This document summarizes a presentation about evolving mobile phone technology and consumer needs. It discusses: 1) Different demographic groups that use mobile phones and their needs. 2) Competition in the smartphone market and popular models. 3) Expanding capabilities of smartphones like 4G connectivity, location awareness, and new development opportunities through HTML5. It concludes that understanding target customers, the role of carriers, and improving smartphone capabilities will be key to success in this evolving market.

1. AUTOMOTIVE
BEAUTY
COMMERCIAL TECHNOLOGY
CONSUMER TECHNOLOGY
ENTERTAINMENT
FASHION
FOOD & BEVERAGE
FOODSERVICE
HOME
OFFICE SUPPLIES
SOFTWARE
SPORTS
TELECOM Evolving Handsets, Evolving Needs
TOYS
Targeting Consumers Now and Tomorrow
Ross Rubin
Executive Director of Industry Analysis
Consumer Technology
The NPD Group
September 2010

2. About The NPD Group
 Founded in 1967
 Cover a wide range of industries, including telecom,
electronics, software, office supplies, toys, videogames,
apparel, beauty, home, and auto products
 Two main sources of data for sellthrough information
 Point-of-Sale: Item-level data from case register panel
of retailers, including Best Buy, Radio Shack, Target,
Sears, BJs, Amazon.com, Apple, etc.
 Consumer: Brand-level purchase data (and related
info) from online surveys sent to hundreds of
thousands of consumers
Proprietary and Confidential

3. Topics
 Consumers
 Competition
 Capabilities
Proprietary and Confidential

4. Consumers
Proprietary and Confidential

5. Carrier demographics vary significantly
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

6. Smartphones have become affordable, but data is still expensive
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

7. Not all smartphones have the same demographic appeal
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

8. Competition
Proprietary and Confidential

9. Nexus One innovative but unsuccessful: Cancelled in five months
 Created by HTC
 1 GHz processor
 3.7’ AMOLED display
 800 X 480 resolution
 Android 2.1
 5 MP camera
Proprietary and Confidential

10. Abracadabra. Droid Incredible #2 Android smartphone in Q210
 Created by HTC
 1 GHz processor
 3.7’ AMOLED display
 800 X 480 resolution
 Android 2.1
 8 MP camera
Proprietary and Confidential

11. Carriers still dominate handset distribution
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

12. Capabilities
Proprietary and Confidential

13. Handsets have become capable 4G-ready media platforms
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

14. Advent of HTML 5 opening up new development opportunities
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

15. The future phone
Ultimately, the handset will be
as useful for avoiding
communication as it is for
facilitating it.
Proprietary and Confidential

16. To become useful assistants, handsets will need to know
 About us
 About the environment
Proprietary and Confidential

17. Smartphones are driving the horsepower
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

18. From siloed repositories to anticipatory assistants
Newton Palm Telenav
Intelligence Synergy OnMyWay
1993 2009 2010
Proprietary and Confidential

19. Handsets are increasingly context-aware
 GPS/Hotspot databases
 Accelerometers
 Gyroscopes
 Proximity Sensors
 Light Sensors
 Compasses
 Cameras
Proprietary and Confidential

20. Location-aware handsets provide context
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

21. Location-aware handsets provide context
Source: The NPD Group / Consuner Data Tracker / Mobile Phone Track
Proprietary and Confidential

22. Focus on the WAN, but much intelligence comes from LAN, PAN
4G
Wi-Fi
Bluetooth
Zigbee
zzzzzd
Proprietary and Confidential

23. NFC brings convenience to commerce, check-in, but at a price
Existing New
Infrastructure Infrastructure
Mag stripe
Readers NFC
(Square)
POS/
Realtime Cameras
Barcodes
Check
Imaging
Augmented
Reality
Send Money
Remote Apps
(PayPal,
oboPay)
Proprietary and Confidential

24. Summary
 Understand whom you are targeting and what they own
 Carriers play an important role
 Dictate the portfolio
 Control large subscriber bases
 Advertise and promote
 Smartphones are growing and capabilities are improving
 Faster cellular access
 More robust contextual awareness, local networks
 How do we integrate to move beyond the PC?
Proprietary and Confidential

25. Thanks and Q&A.
Web: npdgroupblog.com
Twitter: @rossrubin
Proprietary and Confidential