The document discusses the importance of user-facing, patent-protected differentiators for mobile device manufacturers to compete with Apple. It states that manufacturers need to innovate through acquiring or developing patented features that consumers see and value to drive purchase decisions and brand loyalty, rather than focusing only on internal specifications. Developing these differentiators and protecting them with patents prevents competitors from quickly copying the features. The document recommends manufacturers pursue strategies to rapidly bring such differentiators to market in their products.

1. The Importance of
“User-Facing, Patent-Protected Differentiators”
to Mobile Device Manufacturers
February 28, 2011 © Yuvee, Inc. All rights reserved. 1

2. Overview of the Mobile Device Market
§ A big and repetitive game of catch-up with Apple
§ Rectangular devices with faces of plain glass
• Highly undifferentiated from customer perspective
ü Android (or similar) OS
ü Rectangular glass front (3.5 to 11 diagonal)
ü Plain case, few buttons
ü Inward/outward cameras
© Yuvee, Inc. All rights reserved. 2

3. Netbook Market Redux
§ For non-Apple manufacturers, this quickly devolves into a
game of lowest cost to consumer
§ We just saw this in the Netbook market: A consumer goes
into a store (such as Best Buy), and has a choice of at least 3
or 4 different netbooks by different manufacturers. Each
netbook varies hardly at all from the customer point of view –
pretty much indistinguishable form factor, hardware, memory,
wireless, cosmetics, etc – only the brand changes
§ This is a brutal game of (1) tiny product margins, lowest cost
manufacturing and fulfillment, and lowest pricing, and (2)
waiting for the market attention to shift to a new product
category
© Yuvee, Inc. All rights reserved. 3

4. Different Business Models
§ For non-Apple manufacturers who are looking to sell a certain volume
at a low price without any real impact on their EPS, market share,
brand recognition, etc … and without the risk of being a market leader
in innovation … this may be a viable game to play
• Apple, at this time and we project for a number of years still ahead, has successfully
positioned itself and its product lines as the leading trend-setter from a number of
perspectives: innovation in what matters to mobile users and successful
development of “compound products” meaning an integration of iconic devices with
a proprietary lifestyle ecosystem (iTunes)
§ For most manufacturers seeking to compete with Apple, the lowest
common denominator pricing business model is a losing proposition,
and the question becomes … what is the solution?
© Yuvee, Inc. All rights reserved. 4

5. The Solution
§ The solution is innovation by either acquiring or developing:
user-facing, patent-protected differentiators
© Yuvee, Inc. All rights reserved. 5

6. Why are these the solution?
§ Two primary reasons
1) The vast number of consumers do not care about the internal
specifications of mobile devices (smartphones, tablets, etc)
• so differentiating by way of internal components - slightly more
memory, or slightly more processing power, etc - is not an effective
means to drive a buy decision by most consumers, and especially
not enough to create brand loyalty
2) User-facing differentiators drive buy decisions by consumers,
but if the differentiator is not patent-protected, every
competitor will incorporate any meaningful differentiator in their
next product release, ie, within one or two quarters
© Yuvee, Inc. All rights reserved. 6

7. User-Facing Patent Protected
Differentiators
§ These drive buy decisions by consumers, create new market share,
create brand loyalty, protect pricing from the lowest common denominator
problem, protect product margins and move EPS up
• Consumers base buy decisions on mobile products by user-facing
differentiators
• especially ones that add substantive value to consumers mobile lifestyle, which can
happen in many ways (ease of use, scope of use, cool factor, better apps, more app
developer commitment, etc)
• note that, differentiators that are protected by incremental patents on existing
features do NOT play this important role
• Patent protection restricts competitors from rolling a company s successful (ie,
substantively innovative from a consumer s mobile lifestyle perspective)
differentatiors into the competitors’ next product release
© Yuvee, Inc. All rights reserved. 7

8. Compound Devices Strategy
§ We continue to believe that compound devices are a
critical goal for any manufacturer (read our white paper
titled Compound versus Elemental Devices ) but we also
recognize that many companies cannot achieve this goal
for any number of reasons
§ Consequently, user-facing, patent-protected differentiators
are an absolutely critical asset for any manufacturer
seeking to compete in the mobile device market on a
business model that does not rely on a lowest common
denominator product price point
© Yuvee, Inc. All rights reserved. 8

9. Conclusion
§ Consequently, for the reasons outlined in the preceding
slides, manufacturers should be aggressively implementing
parallel strategies of
• acquiring patented, user-facing differentiators from
third parties
• developing internal and external skunk works teams
• implementing organization changes so that these
innovations have a quick time-to-market in the
company s products
© Yuvee, Inc. All rights reserved. 9

10. Related white papers
• Topics in innovation in mobile technology by Yuvee
• NeoKeys – How it works and why it is critical to touchscreen devices
• What is the NeoKeys Mixed Media Keypad?
• The Challenge of Touchscreen Clutter (or Making Mobile Screens Big)
• The Non-Subscriber Revenue Imperative – ROI on Telecoms CapEx
• Richness+Simplicity: The Holy Grail of Mobile UI
• Yuvee - Mobile User Experience Conference – UX Designers Den Slides
• Monetizing the Keypad Real Estate on Mobile Devices
• The Changing Face of User Input on Mobile Devices
• Compound versus Elemental Devices – New Mobile Device Market Strategies
• The Incredible Shrinking Search Results Page
• Dynamic Keypads: Terminology
© Yuvee, Inc. All rights reserved. 10

11. Read or download the white papers
§ www.yuvee.com/prWhitePapers.php
§ www.slideshare.net and www.scribd.com
§ Tim Higginson s profile on www.linkedin.com
§ Find them using a Google, Bing or other search
© Yuvee, Inc. All rights reserved. 11

12. About Yuvee
§ Yuvee
• develops and licenses advanced user interfaces and related
whole device designs for mobile and converged contexts that
make the next generation mobile and converged lifestyle
effortless and immersive, including the mobile Web and apps
• provides advisory services in multiple areas relating to mobile
and converged devices including
o differentiated, physical and graphical user interface design
o mobile and converged device design
o business innovation management processes (“BIMP”) optimization
§ Contact
• Tim Higginson at (847) 962-1623 or info@yuvee.com
• www.yuvee.com
February 28, 2011
© Yuvee, Inc. All rights reserved. Patents issued and pending – see lists at www.yuvee.com.
Yuvee and NeoKeys are trademarks of Yuvee, Inc. 12
Other trademarks are the property of their respective owners. No relationship or endorsement is intended or implied.