts about consumers and technology Why is consumers’ technology attitude important?

8. Ten surprising facts about consumers and technology 1.Three times as many technology optimists as pessimists use the Internet frequently.

9. Technology attitude segments the population

10. Tech attitude correlates with age and income...

11. ... but is also independent of them Base: North American households, * Online North American households

12. Ten surprising facts about consumers and technology 1.Three times as many technology optimists as pessimists use the Internet frequently. 2.Broadband is just now reaching the mainstream.

13. Broadband reaches 28% of US — and 37% of Canadian — households today

14. Broadband is going mainstream 2004 44% 20% 15% 2000 to 2001 56% 16% 18% 10% High-income optimists Low-income optimists High-income pessimists Low-income pessimists Up to 1999 64% 15% 5% Base: new broadband subscribers in each time frame (percentages may not total 100 because of rounding)

15. Price is a likely factor in DSL gaining ground

16. Ten surprising facts about consumers and technology 1.Three times as many technology optimists as pessimists use the Internet frequently. 2.Broadband is just now reaching the mainstream. 3.Home networking is stalled below 10% of households.

17. Home networkers are early adopters 57% 21% 16% 6% High income optimistsLow income optimists High income pessimistsLow income pessimists Base: North American households with a home network

18. Sharing broadband is the No. 1 motivator for getting a home network

19. Broadband Both drivers grow healthily; home networking will reach 40% of US households by 2010 0 20 40 60 80 100 120 1998199920002001200220032004200520062007200820092010 All US HouseholdsInternet PCLaptopMulti-PC Home network Millions of US households Base: US households

20. Ten surprising facts about consumers and technology 1.Three times as many technology optimists as pessimists use the Internet frequently. 2.Broadband is just now reaching the mainstream. 3.Home networking is stalled below 10% of households. 4.Half of 18-25-yr-olds use cell phones for long distance.

21. Cell phones displace land line phones for long- distance calls, especially in young consumers

22. Fifteen percent of mobile users use data services, particularly for communications apps

23. Ten surprising facts about consumers and technology 1.Three times as many technology optimists as pessimists use the Internet frequently. 2.Broadband is just now reaching the mainstream. 3.Home networking is stalled below 10% of households. 4.Half of 18-25-yr-olds use cell phones for long distance. 5.Sharing photos is the fourth-most popular online activity.

24. Digital camera adoption is exploding

25. Photo sharing trails only email, shopping, and online research

26. Ten surprising facts about consumers and technology 6.This is the device decade of the century. ;-)

27. On average, households own five devices today — on their way to more than six devices by 2010

28. Ten surprising facts about consumers and technology 6.This is the device decade of the century. 7.Three percent of households publish blogs; 6% read them.

29. The blogosphere is tiny — and a bit incestuous

30. Ten surprising facts about consumers and technology 6.This is the device decade of the century. 7.Three percent of households publish blogs; 6% read them. 8.Internet nomads watch 3 hours per week less TV.

31. Laptops and home networks correlate with changing consumer behavior Internet nomads spend $120/quarter more online than broadband-only households. Internet nomads watch 3 hours per week less TV. Technology optimists spend 5 more hours online per week.

32. Ten surprising facts about consumers and technology 6.This is the device decade of the century. 7.Three percent of households publish blogs; 6% read them. 8.Internet nomads watch 3 hours per week less TV. 9.Twice as many technology optimists as pessimists shop online.

33. Online retail grows as broadband and home networks are adopted... Online shopping added 3.5 million households in 2004. Twice as many online shoppers are tech optimists today. 10 million more tech optimists — and 6 million more tech pessimists — will shop online by 2010.

34. Ten surprising facts about consumers and technology 6.This is the device decade of the century. 7.Three percent of households publish blogs; 6% read them. 8.Internet nomads watch 3 hours per week less TV. 9.Twice as many technology optimists as pessimists shop online. 10.The importance of brand is at a new (low) level.

35. “Please indicate how strongly you agree with each of the following statements.” Base: US households Source: Forrester's Consumer Technographics® North American Studies The importance of brand is falling, and the importance of price is growing Percent of consumers who agree with statement 30 50 70 200020012002200320042005 When I find a brand I like, I stick with it. Price is more important to me than brand names.

36. Agenda What is Consumer Technographics ® ? Ten facts about consumers and technology Why is consumers’ technology attitude important?

37. Technology attitude segments the population 1 2 3 4

38. Each segment: Has a different technology pain threshold. Uses the Internet in different ways — if at all. Has a different marketing profile.

39. More technology optimists are receptive to new products — and are social networkers More tech optimists More pessimists

40. Ted Schadler tschadler@forrester.com Charles S. Golvin cgolvin@forrester.com www.forrester.com Thank you Entire contents © 2005 Forrester Research, Inc. All rights reserved.