The document summarizes the findings of the 2011 State of Wireless Industry Survey, which received 158 responses. Key highlights include: - Respondents were optimistic about industry growth but less optimistic about their own businesses. Expansion plans have decreased. - Carriers remain the biggest competition. The pending AT&T acquisition of T-Mobile is seen as an increasing threat. - Optimism is driven by growth in diverse devices and increased data usage on new applications. - Over half of respondents expect their wireless businesses to grow in the next 5 years, with larger dealers and Verizon dealers being most optimistic.

1. State of the Wireless Industry
Panel
Moderator
Anne Weiler, iQmetrix
Panelists
Scott Aronstein, Connectivity Source
Seamus McAteer, ITG
Akbar Mohamed, Prime Communications
Eric Stachowski, iQmetrix

2. 7th Annual iQmetrix State of
Wireless Industry Survey
158 Respondents

4. State of Wireless Industry Highlights
! Optimistic about industry in general but less
optimistic about own business
! % that plan to expand by 50% or greater has decreased
! Big box & carrier consolidation are threats to
independent channel

5. State of Wireless Industry Highlights
! Carriers are still biggest competition
! Uncertainty about pending AT&T acquisition of
T-Mobile as increasing threat
! Optimism driven by growth of diverse devices
and increased data traffic because of new uses

6. Most optimistic
Industry Overall • 21-51 locations
• Verizon dealers
• Canadian dealers
Where do you see the Wireless Industry in 5 Years?
Most pessimistic
• 3-9 locations
70%
• 51+ locations
60% • Sprint dealers
50%
40%
30%
Industry will slow down
20%
Stay the same
10%
Industry will grow
0%
2008 2009 2010 2011
Slightly more optimistic than 2011, in every segment at least 50% respondents predict growth of industry

7. Industry Overall Expectation
of larger
increases in
saw
s s market the United
US wirele in States
t decline
8.2 percen 4 percent through 2014
.
20 09 and a 2 .
compared
advan ce in 2010 with 2010.
Beginning in 2011, growth in average
revenue per subscriber (ARPU) will
become the principal driver of wireless
spending for the first time.
Source: TIA’s 2011 ICT Market Review & Forecast

8. Industry: Carriers
! Do you think carrier consolidation will have a
positive or negative effect on the industry?
! Almost 40% predict positive outcome

9. Industry: Carriers
! 2/3 of Sprint respondents see negative impact
! “Less consumer choice”
! “More threat to my business”

10. Industry: Phones
% of Expected Smartphone Sales 2012
45%
40%
35% 2010
30%
2011
25%
20%
15%
10%
5%
0%
< 40% 40% - 60% 60% - 75% > 75% > 90%
Sprint, AT&T, and dealers >10 locations see biggest shift to Smartphones

11. Industry: Phones
! July 2011 smartphone audience reached 82.2 M, 35% of US
market (comScore)
! October 2012 before smartphone sales overtake feature
phone sales
! Google data shows 31% penetration (OurMobilePlanet)
! 70% are first time buyers
! Sales of smartphones expected to exceed PCs in 2012
(Morgan Stanley)
! Smartphone ownership expected to reach 43% of
population by 2012

12. Consumers
Industry: Innovation
Who do you see as the
source of innovation?
®

13. >80% of 21-50 locations
Your Business are planning to grow
More Verizon dealers
plan to grow than Sprint,
T-Mobile, or AT&T
Where do you see your wireless business in 5 years?
T-Mobile dealers expect to
45% say the same or go out of
business
40%
35%
It will have increased to more than
30% double its current size
25% It will have increased up to double its
current size
20% It will remain the same size
15%
It will be smaller
10%
5% I will have sold it or have gone out of
business
0%
2009 2010 2011

14. 10 and above location
Your Business: dealers expanded most in
2011
Expansion 2011 Canadian dealers most
stable
How have you expanded in the past year? 40% of T-Mobile
respondents downsized in
35% 2011, 35% of Other (US
Cellular, Cricket), 31% of
30% Sprint
25%
Downsize
20%
Stay the same
15%
Expanded by up to 10%
10%
Expanded by up to 25%
5% Expanded by up to 50%
0%
Expanded by more than 50%
2009 2010 2011

15. Your Business: Expansion 2012
What are your plans for expansion in the next year?
45%
40%
35%
Plans for downsizing
30%
No plans for expansion
25%
Expand by more than 50%
20%
Expand by up to 50%
15%
Expand by up to 25%
10% Expand by up to 10%
5%
0%
2006 2007 2008 2009 2010 2011

16. Verizon dealers see significantly
Your Business: lower challenge managing carrier
than rest of US & Canadian dealers
Challenges
1-2 locations face greater
economic uncertainty
21-50 locations have most difficult
time managing carrier relationships
What is the greatest challenge you face in the upcoming year?
10-20 locations see greater threat
from big box
35%
30%
25%
20%
15%
10% 2010
5% 2011
0%
Continued Carrier Relationship Increased Big Box Increased Product/
Economic Management Competition Service Complexity
Uncertainty

17. Your Business: Smaller businesses are
seeing a significantly
Competition greater level of
competition
What is the level of competition in your Verizon & AT&T, and “Big
3” Canadian dealers see
marketplace compared to last year? more competition than
2010
60%
50%
40%
30% Far more competitive
Slightly more competitive
20%
Same
10% Slightly less competitive
Far less competitive
0%
2006 2007 2008 2009 2010 2011

18. Your Business: Competition
Who do you feel is your biggest competitor?
Response 2005 2006 2007 2008 2009 2010 2011
Your Carrier 1 1 1 1 1 1 1
Other Carriers 2 3 2 2 3 3 4
Big Box Retailers 3 2 3 3 2 2 2
Other Independent Retailers 4 4 4 4 4 4 5
Online Competition - - - - - - 3

19. Your Business: Investments
71% of respondents
are planning to
improve the in-
store experience in
the following ways:
40% of respondents
are planning to
expand/improve
B2B offerings.

20. Your Business: Investments
Do you currently use or plan to use the following in your store?
60%
50%
Mobile Payment
40%
Digital Signage
30% Interactive Retail
Location-Based Advertising
20%
Tablets
POS on Mobile Devices
10%
0%
% Currently Use % Plan to Use % Interested % Do Not Plan to
Use

21. 2011 State of Wireless
Industry Survey
Thank-you to all respondents and
Twitter voters
Looking forward to your responses in 2012
• Respondents get survey results
• Additional questions include churn, value-added
services, commissioning, and more detail on the
topics reviewed today

22. iQmetrix.com | 1.866.iQmetrix
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