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SMITH-TRG

iPoppedPOST ‘Blood in the Boardroom’ UPDATE

DIGITAL-MEDIA CXO Meeting led by Richard D. Smith, CEO

September 2010

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SMITH-TRG

September 2010

introduction

BOARDROOM HIGHLIGHTS

PLAYERS UPDATE

YOUR FUTURE

agenda

Attendee collateral presentation for reading, not presenting. Excludes proprietary information.

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Richard D. Smith is President & CEO at SMITH-TRG a

business performance and value creation advisory firm.

He is a frequent speaker and publisher of presentations

on visioning, innovation, enterprise transformation,

iPopped/Apple Centric age, future-world markets, and

value creation.

Richard, as ‘Trusted Business Advisor’, assists CEO’s

to create business value; CXO Stakeholders to solve

business performance problems; Innovators to develop

more successful ‘customer centric’ propositions; and

Business Developers to maximize return on their

investments.

His global consulting, IT/telecom & digital-media roots

uniquely enable him to work with media industry line-of

business CXO’s to develop and execute business value

creation strategies.Richard D. Smith, CEO

SMITH-TRG

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introduction

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SMITH-TRG

September 2010

iPoppedthe Paradigm Shift – led/driven by Steve Jobs

as change agent with iPhone (smartphones) and iPad

(tablets) as catalysts for digital-media transformation.

BOARDROOM HIGHLIGHTS

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IMPACT . . .

September 2010

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September 2010

Acceleratedmedia sector fragmentation -

up & down the value-chain

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SMITH-TRG

September 2010

Impacted?anyone, small to large, U.S. or foreign, in and/or

around digital-media eco-system markets!

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SMITH-TRG

Next Steps

September 2010

Stop the Hemorrhaging SURVIVAL

Regain Market RELEVANCE

Position to Drive VALUE CREATION

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SMITH-TRG

September 2010

SURVIVALof the smartest & quickest

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SMITH-TRG

September 2010

RELEVANCEno playing field advantage without market relevance

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SMITH-TRG

September 2010

VALUEno future without sustainable value creation

Skeptics – 16% of

total populationLate Majority

34%

Early

Majority

34%

Early

Adopter

13.5%

Visionaries

& Leaders

2.5%

Th

e

‘Ch

asm’

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Response Delay Impacts –Survival, Relevance & Value!

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Time to go ahead make the

T O U G H

DECISIONS

SMITH-TRG

September 2010

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SMITH-TRG

September 2010

PLAYERS UPDATE

Media’sI N T E R D E P E N D E N C Y P U Z Z L E

players adjust across the digital-media value chain

SMITH-TRG

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Apple

RELEVANCEKeeps gaining iPopped playing field advantage . . .

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(Apple officially a computer

hardware & software company)

Apple: Strategically morphing

itself into a broader media company

September 2010

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SMITH-TRG

People have downloaded –11.7billion songs from iTunes.

Over 450million TV episodes.

100million movies & 35million

books.

September 2010

Number one online media store in the world.

iPod family

275 million Sold

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Apple . . .iOS apps -- Over 6.5billion apps downloaded.

Over 200 every second...

September 2010

Apple . . .Retail store chain…80,000 1on1 customer technical sessions weekly

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SMITH-TRG

September 2010

Apple . . .The Store and In-Store experience…customer relationship driven.

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SMITH-TRG

September 2010

London Paris

SMITH-TRG

September 2010

EquipmentHardware & Software(delivering media to the mind)

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.

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SMITH-TRG

“There is at least one point in the history of any company when you have to change

dramatically to rise to the next level of performance. Miss that moment - and

you start to decline.”– Andy Grove, former Intel Chairman

September 2010

SMITH-TRG

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. DellIn Transformation

September 2010

From PC maker to technology

solutions.

Dell lost bidding war for 3PAR

Inc. to H-P @$33.

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. September 2010

Dell's consumer-PC business lost $4 million over past six months

Dell launched tablet, ‘Streak’, & 3.5-inch touch-screen phone, ‘Aero’,

which runs on Google Android operating system

SMITH-TRG

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. MotorolaSplitting in Two

September 2010

Exiting wireless-networking

business with a $1.2 billion

sale of much of its equipment

division to Nokia Siemens

Networks.

The proceeds will increase

Motorola's cash pile as it plans

to spin off its cellphone and

cable set-top box divisions.

The cellphone division is trying

to turn itself around with a set of popular smartphones.

SMITH-TRG

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. IntelStrategic Acquisitions

September 2010

The Germany-based

company makes chips

for Apple's iPhone and

other smartphones.

