IDC CTIA Mobile and Wireless March 23, 2004

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IDC _at_ CTIAMobile and WirelessMarch 23, 2004
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Morning Overview

• Coverage Overviews
• Analyst Panel
• Shiv Bakhshi, Ph.D., Research Manager
• Richard Dean, Program Director
• Steve Drake, Program Manager
• Scott Ellison, Program Director
• Sally Hudson, Research Manager
• Allen Leibovitch, Research Manager
• Paolo Pescatore, Senior Analyst
• Elisabeth Rainge, Program Director
• Alex Slawsby, Senior Analyst
• Dana Thorat, Senior Analyst

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Wireless Network Infrastructure A Cautious
Optimism

• Shiv K. Bakhshi, Ph.D. Research
  Manager
  Mobile WiFi Infrastructure

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Mobile Infrastructure Cautious Optimism

• Industry more positive on 3G networks this year
• 3G networks, handsets, content becoming available
• Multimedia, Push-to-X seen as driving network
  usage
• Growing emphasis on core networks, billing
  charging
• Serious effort to bridge consumer, enterprise
  networks
• WiFis revenge Vendors talk up HSDPA, UMTS
  wont cut it
• Regional differences Contingent conditions
  affect trajectories
• Developing economies gain salience in vendors
  eyes

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Changing Environment Complexity
In mobile data universe, there are no killer
applications Its the killer environment,
stupid
Different competencies, different
players
No player able to deliver, or
support, all elements of emerging
telecom environment
Traditional cellular vendors rethink
business models
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Traditional Vendors, New Roles
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Traditional Vendors, New Roles

• Elements of orchestration
• Test network elements for interoperability
• Architecture planning
• Manage network complexity
• Design, implement solutions that map to client
  objectives
• Manage network migration
• Change in business model
• Partners of network operators, not mere suppliers
  of boxes
• More skin in the game
• Redefine role as network integrator

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Software Infrastructure and Security in Mobile

• Sally Hudson
• Research Manager, Mobile Security Software

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Mobile Security A Whole New World of Worries
for IT

• Hidden infrastructure mobile-enabling
  technologies that access corporate IT resource,
  but were purchased by users and are outside the
  control of IT
• Network services (broadband and wireless)
• Network equipment (broadband modems, routers,
  firewalls, wireless access points)
• Systems (desktops, laptops, PDAs, and smart
  phones)
• Software (applications, security, games,
  synchronization, wireless, messaging, and file
  sharing)

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End-point Security Corporate Client Security

• Personal firewalls
• VPN (IPSec SSL)
• Authentication, authorization, and centralized
  administration
• Secure messaging
• Web filtering
• Anti-virus
• Spam protection

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Mobile Security Software

• Multi-layered approach necessary in the
  enterprise
• secure messaging,email, web-browsing first
  wave
• increasingly, company data will be accessible
  via smart phones, PDAs and tablet devices as more
  applications (e.g. CRM, ERP) are mobilized
• STRICT security policy enforcement and management
  are key to avoiding hidden infrastructure risks
• The Next Frontier Web Services, TCP, M2M

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U.S. Wireless Landscape

• Scott Ellison
• Program Director, Wireless and Mobile
  Communications

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Regional Services Trends Overview

• U.S. Continued Strength
• Great subscriber adds
• Strong data showing
• Surpassing Europe on certain multimedia metrics

• Europe Still Moving Forward
• Still feeling effects of 3G license auction
• Wireline replacement a major consumer trend
• Non-SMS data revenue a bit disappointing

• Asia/Pacific Actually Two Markets
• Great 3G FOMA metrics being reported by DoCoMo
• Main growth in developing countriesvoice and SMS
• A key challenge how to deliver at low price
  points

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Changing Competitive Landscape

• Emergence of Mega-Carriers
• Mid-Tier is now yesterdays majors
• Enormous scale available to be leveraged
• Increases competitive pressure on other carriers
• Differentiation key to successplenty of room

• More Brands Enter as MVNOs
• Virgin Mobile proved the business model
• Effective way to reach increasingly segmented
  market
• ATT Corporation, Disney, Sports brands
• Reduced churn could make it very profitable

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Changing Wireless Environment

• Evolution of Data Capabilities
• Moving very quickly
• Wireless as a remote access solution?
• As a broadband competitor?
• Who would make LD calls over wireless?

• Market Receptive to Data Applications
• SMS took off in less than 18 months
• MMS numbers greateven without interoperability
• Traction of wireless LAN, set against EV-DO
  rollout
• Data pricing pressure emerging
• Two key milestones coming up
• EV-DO rollout completion
• 2 Megapixel camera phones

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Mobile Device Trends

• Alex Slawsby
• Senior Analyst, Mobile Devices

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Mobile Device Trends

• Mobile Phones
• 3G availability vs. case for adoption
• 2.5G upgrades/replacements continue
• Content/technology evolves (games, imaging,
  music, GPS, Push-To-Talk)

• Converged Mobile Devices
• Voice-centric consumer focused push to
  multimedia
• Data-centric enterprise focus push to business
  solutions
• Volume accelerates led by consumer, watching
  re-convergence

• Handheld Devices (The PDA Legacy)
• Is there opportunity beyond PIM?
• Redefinition from PDA to MP3 to beyond?

• Notebook PC
• Desktop replacement accelerating
• WiFi standard, 3G solutions an option for mobile
  professional

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Mobile User Segmentation Models

• Dana Thorat
• Senior Analyst, Mobile User

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New Customer Segments Emerging

• Mobile Workers

Source Exploring Usage Models in Mobility A
Cluster Analysis of Mobile Users, November 2003
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New Customer Segments Emerging

• Mobile Consumers

Source Hitting a Moving Target Consumer Life
Stage Segmentation for Mobile Technology, March
2004
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Mobile Phone Semiconductors Moved by Multimedia

• Allen Leibovitch
• Program Manager, Wireless and Consumer
  Semiconductors

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Summary

• 2.5G and 3G in full swing
• Design, manufacturing shifts horizontally
• Higher semiconductor content leading to higher
  carrier ARPU multimedia drives chip content
• Applications processors and multimedia
  coprocessors see strong growth
• Memory is second largest subsystem in mobile
  phones
• Flash grows, NOR dominates while NAND penetrates
  on-board and removable cards, MDRAM takes over,
  MCP grows

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Mobile Phone Semiconductor Revenue by Chipset
Features
Source IDC Semiconductors, 2004
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Applications Processor and Multimedia Coprocessor
Forecast, 2003-2008

• Applications processors include
• High-end multimedia OMAP1xxx/2xxx, Bulverde
• Integrated baseband OMAP7xx/8xx, Manitoba,
  Hermon, MSM7xxx
• OS-focused PXA25x26x, OMAP3xx, i.MX, Nexperia
• Coprocessors include
• Multimedia applications coprocessors SH-Mobile,
  MiMagic, Nomadik, ER45xx, J22xx
• Multimedia coprocessors GoForce, Imageon,
  TC352xx
• Camera processors and LCD controllers

Source IDC Semiconductors, 2004
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Mobile Phone MCP Memory and Technology Splits
Source IDC Semiconductors, 2004
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QA