The document provides an overview of key mobile trends, with a focus on trends in Hong Kong. It summarizes that: - Hong Kong youth have the highest mobile phone ownership rates in Asia, and over 30% of Hong Kong mobile users engage in social networking on their devices. - When purchasing a new mobile phone in Hong Kong, content/applications is the second most important factor after look/feel. - Popular social networking sites accessed on mobile devices in Hong Kong include Facebook, Yahoo, and Google.

1. TABLE OF CONTENTS

2. MOBILE TRENDS 23% 27% Mobile Internet Mobile Social Media Mobile Applications Mobile Advertising Mobile Video Mobile Payments

3. KEY SUMMARY 48% ***Data and statistics may vary slightly from each other in report depending on sources used for topic. This is to give you an overview only. The number of people who access social networks via mobile devices is approximately 370 million worldwide- 10% of total mobile subscribers. By 2012, this figure will be more than double. The mobile applications market (gaming, music, entertainment, utilities) is growing at an incredibly fast rate . Android is quickly catching up to Apple in terms of applications added per month. Mobile advertising is expected to grow almost 10% in the next 6 years and will soon be one of the most important communications channels . Mobile payments are becoming increasingly popular now with multiple industries looking into integrating it into their business payment systems for consumers.

4. 1. MOBILE INTERNET More than half a billion people accessed the mobile internet worldwide in 2009. Usage will double within next 5 years as mobile overtakes the PC as most popular way to connect to the Web. 3G is key to success of Mobile Internet and will have a 44% global penetration rate by 2013 (Japan, Western Europe, USA already > 30%) Source: Morgan Stanley, MobiThinking By 2012, Smartphones are expected to out-ship the global PC market (notebook+netbook+desktop)

5. For the first time, there will be over 1 billion mobile devices accessing the Internet by end of 2010, gaining quickly on the 1.3 billion PCs accessing the Internet (the former growing 2.5x rate of latter) Mobile Subscribers vs. Mobile Internet Users Worldwide Source: Mobile Social Networks, Trendsspotting 1. MOBILE INTERNET

6. Source: Morgan Stanley There are more mobile internet users in China than any other country in the world. Source: Morgan Stanley, MobiThinking Source: Mobile Trends 2020 1. MOBILE INTERNET UBUITIY OF MOBILE IN FUTURE In developed nations, mobile data will become the norm for all users For emerging nations, everyone will be online with their mobile phones before they go on PCs.

7. Source: Morgan Stanley Although China has a low 3G penetration rate, there will be more mobile internet users in China than any other country in the world By end-2009, more than half of total internet users in China will be accessed by mobile devices There are more mobile internet users in China than any other country in the world. Source: Morgan Stanley, MobiThinking 1. MOBILE INTERNET

8. 23% 27% Around 60% of the time spent on the mobile internet is spent on social networking sites and apps in the US. * Week ending April 4 2010, n=3.05 million US mobile subscribers Social Networking ranks as fastest-growing mobile content category Source: ABI Research, Ground Truth 2. MOBILE SOCIAL

9. 23% 27% Global Phenomenon: with Facebook as clear leader, but also other regional strongholds Global Social Networking Web Sites* 830MM Unique Users,+20% Y/Y, 188MM Total Minutes,+25% Y/Y,10/09 Facebook 430MM users +137% Y/Y MySpace 110MM users -14% since 10/08 Twitter 58MM users +1238% Y/Y Hi5 47MM users -18% Y/Y Orkut 54MM users +20% Y/Y Skyrock 21MM users +10% Y/Y Vkontakte 23MM users +22% Y/Y Baidu Space 63MM users +33% Y/Y Kaixin001 25MM users +325% Y/Y Friendster 18MM users - 47% Y/Y QQ (Alumni+Mini) - Tencent 68MM users +138% Y/Y CyWorld 21MM users +4% Y/Y Mixi 14MM users +4% Y/Y Source: Morgan Stanley * Members on Social Networking sites 2. MOBILE SOCIAL

10. SOCIAL MEDIA is a natural sweet spot for mobile since users connect with their circle of friends using phone, SMS, email by social networking sites via mobile browser. Millions Mobile Social Network Users Worldwide 800 million mobile social network users by 2012 Source: Mobile Social Networks 2. MOBILE SOCIAL

11. Social network on mobile device……. Unified Communications + Multimedia Creation/Repository with you anywhere, anytime! 65 million users actively using Facebook Mobile Application Source: Facebook Mobile: 100 Million and Growing, how-to-travel-the-world.com 2. MOBILE SOCIAL VOIP Calls Play games Share music/videos/photos/stories Status Updates Chat Messages Wall posts

12. Mobile Location-Based Services (MLBS) Source: Juniper Location will become the core technology to mobile devices. It will become more ubiquitous on the device than any other feature, nearly every user interaction with mobile devices will become location. Location based advertising will explode. Most application and mobile web will be location aware, and most mobile advertising will be informed and targeted by action. 2. MOBILE SOCIAL

