1.
The Future Of Mobile
Henry Blodget
BI Intelligence

2.
PCs are now small share of connected devices…
Personal Computers
Smartphones
Tablets
Smart TVs
Wearables
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
Units
Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates
Global Internet Connected Device Shipments

3.
Almost 1 billion smartphones shipped in 2013
Samsung
Apple
Huawei LG
Lenovo
Sony Ericsson
ZTE
Nokia Windows Phone
BlackBerry
HTC
Motorola
Other
0
25,000,000
50,000,000
75,000,000
100,000,000
125,000,000
150,000,000
175,000,000
200,000,000
225,000,000
250,000,000
275,000,000
300,000,000
325,000,000
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
UnitsShipped
Global Smartphone Shipments By Manufacturer
Source: BI Intelligence Es mates

4.
Tablets cannibalizing PCs…
PCs
Tablets
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13
(thousands)
Source: Gartner, IDC, Strategy Analy cs company releases
Global Computer Shipments

5.
“Phablets” filling in the gap…
Laptop
Tablet
Phablet
0
3
6
9
12
15
18
21
24
27
2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2
MillionsOfUnitsShipped
Source: Interna onal Data Corpora on August 2013
"Asia" excludes Japan and includes Australia, China, Hong Kong, India, Indonesia, Korea,
Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam.
Demand For Phablets Is Skyrocke ng In Asia

6.
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
(Millions)
Source: BI Intelligence es mates, ABI Research, IMS, Juniper, *Assumes 42$ average selling price for wearable devices
Wearable Device Market Size Forecast
Wearables beginning to take off…

7.
In-vehicle services
Hardware
Telema cs service
providers
Telecom service
providers
€ 0
€ 5,000
€ 10,000
€ 15,000
€ 20,000
€ 25,000
€ 30,000
€ 35,000
€ 40,000
€ 45,000
2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E
(millions)
Source: SBD, GSMA
Connected Car Revenue Forecast
Cars increasingly connected

8.
PC vendors, meanwhile, are getting smoked
Lenovo
HP
Dell
Acer
Other
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
(thousands)
Source: Gartner, IDC, BI Intelligence Es mates
Global PC Shipments By Manufacturer
iPad released Windows 8 released

9.
Mobile is creating big
challenges and opportunities.

10.
We spend 1 hour a day on our smartphones
Other
10%
Visit Websites
15%
Games
9%
Social Networking
17%
Talk
28%
Text
21%
Breakdown Of The Average Smartphone Owner's
Daily Time-Spend
On Average, U.S. Smartphone Owners Spend 58 Minutes Daily On Their Phones
Source: Experian Marke ng Services, May 2013

11.
43
39
30
17
0
5
10
15
20
25
30
35
40
45
50
TV PC/Laptop Tablet Smartphone
Minutes
Source: Google, August 2012
Average Minutes Spent Per Interac on By Device
We spend ½ hour on tablet each time we use it

12.
Mobile is the only media time that is growing
45%$
25%$
17%$
9%$
7%$
4%$
44%$
26%$
16%$
8%$ 8%$
6%$
43%$
26%$
15%$
7%$ 7%$
9%$
42%$
26%$
14%$
6%$
5%$
12%$
38%$
20%$
12%$
4%$
5%$
20%$
0%$
5%$
10%$
15%$
20%$
25%$
30%$
35%$
40%$
45%$
50%$
TV$ Online$ Radio$ Print$ Other$ Mobile$
Source:(eMarketer,(August(2013(
U.S.$Consumer$Media$Consump2on$Share$
2009$ 2010$ 2011$ 2012$ 2013$

13.
Mobile is enabling new forms of
entertainment, communication,
media, and commerce.

14.
Staggering growth for new communication apps…
Instagram
WhatsApp
Snapchat
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
Feb-12
Apr-12
Jun-12
Aug-12
Oct-12
Dec-12
Feb-13
Apr-13
Jun-13
Aug-13
TotalUserBaseSize
Source: News Reports, Company Lis ngs, ComScore, BII Es mates
Total User Base

15.
450 million WhatsApp users, +1 million a day
8
10
11
16
19
200
Ac ver Users
450
0
50
100
150
200
250
300
350
400
450
500
0
5
10
15
20
25
Apr-13 Jun-13 Aug-13 Dec-13 Feb-14
NumberOfAcveUsers(Millions)
NumberOfDailyMessages(Billions)
Source: WhatsApp, News Reports, BII Es mates
WhatsApp Growth
Messages Sent Ac ver Users

