Directions in Mobile DevicesDirections in Mobile DevicesDirections in Mobile DevicesDirections in Mobile Devices

TeleSoft's 2005 Annual Venture Capital EcoSystem Meeting

04/18/23 2

Makimoto Makes Sony’s Prediction

1980 1990 2000 2010

First Digital Wave

<PC> Second Dig

ital W

ave

<Digita

l Consum

er, Netw

ork>

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Evolution Of Information Infrastructureand the Evolution Of Processors

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Evolution of Connected Computing

1980 1990 2000

To

tal

Th

rou

gh

pu

tT

ota

l T

hro

ug

hp

ut

DiscreteDiscreteComputingComputing

DiscreteDiscreteComputingComputing

LocallyLocallyConnectedConnectedComputingComputing

LocallyLocallyConnectedConnectedComputingComputing

Escalating ConnectionIntensity & Frequency

WAN-LANWAN-LANConnectedConnectedComputingComputing

WAN-LANWAN-LANConnectedConnectedComputingComputing

WAN-LANWAN-LANIntenselyIntensely

ConnectedConnectedSecureSecure

DistributedDistributedComputingComputing

WAN-LANWAN-LANIntenselyIntensely

ConnectedConnectedSecureSecure

DistributedDistributedComputingComputing

04/18/23 5

Connected Digital Consumer

Copyright© 2004. MIPS Technologies, Inc. All rights reserved.

StudyMaster Bedroom

Kids Bedroom

TV Gateway

Family Room

Kitchen

Home

Minivans and SUV

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Evolution of ProcessorAre Transistors and Frequency Enough?

1980 1990 2000 2010

Transistors

100,000,000

10,000,000

1,000,000

100,000

1,000,000,000

286

386

486

Pentium

Pentium IV

Itanium 2

Moore’s Law ContinuingMoore’s Law Continuing--

But What is the Benefit?But What is the Benefit?

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Processors Start Weakening in PerformanceHuge Memory Bottleneck Stalls Throughput

1980 1990 2000 2010

CPU SpeedCPU Speed

100,000

10,000

1,000

100

10

1

Hennessy and Patterson, “Computer Architecture, A Quantitative Approach”

Memory SpeedMemory Speed

Performance

Growing GapGrowing GapIn Processor / Memory and I/OIn Processor / Memory and I/O

CPU Spends Most TimeCPU Spends Most TimeWaiting on MemoryWaiting on Memory

CPU and other Chips are Power-hogsCPU and other Chips are Power-hogs

Th

rou

gh

pu

t Gap

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X86 Processor Business BreakdownMarket Growth in Mobile & Servers

$13,985 $14,640

$6,122$7,403

$4,338

$5,659

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2004 2005e

Server

Mobile

Desktop

Growth

5%

21%

30%

Source: JMP Securities

Overall: 13%

% Desktop 57% 53%

$ M

illi

on

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Market Needs and Challenges for Notebook PCs

• Notebook PCs remain the domain of Nomadic Usage Model• Low Price – enabling market penetration in Emerging Markets• Small Form Factor – smallest size for convenient typing• Light-weight• Long Battery-life• Nomadic e-commerce platform of choice• Nomadic Entertainment platform of choice

• Small Form Factor Notebook PCs are not Low Priced• Low-Priced Notebook PCs are bulky, heavy and have low Battery-life

• Pocket PC is just a marketing description for Hand-held Devices

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Economic Expansion Opportunities

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China’s and India’s Growing Middle Class

The Ansal Plaza shopping mall in New Delhi featuresa McDonalds and Nike, Reebok, Burberry's and Gucci brand products.

This advertising-filled Shanghai street exemplifies the growth from China's economic reforms.

