Growing the Mobile MarketplaceMarketplace

Insights from the United States and China

Josh Crandall, PresidentNetpop Research, LLC

| Pocket 2009|

Introduction

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The PresentThe Present2009 brings another year of optimism about the future of mobile marketing…

… and persistent questions about the best use of the technology

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The PresentThe Present

What is the mobile web best for …

Brand loyalty?

Advertising?

New applications?

All of the above?

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The FutureThe FutureThe Pew Internet & American Life Project predicts that mobile devices will be the dominant way we connectwill be the dominant way we connect to the Internet by 2020*

Is this realistic? Yes

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* "The Future of the Internet III," Janna Quitney Anderson and Lee Rainie, Pew Internet & American Life Project, December 14, 2008

The Netpop FutureThe Netpop FutureOnline access from web-enabled phones grew 4 percentage points (36 percent increase) from 2007 to 2008 in the U Sincrease) from 2007 to 2008 in the U.S.

The rate of mobile adoption continues to accelerate

Even if mobile web adoption continues at the current rate, half the broadband population will access the Internet from a mobile phone by 2015

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The Netpop FutureThe Netpop Future Handset improvements bring more users to the web

… but cost and infrastructure barriers slow universal mobile connectivity

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Global Access GapGlobal Access Gap

Many countries share these barriers to adoptionadoption

… yet mobile web access in China and emerging economies far exceeds that of the U.S.of the U.S.

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PerspectivePerspective This Netpop report examines mobile Internet access among broadband users in the U S and Chinausers in the U.S. and China

What are the benefits of accelerating mobile web access?

What can the U.S. market learn from Chinese Mobile Netizens?

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Market Size

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China dwarfs the U.S. in mobile web access

41% (57 million) own web-enabled mobile phones

18 MillionU.S. 138 million Broadband Users (13+)

18 MillionMobile Web Users

243 million Broadband Users**(13+)

China

75% (182 million) own web-enabled mobile phones

102 Million

Mobile Web pMobile Web Users

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**China Internet Network Information Center, U.S. Census, Netpop Research, LLC

*Pew Research Center, U.S. Census, Netpop Research, LLC

China dwarfs the U.S. in mobile phone ownership

• Web-enabled mobile phones dominate the mobilemarket in China, creating an enormous, 24/7connected marketplace

• Over half of U.S. Broadbanders do not even own aOver half of U.S. Broadbanders do not even own aweb-enabled mobile phone

Mobile Web Access: U.S. and China

28%

13%

42%

60%

70%

80%

90%

100%

59%

25%

33%

20%

30%

40%

50%

60%

Access Web f rom mobile phone

Have Web-enabled phone but do not use to access Web

Do not have Web-enabled phone25%

0%

10%

U.S. China

enabled phone

Percent Who Own 2+ Mobile Devices

18% 28%

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Base: All respondents U.S.: n=4383 China: n=4269

18% 28%

The desktop monopoly is eroding--slowly

B th t i ti t f• Both countries continue to move away fromstationary connectivity with increased use oflaptops and mobile devices for Internet access

• The growth in mobile web access from 2007 to2008 is more than double in China, compared tothat of the U.S.

Change in Devices Used for Web Access

93%87%

94%88%

80%

90%

100%

Change in Devices Used for Web Access 2007 to 2008: U.S. and China

45%51%

54%

32%

61%

42%

40%

50%

60%

70%

80%

11%15%

32%

0%

10%

20%

30%

Desktop compuer Laptop Computer Mobile device

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p p p p pBase: All respondents U.S. 2007: n=4068

U.S. 2008: n=4383China 2007: n=4002China 2008: n=4269

"Smartphone" penetration is comparable

• 51% of mobile devices used to access the Internetin each country are smartphones

• Top smartphone brands:

Change in Mobile Devices Used for Web Access

in U.S.

in China

85%

78%

70%

80%

90%

100% 2007 to 2008: U.S. and China

55%

41%

13%

53% 51%

39%

51%

23%

20%

30%

40%

50%

60%

13% 11%6%

%

10%

Cell phone Smartphone PDA

Base: Use mobile device to access the Internet

U.S. 2007: n=451U.S. 2008: n=637

China 2007: n=1266China 2008: n=1806

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access e e e U S 008 63

Now that you have seen an overview of theNow that you have seen an overview of the mobile marketplace in the U.S. and China, we hope you are interested in learning more.

To purchase the full report, please go to www netpopresearch comwww.netpopresearch.com.

Topics covered include:

•Year/year trending from 2007 to 2008

Comparison of

•Market size and device ownership (cell phones, web-enabled phones, smartphones)

•Device of choice for internet access

•Crossover between computer and mobile device Comparison of

U.S. and Chinese

Mobile Internet Users

use

•Time and locations of use

•Premium content purchases in each country

•Attitudinal segmentation of mobile web users in each countryeach country

•Demographics

•Conclusions, implications and opportunities

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