16.
Similar growth for WeChat and Line…
0
50
100
150
200
250
300
350
400
450
500
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Millions
Source: BI Intelligence Es mates
WhatsApp, WeChat, LINE, Viber Monthly Ac ve Users
(Global)
WhatsApp
WeChat
LINE
Viber

17.
Usage of these apps has blown past “texting”
16.2
19.5
4.4
41.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2011 2012 2013
BillionsOfMessagesPerDay
Source: Informa, April 2013
OTT Surpasses SMS
SMS OTT

18.
~1 billion pictures shared each day
Facebook, 43%
Snapchat, 49%
Instagram, 7%
Flickr, 1%
Top Photo Sharing Sites, November 2013
Daily Photo Uploads Among Top 4 Sites (809 Million Photos)
Source: BI Intelligence

19.
~500 million Snapchat pictures a day
0
50
100
150
200
250
300
350
400
450
Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
DailyPhotoSharesInMillions
Source: Snapchat, TechCrunch September 2013, CNET June 2013, KPCG May 2013
Snapchat's Daily Photo Shares Are Soaring

20.
Over 1/5th of Internet traffic is now from mobile
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-08
Apr-09
Aug-09
Dec-09
Apr-10
Aug-10
Dec-10
Apr-11
Aug-11
Dec-11
Apr-12
Aug-12
Dec-12
Apr-13
Aug-13
Dec-13
Source: StatCounter, December 2013
Global Internet Traffic
Desktop Vs. Mobile

21.
Mobile video is booming…
0
1
2
3
4
5
6
7
8
2011 2012 2013 2014 2015 2016 2017
MillionsofTerabytesPerMonth
Source: Cisco, 2013
Global Mobile Video Traffic Will Con nue To Surge

22.
Pandora
85%
Facebook
65%
Twi er
80%
0%
25%
50%
75%
100%
2008 2009 2010 2011 2012 2013E
%ofTrafficfromMobile
Source: Mary Meeker, Kleiner Perkins, companies, BII es mates
Mobile Usage: Pandora, Twi er, Facebook
Social and music are now mostly mobile

23.
Mobile is driving all of Facebook’s revenue growth
Total Ad Revenue
Mobile Ad Revenue
$ 0
$ 500
$ 1,000
$ 1,500
$ 2,000
$ 2,500
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
Millions
Source: Facebook
Facebook Ad Revenues

24.
Mobile is now ~25% of e-commerce traffic…
PC
Tablet
Smartphone
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Source: Monetate
Ecommerce Website Traffic By Device

25.
(But only 13% of e-commerce sales)
Desktop
E-Commerce Sales
Mobile
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13E
($millions)
Source: BI Intelligence, comScore, Federal Reserve Economic Data--St. Louis Fed
U.S. E-Commerce Retail Sales

26.
0
20
40
60
80
100
120
140
160
Am
azon
eBay
W
al-M
art
Apple
Target
BestBuy
The
Hom
e
Depot
Ticketm
aster
Etsy
Low
es
(Millions)
Source: comScore
Leading Retailers' Digital Audience Popula on
By Device
Desktop Only Desktop + Mobile Mobile Only
Retailers are seeing huge mobile audience gains …

27.
PayPal powers $30 billion in mobile transactions
PayPal Mobile
Braintree Mobile*
$0
$5
$10
$15
$20
$25
$30
$35
2008 2009 2010 2011 2012 2013
U.S.DollarsInBillions
*PayPal counted a small por on of Braintree's transac on volume as its own in the last 12 days of Q4 2013.
Source: PayPal
PayPal Mobile Transac on Volume
(Including Braintree 2013)

28.
Starbucks did $1 billion in mobile transactions last year
$145
$207
$244
$272
$340
$0
$50
$100
$150
$200
$250
$300
$350
$400
Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2014
MillionsOfU.S.Dollars
Source: Starbucks's Statements, BI Intelligence Es mates
Starbucks's Mobile Payments Volume
(United States)

29.
New mobile car services like Uber are thriving
11,879,718
781,088
4,407,629
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
PaymentCardsOnFile
Source: BI Intelligence
Payment Cards On File For Car-Hailing Apps
(Cumula ve)
Uber Ly Hailo