To buy Infineon Technologies’

Wireless Solutions business.

Enables Intel to offer a portfolio

of products that covers the full

range of wireless options from

Wi-Fi and 3G to WiMax and LTE.

Before the critical holiday shopping season . . .

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Here come

T H E

TABLETS

SMITH-TRG

September 2010

SMITH-TRG

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SamsungIntroduces its iPad called Galaxy Tab

September 2010

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Toshiba

The Folio 100, Android based, is not Toshiba's first tablet.

JournE Touch, touch-screen tablet running on Microsoft

Windows, unveiled September 2009 before Apple started

selling the iPad in April.

SMITH-TRG

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Building Eee Pad tablet running

Microsoft Windows due Q1/11

AsustekComputer Inc. (Taiwan)

Eee netbook demand declining

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. September 2010

Amazon

Third-generation Kindle, digital book reader, that's lighter,

smaller and faster than the current model

Sharper display, longer battery life, twice the storage,

and Wi-Fi reception to download e-books.

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. September 2010

Barnes & NobleNOOK e-book reader. Brick-and-mortar

declined faster than expected.

Posted net loss of $62.5 million for first quarter compared to

$12.3 million profit a year earlier.

SMITH-TRG

Smartphones Global annual sales doubling

to 506 million units

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SMITH-TRG

September 2010

Wireless

CarriersU.S. State of Play

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Verizon vs. AT&T

September 2010

Subscribers: 92.1 million

Users Smartphones: 18.5%

4G: Due in 25-30 cities 2010

Subscribers: 90.1 million

Smartphones: 33.7%

4G: Plans to roll out 2011

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Sprint/Nextel vs. T-Mobile

September 2010

Subscribers: 48.2 million

Smartphones: 29%

4G: Available 49 cities(via Clearwire network)

Subscribers: 33.6 million

Smartphones: 27.9%

4G: NONE

September 2010

Wall Street

ISSUES . . .

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SMITH-TRG

September 2010

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SMITH-TRG

September 2010

ClearwireNeeds billions to finish 4G!

Sprint currently owns 54%!

Sprint could sell percentage

of ownership to competitor

T-Mobile?

September 2010

Sprint’s/Virgin Mobile offers

unlimited broadband prepaid

packages for $40 a month.

Stability of new AT&T/Verizon

metered pricing model starting

to fall apart.

Pricing

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BATTLEFor control of Living Room TV

(entertainment platform)

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AppleIntroduces Updated

Apple TV

September 2010

SMITH-TRG

Connects to a high-definition television - can show rented movies and TV shows from Apple's own service, plus content from Netflix, photos on Flickr, YouTube clips and more.

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SMITH-TRG

Apple . . . Refining plans to annex the living room into its entertainment empire.

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GoogleLaunched

Google TV

September 2010

SMITH-TRG

Angles to become a bigger player in the living room with a

technology called Google TV, based on its Android software

for cellphones, that will let viewers search for Web video and

run Internet apps alongside TV programs.

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AmazonSubscription Push

Challenges Rivals

September 2010

SMITH-TRG

Working on a new subscription service that would deliver TV shows and movies over the Internet.

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Logitech

September 2010

SMITH-TRG

Partnering with Google… set-top box to bring the Web to the

TV-viewing experience.

At Logitech, revenue declined from $2.3 billion in 2007 to $1.9 billion in 2009.

Seeks Living Room

Dominance

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Sony

September 2010

SMITH-TRG

Millions of PlayStation3 and PlayStation Portables already connected to the internet, allows them to download movies.

90 percent of Sony products would be able to connect to

each other and the Internet by 2011

Using PlayStation

Consoles

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is all about . . .

September 2010

YOUR FUTURE

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Disruptive Innovation

September 2010

Potential

Value-Chain

IMPACT

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Where do you want

to be on the curve

September 2010

Skeptics – 16% of

total populationLate Majority

34%

Early

Majority

34%

Early

Adopter

13.5%

Visionaries

& Leaders

2.5%

Th

e

‘Ch

asm’

1 2 3 4 5

SMITH-TRG

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Response Delay Impacts –

Survival, Relevance & Value!

September 2010

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September 2010

Control . . .gaining and maintaining

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September 2010

Vision

Mission

Purpose

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Embracing being different!

September 2010

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What Now

September 2010

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September 2010

What Decisions Do

You Plan to Make?

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For value creation assistance, e-mailRDSmith@SMITH-TRG.com

SMITH-TRG

September 2010