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    Information Appliance and Market
              Perspectives
   • What Are Information Appliances?
   • Information Appliance Market
         Dynamics
   • IA Revenue Streams & Business
         Models
   • Information Appliance Market
         Potential
   • 2010 IA Scenario and Summary
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        What is Information Appliance?

    • An inexpensive device
    • An easy to use device
    • Based on computer technology
    • Dedicated to do one or a few functions
    • An application-specific computer
    • Most devices will have Internet access
    and may be called Web Appliances


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         An Information Appliance
                 Segment

           Add-On IAs                      New IAs
    • Existing devices with IA   • New devices or form
    functions added:             factors with IA functions:
       • Web set-top boxes           • Web PDAs & PDAs
       • Web digital TVs             • Web terminals
       • Web cellular phones         • Web pads
       • Web screen phones           • Web music players
       • Personal                    • Electronic book readers
       VCRs/DVRs

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         Information Appliance Types

 Web/Internet IAs Products designed to access the Internet. Other
                  functions may also be included.
 Communications Products designed for communications plus web
 IAs              access or other IA functions
 Entertainment    Products designed for entertainment plus web
 IAs              access or other IA functions
 Computing IAs    Products designed for single/few PC functions.
 Other IAs         Products designed for new functions. IAs are
                   standalone or built into existing products


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        Information Appliance Examples

  IA Types             Information Appliance Examples

  Web/Internet         • Web Terminals              • Web Pads
                       • MSN Companions IAs         • AOL Companions
  Communications       • Web Cellular Phones        • Web Video Phones
                       • Web Screen Phones IAs      • Email Stations
  Entertainment DVRs   • Web Set-Top Boxes          • Web TVs
                       • Web Music Players IAs      • Personal DVRs
  Computing IAs        • PDAs & Web PDAs            • Handheld Computers
                       • Thin Clients               • Data Collection IAs
  Other IAs            • Electronic Book Readers    • Medical IAs
                       • Car IAs (Telematics)       • Vertical Market IAs


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        IA Product Overlaps




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        IA Driving Forces




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        IA Market Characteristics




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        IA Market Dynamics




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        IA Hindsight




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        IA Business Models




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        IA Revenue Flow




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        IA Revenue Flow Estimate




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        IA Revenue Flow Estimate




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        IA Revenue Stream Perspectives
  • IA service is the largest revenue generator: 50-80% of
          customers’ expenditure over products’ economic life
  • IA purchase is 15-30% of customers’ expenditure
  • IA aftermarket is 5-25% of customers’ expenditure
  • More future IA services will further boost its share
  • E- & m-commerce fees (3-10% of purchase price) will
          add 6-10% to total IA vendors’ revenue potential
  • IA industry fees are proportional to each segment’s
  revenue size and IA users, but are difficult to estimate




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        IA Business Model Perspectives
   • Recurring revenue model is preferred. Start-up companies must be
            early in a new segment or enter via large service companies
   • One-time revenue products should become customers’ repeat and
            replacement products
   • Two types of Internet access business models
   – In “Open Access” end-user controls Internet access pattern
   – In “Walled Garden” service provider controls Internet access pattern
   – Most IA customers prefer open access
   – ISPs prefer walled garden due to high referral fees
   – Walled garden is viable for small devices due to text entry problems

   • Influence products generate multi-year customer loyalty, which
            generate recurring revenue (i.e. walled garden products)
   • IA hardware device price discounting/bundling has subsided. May
   come back as customer spending pattern is better understood


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    IA Forecast Methodologies




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        IA Related Markets




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        Interactive Service Networks




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        IA Service Networks




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   Web IA: Between Rock & Hard Place
   • Web IA expectations have been unrealistic
       – First business models were unbelievable
       – Early products need better features
       – High-tech slowdown forced several product
       withdrawals
       – Cost/benefit versus PCs need improvements
   • Is there a need for web-only IAs?
     – Will web add-on IAs eliminate need for web-only IAs?
         – Will PC price decline prevent web-only IA success?
   • Web IAs still have opportunities
       – Web Pads will succeed due to mobility advantage
       – Low-priced flat displays will help tremendously


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        Total Unit Shipment




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   World Wide: New IAs vs. Add-on IAs




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    IA Market Growth Perspectives
  • Add-on IAs will have a much larger market than new,
  standalone IA         products
  • IA product category success will vary by region and
  country
  • Current PC Internet user penetration level will impact
  the success of many IA product segments
  • Web enabled devices in use will be higher than
  subscribers
  • Many products will have IA functionality, but user
  subscriptions will lag until the user experience improves
  • IA product features for existing web users are different
  from the needs of new web users
  • “Killer apps” will vary by product segment &
  region/country
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    U.S. Telematics Potential




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        2010 IA Scenario: USA




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        2010 IA Scenario: Worldwide




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        IA Summary Perspectives




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posted:9/2/2011
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