30.
Apple did $10 billion in app revenue last year
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2008 2009 2010 2011 2012 2013
(millions)
Source: news reports, company releases
Apple App Store Revenues
By Year

31.
Mobile has extended digital day to 18/7
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
Mobile Visits Desktop Visits
Source: Google Analytcs, Business Insider

32.
Source: comScore, Telefonica, Macquarie Capital (USA), December 2011
Each device has a different “prime time”
Share Of Device PageTraffic Over A Day:

33.
Where are we in the
smartphone adoption cycle?

34.
Entering the late innings...

35.
Smartphone sales have overtaken “dumb phones”
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1Q08 4Q08 3Q09 2Q10 1Q11 4Q11 3Q12 2Q13
(Thousands)
Source: Gartner
Global Mobile Phone Sales
Feature Phones
Smartphones

36.
Developed markets are nearing maturity
18%
65%
0%
10%
20%
30%
40%
50%
60%
70%
Jan 10 Jun 10 Nov 10 Apr 11 Sep 11 Feb 12 Jul 12 Dec 12 May 13 Oct 13
(asapercentageofthemobilepopulaon)
Source: comScore
U.S. Smartphone Penetra on

37.
US smartphone growth is slowing
0
5
10
15
20
25
30
35
40
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Users
Added
(Millions)
U.S. Smartphone Market: Year-Over-Year Net Adds
Source: comScore, Nielsen

38.
Biggest opportunities now China and India
0
50
100
150
200
250
300
China
India
USA
Brazil
Indonesia
Russia
Japan
M
exico
Germ
any
France
UK
Others
Italy
Australia
M
alaysia
Sw
eden
MillionsOfSmartphones
Source: Mediacells via The Guardian
Smartphone Sales In 2014 Will Be Driven By New
Users In Emerging Markets
Sales To New Smartphone Users In 2014 Smartphone Upgrades In 2014
Top 11 Markets
Other Markets

39.
China is already twice the size of the US market…
Mobile Users
Total Users
U.S. Users
0
100
200
300
400
500
600
700
June 06 Dec 06 June 07 Dec 07 June 08 Dec 08 June 09 Dec 09 June 10 Dec 10 June 11 Dec 11 June 12 Dec 12 June 13 Dec 13
MillionsOfInternetUsers
Source: China Internet Network Informa on Center
Chinese Internet Users

40.
…And the No. 2 market for apps
1,358
294
185 139 130
244
79
507
315
4.30
4.65
2.30
2.12
0.67
1.70
3.43
0.37
2.47
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
0
200
400
600
800
1,000
1,200
1,400
1,600
USA UK Germany France Brazil Russia Australia China Japan
AppDownloadsPerCapita
TotalAppDownlaods(Millions)
Source: XYO, BII Es mates
Total App Downloads vs. App Downloads Per Capita
By Country, April 2013
Total App Downloads App Downloads Per Capita

41.
$100
$150
$200
$250
$300
$350
2010A 2011A 2012A 2013E 2014E 2015E 2016E
AverageSellingPrice
Source: BI Intelligence Estimates
Global Smartphone Average Selling Price
Forecast
Prices are dropping fast

42.
iPhone sales growth has cratered
0%
20%
40%
60%
80%
100%
120%
140%
160%
0
10,000
20,000
30,000
40,000
50,000
60,000
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
YOYSalesGrowth
UnitSales(Thousands)
Source: Company Filings
iPhone Sales
Unit Sales YOY Sales Growth

43.
iPad sales growth has also nose-dived
-50%
0%
50%
100%
150%
200%
0
5,000
10,000
15,000
20,000
25,000
30,000
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
YOYSalesGrowth
UnitSale(Thousands)
Source: Company Filings
iPad Sales
Unit Sales YOY Sales Growth

44.
~225 million tablets were shipped in 2013
Apple
Amazon (Kindle Fire)
Windows
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,000
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Global Tablet Shipments
By Pla orm
Source: BI Intelligence Es mates
Android

45.
But growth is slowing rapidly
Smartphones
Tablets
0%
50%
100%
150%
200%
250%
300%
350%
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Source: BI Intelligence Es mates
Year-Over-Year Growth
Smartphones vs. Tablets, Quarterly

46.
What about the platform war?

47.
We have a winner!

48.
~80% of smartphones run Android
Android
Apple iOS
Microso
BlackBerry
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
ShareofGlobalUnitSales
Source: IDC, Strategy Analy cs
Global Smartphone Market Share By Pla orm

