Henry Blodget

The Future Of Mobile: 2014 Henry Blodget BI Intelligence

Henry Blodget CEO & Editor-in-Chief, Business Insider

Marcelo Ballvé, Editorial Director

Tony Danova, Research Analyst

Cooper Smith, Research Analyst

John Heggestuen, Research Analyst

BI Intelligence is a new subscription service from Business Insider that provides in-depth insight, data, and analysis of the mobile industry. More info at intelligence.businessinsider.com

PCs are now small share of connected devices… Global Internet Connected Device Shipments 1,800,000,000

1,600,000,000

1,400,000,000 Wearables 1,200,000,000

Smart TVs Tablets

Units

1,000,000,000

800,000,000

600,000,000 Smartphones 400,000,000

200,000,000 Personal Computers 0 2000

2001

2002

2003

2004

2005

2006

Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates

2007

2008

2009

2010

2011

2012

2013E

Almost 1 billion smartphones shipped in 2013 Global Smartphone Shipments By Manufacturer 325,000,000 300,000,000 275,000,000

Motorola BlackBerry HTC

250,000,000

Nokia Windows Phone

225,000,000

ZTE

Units Shipped

200,000,000

Sony Ericsson Lenovo

175,000,000 Huawei

LG

150,000,000 125,000,000 100,000,000 Other

Apple

75,000,000 50,000,000 Samsung

25,000,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 Source: BI Intelligence Es mates

“Phablets” filling in the gap… Demand For Phablets Is Skyrocke ng In Asia 27 Phablet 24

Millions Of Units Shipped

21 18 Laptop 15 12

Tablet

9 6 3 0 2011 Q4

2012 Q1

2012 Q2

2012 Q3

Source: Interna onal Data Corpora on August 2013 "Asia" excludes Japan and includes Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam.

2012 Q4

2013 Q1

2013 Q2

Wearables beginning to take off… Wearable Device Market Size Forecast $14,000

$12,000

(Millions)

$10,000

$8,000

$6,000

$4,000

$2,000

$2010

2011

2012

2013

2014

2015

Source: BI Intelligence es mates, ABI Research, IMS, Juniper, *Assumes 42$ average selling price for wearable devices

2016

2017

2018

Mobile is the only media time that is growing U.S.$Consumer$Media$Consump2on$Share$ 50%$ 45%$

45%$ 44%$ 43%$ 42%$

40%$

38%$

35%$ 30%$ 26%$26%$26%$ 25%$

25%$

20%$

20%$

20%$

17%$ 16%$ 15%$ 14%$

15%$

12%$

10%$

12%$ 9%$

8%$

7%$

7%$

6%$ 4%$

5%$

8%$

9%$ 7%$ 5%$ 5%$

6%$ 4%$

0%$ TV$

Online$

Radio$ 2009$

Source:(eMarketer,(August(2013(

2010$

Print$ 2011$

2012$

Other$ 2013$

Mobile$

Each device has a different “prime time” Share Of Device Page Traffic Over A Day:

Source: comScore, Telefonica, Macquarie Capital (USA), December 2011

Smartphone sales have overtaken “dumb phones” Global Mobile Phone Sales 400,000 Feature Phones

350,000

300,000

(Thousands)

250,000

200,000

150,000 Smartphones 100,000

50,000

1Q08 Source: Gartner

4Q08

3Q09

2Q10

1Q11

4Q11

3Q12

2Q13

~225 million tablets were shipped in 2013 Global Tablet Shipments By Pla orm

100,000,000 90,000,000 80,000,000 70,000,000 60,000,000

Amazon (Kindle Fire)

Windows

50,000,000 40,000,000

Apple

30,000,000 20,000,000 Android

10,000,000 Q2 2010

Q3 2010

Source: BI Intelligence Es mates

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

But growth is slowing rapidly Year-Over-Year Growth Smartphones vs. Tablets, Quarterly 350%

300% Tablets 250%

200%

150%

Smartphones

100%

50%

0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 Source: BI Intelligence Es mates

~60% of tablets run Android Global Tablet Market Share By Pla orm 100%

BlackBerry

Windows

Nook

Amazon (Kindle Fire)