13. Mobile Location-Based Services (MLBS) Advertising will likely form an increasing a share of MLBS-related revenues over the next five years Revenues will come from sales of apps through application stores and other channels, but also from mobile advertising tied to those apps Greatest revenues will be coming from a Western Europe, but usage highest in East China Source: Juniper 2. THEY ARE ENGAGING WITH….MOBILE SOCIAL

14. 23% 27% iPad’s Flipbook: New category of media consumption Source: Juniper Flipboard is a social magazine that brings to life the stories, photos, news, and updates shared across multiple social media platforms such as Facebook and Twitter Users can personalize the content on Flipboard, create their own sections around particular topics, and quickly flip through the latest material posted by Friends on social networks by using the iPad touchscreen “ With over one billion messages posted everyday, social networks are quickly becoming the primary way people discover and share content on the Web” - Flipboard co-founder McCue Source: The New Zealand Herald 2. MOBILE SOCIAL

15. 23% 27% Source: Juniper Augmented Reality: placing digital content literally in physical context 2. Indoor Smartness: indoor position, smart environments 3. Vendor Relationship Management: customers in control, people sent out RFQ’s, includes barcode scanning, couponing etc. 4. Contextual Information Provision: provision of information based on LIVE information gathered through sensory input from all elements in your context Personal Area Networks: many hardware mutants and spinoffs Source: Mobile Trends 2020, The Augmented Reality Industry in 15 mins. AUGUMENTED REALITY (AR): Created for the 4 th Screen 2. MOBILE SOCIAL

16. 23% 27% Source: Mobile Trends 2020 Growing use of Augmented Reality..… As well as major marketing/advertising channels….. “ Augmented and virtual reality will become an increasingly standard new method for search, discovery, gaming, eyesight, healthcare, retail, entertainment and most other experiences in life. Location and other contextual functions will grow so our 2D mobile experiences become 3D and ‘real”. To such an extent that the prefixes ‘augmented’ and virtual will eventually become redundant.”- Jonathan Macdonald, Founder JME 2. MOBILE SOCIAL

17. 3. MOBILE APPLICATIONS The most popular categories for mobile applications according to the top mobile app stores are Games, Entertainment, Utilities, Personalization, and Music For Apple and Blackberry- top mobile application categories are Games Source: Distimo 58% Games 18% Entertainment 40% Personalization 15% Music 29% Games 18% Utilities MOST POPULAR CATEGORIES FOR MOBILE APPS

18. 23% 27% Apple is still leading in terms of number of new applications per month However, Android is growing rapidly fast adding 15% new applications over the last month Source: Distimo 3. MOBILE APPLICATIONS Android is growing rapidly fast!

19. 23% 27% Source: Vision Mobile 2010 Though iPhone and Android have the lowest number of device installed base, they account for the most number of total applications available (and with over 3 billion downloads from Apple already!) Since 2008, the number of applications for the younger iPhone and Android platforms drastically increased compared to Symbian and JAVA ME platforms 3. MOBILE APPLICATIONS

20. 23% 27% Nokia has the most paid applications at 85%, followed by Windows, Blackberry and Apple Android has the largest share of free applications at 57% followed by Palm Source: Distimo 3. MOBILE APPLICATIONS

21. 23% 27% 2010 may be the year when advertisers start seeing mobile less as an experiment and more as a serious part of their overall marketing campaign Source: 2010 Mobile Influencers 4. MOBILE ADVERTISING

22. 23% 27% 2010 may be the year when advertisers start seeing mobile less as an experiment and more as a serious part of their overall marketing campaign * Mobile Advertising is defined by placing an advert within a variety of mobile media formats including mobile Internet, games/applications, mobile video, mobile TV, streaming music, text and media alerts. It is estimated that global expenditure on mobile advertising will grow 9.5% in the next 6 years- from 3.6 billion in 2009 to 38 billion in 2015 Source: Strategy Analtyics, Trendspotting, Internet Advertising Bureau Billions 9.5% Millions of consumers are already using their mobile to search for information on products and services and search volumes are growing faster than online 4. MOBILE ADVERTISING

23. 23% 27% Source: Internet Advertising Bureau Mobile ads mature beyond banner ads and SMS spams, become more ‘engaging’, will not replace older media like TV, print, and internet, as each will adjust to the newest medium. 4. MOBILE ADVERTISING Brands will be able to measure ROI and use analytics to better deliver mobile campaigns and understand their consumers Mobile provides the ability to target by site, phone model, demographics and location, all of which can be useful to advertisers. Mobile phones allow the consumers to react immediately with advertising. After seeing advert, they can text, call or download content instantly. It helps maximize effectiveness of other media i.e.. a short code is great example of this.

24. 23% 27% Source: Internet Advertising Bureau 5. MOBILE VIDEO Major trends driving interest and growth in mobile video: Increasing availability and screen size of advanced handsets improve viewing experience of hi-res video Growing deployment of high-speed 3.0-3.5G networks supports video services high-bandwidth requirements Expanding offering of video content services provides more rich-media possibilities to more mobile users 4) Need for mobility- users want access to video content “on the go” Source: Mobile Video Services

25. 23% 27% An increasing number of mobile subscribers will access video content through their mobile internet By 2010, some subscribers may begin to access local TV content on their phones Source: Ernest & Young 5. MOBILE VIDEO

26. 23% 27% An increasing number of mobile subscribers will access video content through their mobile internet By end-2009, some subscribers may begin to access local TV content on their phones 5. MOBILE VIDEO There are many sites that offer mobile video content downloads for free. Most popular downloads are, music videos, short clips, commercials, and sports clips.

