The State of Mobile: Key Emerging Digital Trends

1. The State of Mobile: Key Emerging Digital Trends Evan Neufeld VP + Sr. Analyst M:Metrics, the mobile market authority

2. Granular data on the most active segment of mobile media consumers. Comprehensive intelligence that helps companies profit from mobile convergence. Insight on key trends and topics from thought-leading analysts. • Device, content, and market tracking • Direct measurement of operator channels • Large scale surveys of consumer behavior • Syndicated reports, online interface, and custom queries • Monthly data • Client-only Web briefings • Quarterly key performance indicator reports • Eight topical reports • Monthly Delta reports • Client-only Web briefings • Direct measurement via on-device meter • Tracking Symbian, Windows, Palm devices • Browsing and messaging • Monthly data • Client-only Web briefings M:Metrics: The Mobile Market Authority

3. #1: Still Only 24 Hours in a Day: Fighting for Consumer Mindshare in an Increasingly Fragmented Environment • Media Consumption Evolution • Death of mass marketing • Need to understand multi-modal consumption • 360 campaigns to become more the rule than the exception • Decreased Impact of Advertising • Over-messaging endemic • Need to rise above the clutter via improved messaging and targeting • The Era of Consumer Control • More savvy consumers demand fair exchange for value

4. #2: 213mm & Counting: Mobile Penetration to Grow 43% by 2011 + 43% WW Source: Nikkei Electronics Asia -- March 2007

5. #3: Mobile Phones: A Uniquely Personal & Portable Connection to the Digital World Networks Content Advertising Devices As convergence disrupts multiple sectors, the mobile phone emerges as the key personal connection to the digital world.

6. Driven by device evolution, speed, and developing business models, the mobile phone is moving from being just a portable phone ….. …. to becoming a mobile communication and media management platform

7. # 4: Moving from Mobile 1.0 to Mobile 2.0: Key Characteristics • Ubiquitous • Indoor plumbing penetration levels of phones • Consumers are incorporating the Mobile Web into the fabric of their daily life. In the US: • Passed 24+ million consumers using mobile browsers in Q4 ‘06 • Those who engage are active, frequent users • 56% turn to mobile daily and weekly for news and information • Devices getting more sophisticated • Business model proliferation & experimentation

8. Popular Mobile Content Mirrors Popular Web Content – Immediate, Necessary & On-the-Go • Weather information is the top destination on mobile browsers in the US: 44% of those who use their mobile browser in the US (4.8% of all mobile users) access weather info sites. • However, it leads by a slim margin. Top U.S. browsing genres: Category Users % of browser users Weather 10,272,251 44% Search 10,108,453 43% News 9,919,201 42% Sports Info 8,861,845 38% Ent. News 7,718,528 33% Monthly users: accessed weather info (3-month average ending June-07) 3 month avg ending JUL 2007

9. However, Consumption Is Showing Signs of Evolving .. Q1-07 to Q2-07 changes • Increase: • SMS, photo and video messaging, email • News & info via applications • Ringbacks • Sideloaded music • Steady, or Slight Decline: • IM • News & info via browser, text alerts • Ringtones, graphics • Carrier music downloads, programmed video • Played games, downloaded games

10. Paradigm Shift Anyone? Category Reach & Growth • Mobile 2.0 Activities Pick Up • News 2.0: Downloading of News & Info Applications grows … • Viral: 1 in 10 mobile subscribers creating/sharing content today. • UGC on The Rise: Some of the highest growing consumption categories involve user-generated photo and video sharing via MMS, email, or uploading to sites. • Old Business Models Disrupted: Homemade personalization (ringtones, graphics) is taking the place of purchased personalization – with the exception of ringbacks. • PC Integration: Tracking to the proliferation of music-enabled handsets, listening to one’s own music collection (transferred from a computer) is experiencing much faster uptake than downloading from a carrier music store. • Mobile Video: Nascent but Growing: From 2.6% In Jan ‘07 - 3.9% on Sept 07; Current usage: • Any Type of Video: 8.2 million Users as of Sept ‘07 • Viral: 7.1 million watched videos sent by family or friends • Key Content Categories: News, Sports, Weather • Utility & Communication Categories Growth Driven by New Devices: Multimedia functionality drives adoption and next generation services • 50% + own camera Phones • 1 in 5 Own Music Phones • Music phones were the fastest-growing handset category, increasing a whopping 239% Year Over Year Growth Q2 06 - Q2 07

11. Pricing: iPhone vs. Blackberry Bandwidth: Consumers want to drink from the hose Devices: Better devices = more usage Subsidization The ad card… # 5: What is Holding Us Back in Driving Us Forward …

12. Pricing: Consumers Getting Nickel and Dimed to Death… +10% +15%

13. The Broadband Effect: 19% 3G Penetration (and Climbing)But we already knew that mobile broadband Is a game-changer 3 month avg ending JUL 2007

14. Usage :Smartphones Provide 400-800% Lift

15. How Do We Get There? Five Key Requirement for Effective Mobile Advertising • It must lend self to targeting • It must accommodate a wide range of marketing activities and pricing / inventory models • It must allow for optimization & management of campaigns • It must provide clear , concise and actionable reporting • Must provide value back to consumers

16. Thanks

17. The (nearly) Ubiquitous Device: Global, with Significant Variance by Market Place. Select consumer penetration measures, US & EU% 3 month avg ending AUG 2007