90% 80% 70% 60% 50%

Apple

40% 30% 20%

Android

10% 0% Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Source: BI Intelligence Es mates

~80% of smartphones run Android Global Smartphone Market Share By Pla orm 100% 90% 80%

Other

Share of Global Unit Sales

70% 60% 50% 40% 30%

BlackBerry Apple iOS Microso

Android

20% 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 Source: IDC, Strategy Analy cs

~60% of all new computing devices run Android Global Compu ng Pla orm Market Share 100% 90% 80% 70%

Other

BlackBerry Apple

60% 50%

Windows

40% 30% 20%

Android

10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 Source: Gartner, IDC, Stategy Analy cs, Company Filings, BI Intelligence Es mates

Biggest opportunities now China and India Smartphone Sales In 2014 Will Be Driven By New Users In Emerging Markets 300

Millions Of Smartphones

250

200

150

100 Top 11 Markets

Other Markets

50

Sales To New Smartphone Users In 2014 Source: Mediacells via The Guardian

Smartphone Upgrades In 2014

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‘Local 7 manufacturers’ in India and China have beaten Apple in Smartphones, closing in on Samsung 90,000,000

Smartphone Shipments

80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Q1 2011

Q2 2011

Q3 2011

Q4 2011

Samsung

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Local 7 Manufacturers*

Sources: Various, BI Intelligence. *Local 7 are: Huawei, ZTE, Lenovo, Coolpad, Xiaomi, Karbonn And Micromax

Q1 2013 Apple

Q2 2013

Q3 2013

Q4 2013

Selected Local Manufacturers from India and China 70,000,000

60,000,000

Shipments

50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Q1 2011

Q2 2011

Xiaomi

Q3 2011

Lenovo

Q4 2011

Q1 2012

Huawei

Sources: Canalys, IDC, Strategy Anaytics BI Intelligence, Company Reports

Q2 2012

ZTE

Q3 2012

Q4 2012

Coolpad

Q1 2013

Q2 2013

Karbonn

Q3 2013

Q4 2013

Micromax

Android now as popular with global developers as iOS Mobile Developers' Main Pla orm Other 7% BlackBerry 4% Android 34%

Windows Phone 5%

HTML5 17%

Source: Developer Economics, July 2013

iOS 33%

iOS vs Android Fragmentation in 2013

Android is more fragmented, but has far more reach worldwide then iOS Source: OpenSignal, “Android Fragmentation Visualized”

Android is leading in World-Wide Smartphone Sales by a HUGE margin

Source: Wikipedia, http://bit.ly/MobileOSShare

Mobile handset with open source operating systems* HW/Organization

Model

SW/OS

Release date

Current State

Nokia

N900

Maemo 5

2009

Discontinued

Nokia

N9

MeeGo 1.2 Harmattan

2011

Discontinued

OpenMoko

Neo (1973 & FreeRunner)

Openmoko Linux

2007/2008

Discontinued

Golden Delicious

GTA04

QTMoko

2012

Waiting for interest

Aava Mobile

Dev Phone

MeeGo

2011

Discontinued

Tizen Association

Dev Phone

Tizen

2013

Available

Jolla

Jolla

SailFish

2013

Available

ZTE

Open

Firefox OS

2013

Available

Alcatel

One Touch Fire

Firefox OS

2013

Available

Source: Wikipedia, http://bit.ly/OSMobilePhones *Does not include Android Phones / WebOS phones

Thank you

Appendix

Android “fragmentation” improving

Reprinted With Permission From OpenSignal, “Android Fragmentation Visualized”

Android Fragmentation 2013

Source: OpenSignal, “Android Fragmentation Visualized”

Wearables! What Is The Next Big Thing In Mobile? Wearables

22%

Connected Car

7%

Mobile Wallet

17%

Mobile Health

7%

Mobile Adver sing

7%

Distance Learning

4%

Indoor Loca on

2%

Everything As A Service

19%

Connected TV

9%

Other

6% 0%

5%

10%

15%

Source: Open Mobile Media, July 2013; n = 50+ Top-Level Mobile Execu ves A ending The Open Mobile Summit

20%

25%