Mobile Internet Devices: Market overview

Seshu Madhavapeddy General Manager, Mobile Internet Device Business Unit Texas Instruments Jim McGregor Principal Analyst and Research Director In-Stat

1 Introduction

ƒ Welcome to the Mobile Internet Device (MID) webinar series featuring: ƒ MID Market Overview – 6/26/08 ƒ MID Architectures – 8/7/08 ƒ MID Business Models – September (TBD) ƒ MID Ecosystem – November (TBD) ƒ Today’s host: ƒ Tracy Wright, TI Media Relations ƒ 20-30 minute market overview followed by live Q&A ƒ Archive of webinar available at: ƒ http://events.variview.net/clients/ti/20080626/ ƒ www.instat.com Presenters

ƒ Seshu Madhavapeddy ƒ General Manager, Mobile Internet Device Business Unit, Texas Instruments ƒ Joined TI in 2008 ƒ Former president, CEO and founder of various technology start-up companies ƒ Guides TI’s MID business strategy, software and hardware platforms, strategic partnerships and customer relationships

ƒ Jim McGregor ƒ Principal Analyst and Research Director, In-Stat ƒ Joined In-Stat in 2004 ƒ 20+ years experience in the semiconductor and electronics industry ƒ Focused on emerging semiconductor and systems technology ƒ Background in systems and software engineering plus an MBA and experience in several business and management roles Presentation overview

ƒ What is a Mobile Internet Device?

ƒ What is the MID market potential?

ƒ Is the time right for MIDs?

ƒ What challenges lie ahead? What is a Mobile Internet Device (MID)?

Required Application-oriented capabilities: features: Office productivity Browser

Higher resolution Camera display Wireless broadband Camcorder

Navigation All-day battery + = Truly portable Cellular voice

Intuitive UI Gaming Portable media player MIDs must deliver “no compromise” Internet browsing

• Display full web page • All plug-ins and font types • Intuitive zoom in and out • Performance equaling PC w/ broadband Demand for mobile Internet is increasing WW Mobile Internet Applications

1600 3 distinct vendor categories: 1400 • Smartphone vendors 1200 • PC notebook vendors 1000 • CE handheld vendors UMDs 800 Mobile PCs 600 CE Devices

Units in Millions Handsets 3 distinct form factors of MIDs: 400 • Pocket MIDs 200 • Tablets 0 2007 2008 2009 2010 2011 2012 • Net-books Source: In-Stat, 6/08

Pocket MIDs Tablets Net-books Vendor share Smartphone 60% vendors PC notebook 25% vendors CE handheld 15% vendors

MID type share 70% 10% 20% Multiple form factors evolving into MIDs

Consumer Electronics Portable Entertainment Devices •iPod

•Portable Media Player

Portable Digital/Sat Ultra Mobile Radio Receiver Devices

•iTouch

Cellular •Personal Nav Device Devices •iPhone Multimedia phone • Tablet PC Smartphone Computing

Cellular •Feature phone Ultra-Mobile PC BlackBerry •Cellphone Netbook PC Why now? ƒ New usage models + ƒ The move to a mobile society ƒ Change in Internet information • The old Internet – unidirectional information • The new Internet – bi-directional rich data content ƒ Change in Internet usage • Communication + Computing + Entertainment • Gaming, social networking, video, etc. ƒ New Technologies + ƒ High-performance/low-power processors ƒ High-performance graphics (DX-10+) ƒ Advanced UI, browsers and applications using hosted applications & data ƒ Access to wireless broadband ƒ New business models =

Major market inflection points within 5 years MIDs drive changes in business models: content and service delivery is crucial

Devices Services Content & applications Music Video

WLAN/3G/ Smartphone WiMAX/LTE… Social networking Web 2.0 Ringtones Internet Internet

News & Navigation information Key industry challenges

ƒ Communications ƒ Support of multiple communication standards will be required

ƒ Battery technology ƒ No revolutionary battery solution in the near-term ƒ Silicon technology must compensate

ƒ Business models ƒ How do all participants make money working together?

ƒ No one size fits all! ƒ Moving from geographic requirements to personal requirements ƒ Plethora of solutions aimed at different applications and usage models Summary

• Demand for mobile Internet and consumer electronics functionality on the rise

• New usage models and technologies fueling rapid market growth

• Challenges to MID market include: • Communications • Battery life • Business models • No one size fits all

12 Contact Information

Seshu Madhavapeddy General Manager, Mobile Internet Device Business Unit Texas Instruments [email protected] www.ti.com/mid

Jim McGregor Principal Analyst & Research Director In-Stat [email protected] 408.609.4554