49.
~60% of tablets run Android
Android
Apple
Amazon (Kindle Fire)
BlackBerry Nook Windows
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Source: BI Intelligence Es mates
Global Tablet Market Share
By Pla orm

50.
~60% of all new computing devices run Android
Android
Windows
Apple
BlackBerry
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Source: Gartner, IDC, Stategy Analy cs, Company Filings, BI Intelligence Es mates
Global Compu ng Pla orm Market Share

51.
Android used to lag Apple
badly with app developers.

52.
Not anymore.

53.
Android
34%
iOS
33%
HTML5
17%
Windows Phone
5%
BlackBerry
4%
Other
7%
Mobile Developers' Main Pla orm
Source: Developer Economics, July 2013
Android now as popular with global developers as iOS

54.
Android “fragmentation” improving
ReprintedWith Permission From OpenSignal, “Android FragmentationVisualized”

55.
A majority of users now on “Jelly Bean”
Froyo
1%
Gingerbread
20%
Ice Cream Sandwich
16%
Jelly Bean
61%
KitKat
2%
Android Pla orm Distribu on, February 2014
Source: developer.android.com

56.
Apple still very strong in US — but weaker globally
Android
Apple
BlackBerry
Microso
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13
U.S. Smartphone Market Share By Pla orm
Source: comScore

57.
In US, Apple also still has edge in ad revenue
iOS
Android
Other
RIM
Symbian
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
%MarketShare
Source: Opera Media Works, The State Of Mobile Adver sing Q2 2012-Q3 2013
Ad Revenue Share By OS

58.
And a big edge in eCommerce traffic…
iPad
iPhone
Android Phone
Android Tablet
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
Source: Monetate
Ecommerce Website Traffic By Mobile Pla orm

59.
Should you be “mobile only?”

60.
No!

61.
The world is now “multi-screen”
Personal Computers
Smartphones
Tablets
Smart TVs
Wearables
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
Units
Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates
Global Internet Connected Device Shipments

62.
You should be “mobile, too.”

63.
What about ad spending?

64.
One thing we can learn from the
history of media…

65.
Money follows eyeballs.

66.
Eyeballs are moving to mobile
45%$
25%$
17%$
9%$
7%$
4%$
44%$
26%$
16%$
8%$ 8%$
6%$
43%$
26%$
15%$
7%$ 7%$
9%$
42%$
26%$
14%$
6%$
5%$
12%$
38%$
20%$
12%$
4%$
5%$
20%$
0%$
5%$
10%$
15%$
20%$
25%$
30%$
35%$
40%$
45%$
50%$
TV$ Online$ Radio$ Print$ Other$ Mobile$
Source:(eMarketer,(August(2013(
U.S.$Consumer$Media$Consump2on$Share$
2009$ 2010$ 2011$ 2012$ 2013$

67.
6%
42%
26%
14%
12%
23%
43%
22%
10%
3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Print TV Web Radio Mobile
Source: IAB, eMarketer, Mary Meeker
2012 U.S. Ad Spending vs. Consumer Time Spent By Media
Time Spent Ad Spend
Mobile ad spending still lags time spent

68.
So the money will follow…
Offline
All Other Online
Mobile
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
(billions)
U.S. Adver sing
Source: IAB, U.S. Census Bureau, Stategy Analy cs. BI Intelligence es mates

69.
Spending is moving to mobile…
48%
43%
21%
19%
7%
15%
7% 6%
6% 7%
5% 4%
2% 2%
3% 3%
0.5% 0.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
H1 2012 H2 2013
%OfTotalDigitalAdRevenue
Source: IAB 2013
US, Digital Ad Revenue By Format
Email
Rich Media
Sponsorship
Lead Genera on
Digital Video
Classifieds
Mobile
Display/ Banner
Search

70.
Mobile ad prices are lower but rising
$3.50
$0.75
Desktop Internet Mobile Internet
Effec ve CPM, Desktop vs. Mobile
Source: comScore, Vivaki, Mobclix Exchange

71.
US mobile ad spending per sub growing fast
$0.0 $0.1 $0.1
$0.8
$1.4
$4.5
$0.1 $0.3 $0.3
$1.3
$2.8
$9.2
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
La n America Middle East and
Africa
Central Europe Asia-Pacific Western Europe North America
Source: IAB, IHS
Annual Mobile Ad Spend Per Mobile Subscrip on
By Region
2011 2012