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Asia-Pacific is Intrinsic Part of Chip Supply-chain

$-

$ 20 B

$ 40 B

$ 60 B

$ 80 B

$ 100 B

$ 120 B

$ 140 B

2001 2002 2003 2004 2005 2006 2007

Americas

Europe

Japan

Asia-Pacific

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Need For Addressing Lower Priced PCsEntry Models to Increase from 1/3 to over ½ of CPU TAM

$7,323

$17,667$10,467

$19,064$27,369

$18,138$8,441

$11,259

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

2004 2008e

Mobile $1.5K +

Desktop $800 +

Mobile < $1.5K

Desktop < $800

Growth

25%

16%

7%

-10%

Source: IDC, 2005

Overall: 7%

% Entry Model 33% 55%

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Laptops from Walmart, Dell and Sony• Walmart - Balance 15" Laptop, 1.5 GHz Intel Celeron M 340 Processor

– $696.00 – 15.0" XGA TFT LCD screen– Intel Celeron M 340 (1.5 GHz) – Microsoft Windows XP Home Edition – 256 MB RAM expandable to 1 GB – 40 GB hard drive – Combo Drive (DVD-ROM + CD-RW) – Intergrated 802.11g WLAN – LAN:10/100 Base-T LAN on Board

• Walmart - Balance 14.1" Laptop, 1.1 GHz AMD Athlon 4 Processor– $498 – 14.1" XGA TFT LCD screen– 40 GB hard drive– 128 MB RAM– DVD-ROM drive– Integrated 802.11b wireless networking– Microsoft Windows XP Home Edition

• Dell Inspiron 1200 Laptop, Intel® Celeron® M Processor 350 1.30 GHz– $549– Microsoft® Windows® XP Home Edition– 256MB Shared, 1 DIMM– 30GB Ultra ATA Hard Drive

• Sony VAIO® TX670P/W Notebook VGN-TX670P/W – $2599– Microsoft® Windows® XP Professional – 1GB Shared– 60GB Ultra ATA Hard Drive– True Small Form Factor Notebook

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From $500 PCs to $300 PCs

Total $415 100%CPU $68 16%Chipset $21 5%Other Semi $30 7%Memory $56 13%Monitor $50 12%Software $70 17%Storage $31 8%Components $50 12%Board/Enclosure $40 10% Source: IDC, RMI

Total $226 100%CPU + Chipset + I/O $50 22%Chipset $0 0%Other Semi $5 2%Memory $56 25%Monitor $40 18%Software $5 2%Storage $20 9%Components $25 11%Board/Enclosure $25 11%

• $300 Laptop PC or Desktop with Monitor is the Sweet Spot for China and India

• CPU has to be SoC with Chipset and I/O integrated

• Integrated CPU enables efficient “Platform Power Management”

• There is very little Room for Expensive Software

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Intel has been Mobile PC Driver2008 TAM Growth Rate Intel Share

Desktop PC $18B 1% 87%

Mobile PC $14B 13% 91%

Server $9B 15% 90%

Baseband Cell $9B 4% NMF

Video Game / Handheld $7B 22% NMF

DTV $7.5B 38% 0%

Integrated / Application Cell $3.5B 48% 10%

DVD / DVD-R $3.7B 9% 0%

WLAN $2.6B 21% 20%

Broadband (DSL + CM) $2.1B 2% NMF

Digital Camera $4.2B 3% 0%

STB $2.9B 7% 0%

Source: IDC, 2005; RMI

PCFocus

PCFocus

04/18/23 17

China Leans towards OSS

Open Source Software Alliance formed in China Alliance with IBM, HP, and others aims to promote open-source development and application in China By David Legard, IDG News ServiceAugust 11, 2004

A number of Chinese software companies have joined forces with overseas vendors such as IBM Corp., Hewlett-Packard Co., Intel Corp, and Novell Inc. to form the China Open Source Software Promotion Alliance, China's first open-source software organization, several Chinese media reported Wednesday.

China Economic Net said the alliance, which includes China's leading Linux vendor Red Flag Software Co. Ltd., marked a new stage in the promotion of open-source software in China and across northeast Asia.

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India Leans towards OSS

Open Source Applications given to Millions in India

by Ingrid Marson

May 26 2005

OpenOffice and Firefox included on freely distributed CDs. The Indian government is trying to encourage the use of computers across the country by distributing free CDs that contain localised versions of popular open source applications.

The government of India has started distributing CDs containing Tamil-language versions of various open source applications, including the Firefox browser, the OpenOffice.org productivity suite and the Columba email client.