27. 23% 27% An increasing number of mobile subscribers will access video content through their mobile internet By end-2009, some subscribers may begin to access local TV content on their phones Source: Internet Advertising Bureau 5. MOBILE VIDEO Skype is already exploring the mobile video space with Skype Mobile Video for the Nokia N900, which enables Skype video calls to other N900 devices or to PCs. It is predicted that video call volume will grow from 600 million calls in 2008 to almost 30 billion calls by 2015. Source: Telecom Asia

28. Number of people using mobile to make payments worldwide: (in-app payments, mobile ticketing, mobile coupons etc.) 2009: 82 million 2014: 490 million- 8% of mobile subscribers Number of mobile financial users (mobile banking, money transfers), especially in emerging countries in Asia: 2010: 110 million 2015: 900 million Volume of mobile payments (how much people spend) 2010: 170 billion US 2014: 600 billion US- 27% increase 6. MOBILE PAYMENTS Source: mobiThinking

29. Strongest growth are in emerging markets like Asia , Eastern Europe, the Middle East and Africa for mobile payment Substantial base of people on a low income spread across vast distances who own mobile phones require banking services uses mobile payments Almost half of global mobile subscribers in developed and emerging nations will pay by mobile for physical and digital goods and services by 2014 6. MOBILE PAYMENTS Source: Mobile Marketing Watch, Telecom Asia, Mobile Trends 2020

30. 6. MOBILE PAYMENTS Other sectors that are starting to explore opportunities in mobile payments other than banks (m-banking): Transportation companies are offering ‘touch and pay’ access to ticket barriers where a stored-value card is either attached to the handset, or embedded in the SIM Retailers are offering loyalty cards, using similar means of payment, as they seek to reduce the amount of cash they have to handle and carry Source: KPMG Mobile Payments in Asia

31. 6. MOBILE PAYMENTS Other sectors that are starting to explore opportunities in mobile payments other than banks (m-banking): - Credit card companies see mobile handsets as a means to widen their catchments of commercial transactions - Advertisers are building web-links into posters in train and buses and on buildings which can be activated by 3G+ phones from a short distance leading to more website visits and more purchases by mobile phone Content providers, including music and information sites, auction sites and rapidly growing Web 2.0 community sites such as YouTube become globally accessible to paying customers Source: KPMG Mobile Payments in Asia

32. HONG KONG MARKET

33. KEY SUMMARY 48% Hong Kong youngsters owns the most mobile phones across Asia. One-third of them would like to receive more ads on the mobile even with no incentives involved. Content and applications is the second most important factor when purchasing a new mobile phone in HK (next to look and feel of device). More than 30% of Hong Kong mobile users engage in social networking on their mobile devices; Facebook, Yahoo, and Google are the most top visited sites.

34. HONG KONG- MOBILE ADVERTISING 23% 27% Hong Kong youngsters have the highest mobile phone ownership at 87%, followed by Singapore and Korea by 85%, and regional average at 65% 24% indicated they would like to receive more ads on their mobile even with no incentives involved, showing their willingness to receive more information through this medium. Source: Synovate

35. HONG KONG- MOBILE USAGE Not all Smartphones are 3G enabled. Smartphones are the latest generation of mobile phones that have more functions than simple calls/SMS (i.e. run multiple applications, GPS etc). 3G is a network standard for mobile phones which allows people to access data on their phones at high speeds. Source: TNS Global, ComputerWorld Smartphone will continue to be the most vital computing/communication device people carry in 2010 Almost half of all mobile phone owners have a Smartphone in Hong Kong at 48% in 2010 More than double global rate 23% 27% 48% Up from 40% in 2009

36. HONG KONG- FACTORS IN PURCHASING MOBILE PHONE 27% Content and Applications is the next most important factor when purchasing a new mobile phone in HK vs. global at 14% “ Today’s consumers can access a wider range of mobile services than ever before through Smartphones, so in choosing a mobile device consumers care more and more about which content and applications they will be able to access. Companies MUST consider the new dynamic in their go-to-market strategies and leverage the equity generated by these new mobile brands to drive sales” - TNS Percentage Source: TNS Global

37. HONG KONG- MOBILE SOCIAL 27% Mobile Social Networking Top visited sites Social networking services high in demand with Hong Kong users….. Hong Kong: 30% of all mobile users Global: 12% of all mobile users “ Youth in Asia are looking to receive the latest information to wow their peers, so reaching them through mobile is the most immediate way to gain their attention.“ - Synovate Source: Synovate Hong Kong Global Facebook- 17% Google – 13% Yahoo- 14% Microsoft Windows- 11% Google- 14% Yahoo- 11%