72.
Search
Display
Messaging
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2007 2008 2009 2010 2011 2012 2013E
(Millions)
Source: IAB, BI Intelligence Es mates
Global Mobile Adver sing Revenue
By Format
Mobile is still dominated by paid search ads

73.
And Google owns almost all of it
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec08Feb
09Apr09Jun
09Aug09Oct09Dec09Feb
10Apr10Jun
10Aug10Oct10Dec10Feb
11Apr11Jun
11Aug11Oct11Dec11Feb
12Apr12Jun
12Aug12Oct12Dec12Feb
13Apr13Jun
13Aug13Oct13Dec13
Source: StatCounter
Global Mobile Search Market Share
Google Yahoo! bing

74.
So, what’s next?

75.
6%
9%
19%
2%
4%
7%
7%
17%
7%
22%
0% 5% 10% 15% 20% 25%
Other
Connected TV
Everything As A Service
Indoor Loca on
Distance Learning
Mobile Adver sing
Mobile Health
Mobile Wallet
Connected Car
Wearables
Source: Open Mobile Media, July 2013; n = 50+ Top-Level Mobile Execu ves A ending The Open Mobile Summit
What Is The Next Big Thing In Mobile?
Wearables!

76.
Health devices are the most popular
87%
13%
20%
12%
6%
2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No Yes Nike+
Fuelband Or
Ac vity
Tracker
Fitbit Bodymedia
Fitcore
Pebble Watch Jawbone UP Recon Ski
Goggles
Source: Bloomberg/Survey Monkey, April 2013
Have You Ever Purchased A Wearable Compu ng Device Or
Received One As A Gi ?
If So, Which One? (US Respondents)

77.
Not much interest in smart watches so far
Galaxy Gear
Official Shipments
Galaxy Gear
Low Es mate Retail Sales
Pebble Shipments
May-June 2013
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Month 1 Month 2
Source: Samsung, New Reports, BII Es mates
Samsung Galaxy Gear Vs. Pebble Smart Watch
Es mated Shipments And Retail Sales - First Two Months

78.
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Tech-Sensi ve Tex les And Clothing
Headset/Eyeglasses
Sensor-Enabled Wristwear
Medical Devices That Transmit Data
Source: Bloomberg West/SurveyMonkey
Consumers Are Interested In Smart Medical Devices And
Wristwear
Interest in glasses and headgear is only modest

79.
They cost a lot, and there’s the creepiness thing
Yes
28%
No
53%
Not Sure
19%
Would You Feel Comforable If Someone You Were
Interac ng With Were Wearing Glasses Like These?*
Source: YouGov, May 2013 *n = 1,000 smartphone owners in U.S.
Image: Google+/Robert Scoble

80.
Connected Cars
Image: GM

81.
We spend 1.2 hours a day in cars...
Sleeping
7.6 hours
Leisure And Sports
2.5 hours
In The Car 1.2 hours
Ea ng/Drinking 1.1 hours
Household Work 1.1 hours
Other 1.7 others
0
12
24
Source: Bureau Of Labor Sta s cs
Average Daily Time Spent Per Person
U.S. Employed Ci zens ages 25 to 54
Working
8.8 hours

82.
So connectivity will soon come standard
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E
UnitShipments(thousands)
Source: SBD,GSMA
Connected Car Unit Shipment Forecast

83.
Music, maps, weather, traffic, news are the killer apps
U.S. Connected Cars
Pandora U.S.
Connected Car Ac va ons
-
5,000
10,000
15,000
20,000
25,000
30,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NumberOfCars(Thousands)
Source: News Reports, Company Statements, BI Intelligence Es mates
Es mated U.S. Market For Pandora In The Car

84.
And soon you won’t even have to drive…

85.
Enjoy the mobile future!
Personal Computers
Smartphones
Tablets
Smart TVs
Wearables
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E
Units
Source: Gartner, IDC, Strategy Analy cs, Company Filings, BI Intelligence Es mates
Global Internet Connected Device Shipments

86.
Thank you

87.
Henry Blodget
CEO & Editor-in-Chief, Business Insider
Tony Danova, Research Analyst
Marcelo Ballvé, Editorial Director
BI Intelligence is a new subscription service from Business Insider
that provides in-depth insight, data, and analysis of the mobile industry.
More info at intelligence.businessinsider.com
Cooper Smith, Research Analyst
John Heggestuen, Research Analyst