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Evolution Of Mobile Devices

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Hand-held Device Vs. Converged Mobile DeviceIDC Definitions for Pocket Sized Devices

• Handheld Devices are pocket-sized, capable of synchronizing with desktop or laptop computers. Handheld devices are designed to access and manage data including office documents, multimedia, and games.

• Handheld Devices do not include telephony but may include wireless capabilities that enable Internet access and text communication. These devices feature evolved operating systems or applications environments such as the Palm OS, Windows Mobile Pocket PC, Linux, or other proprietary platforms with the ability to download, run applications, and store user data beyond their required PIM capabilities.

• Converged Mobile Devices combine the features of a mobile phone with the features of a handheld device. Positioned to solve the "multiple device question" and designed to replace the need to carry a mobile phone and a pen-based handheld or a mobile phone and a pager, for example, these devices must match wireless telephony capability to the following operating systems or application environments: Symbian, Linux, Microsoft Windows Mobile Pocket PC Phone Edition or Smartphone, or the Palm OS. IDC also includes WAN telephony-enabled Research In Motion BlackBerry devices in this category. These devices must include the ability to download data to local storage, run applications, and store user data in addition to PIM capabilities. Converged mobile devices must also offer the full extent of their application-processing capability to the user, regardless of network availability.

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Hand-held Device Vs. Converged Mobile Device

Rank Vendor 1Q 2005 Ships 1Q 2005 Mkt Share 1Q 2004 Ships 1Q 2004 Mkt Share1 PalmOne 619,253 32.6% 810,183 37.5%2 HP 496,755 26.2% 577,615 11.9%3 Dell 216,229 11.4% 157,399 9.8%4 Acer 124,034 6.5% 20,354 4.7%5 Medion 79,500 4.2% 14,000 5.7%

Other 361,098 19.0% 578,997 18.2%Total 1,896,869 100.0% 2,158,548 100.0%

Rank Vendor 1Q 2005 Ships 1Q 2005 Mkt Share 1Q 2004 Ships 1Q 2004 Mkt Share1 Nokia 5,400,000 64.5% 1,771,508 49.6%2 RIM 769,818 9.2% 425,600 11.9%3 Fujitsu 710,000 8.5% 350,000 9.8%4 PalmOne 386,705 4.6% 167,921 4.7%5 Sony Ericsson 207,129 2.5% 203,652 5.7%

Other 899,094 10.7% 650,964 18.2%Total 8,372,746 100.0% 3,569,645 100.0%

Hand-held Devices Shrinking

Converged Mobile Devices Growing

Source: IDC, May 11, 2005

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Converged Mobile Devices & Hi-End Handhelds Alternate Entry into High Growth

445

185

137

306

47 26920

130

0

100

200

300

400

500

600

700

800

900

1,000

2004 2008e

Converged Device

High End

Midrange

Entry-level

% High + Converged: 10% 45%

Growth

-20%

22%

60%

54%

Cel

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ho

ne

Sh

ipm

ents

(#

- M

illi

on

)

Source: IDC, 2005

Overall: 8%

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Converged Devices Favor Light Feature-Rich OS Market has not picked a Clear Winner

11

68

1

19

1

7

2

31

4

5

0

20

40

60

80

100

120

140

2004 2008e

Other

Linux

Palm O/S

Microsoft

Symbian

Co

nve

rge

d D

evi

ce

Sh

ipm

ents

(#

- M

)

% Linux 9% 24% Source: IDC, 2005

04/18/23 24

Asia/Pacific (excluding Japan) Growth in Handheld and Converged Mobile Devices

Source: IDC

(Thousands)

04/18/23 25

Converged Mobile Device Usage Model

• Convergence of True Mobile and Nomadic Usage Models

• For True Mobile Increased Content Quality – Visualization and Sound

• Increased Connection Intensity

• Increased Functionality for Nomadic Use – Enterprise CRM use

• Limited use as an e-Commerce Platform so far – considerable fear

• Increased Need for Security

• Apple has addressed the Entertainment Mobile Device brilliantly

• Converged Mobile Device is not a DVD or true Media player yet

• Lower Prices are Needed to respond to Emerging Market Demand