The State of Mobile

US Mobile Media Landscape and Trends

Mark Donovan, SVP Mobile + Sr. Analyst

June 8 2010

Agenda
comScore Mobile Data Macro Mobile Media Trends Shifting Mobile Media Landscape Smartphones & Device Trends Summing Up

comScore, Inc. Proprietary and Confidential.

comScore Mobile Data

comScore, Inc. Proprietary and Confidential.

comScore Mobile Data

Complexity and fragmentation of mobile market requires an array of data sources
and methodologies for a 360 view

MobiLens
Market Tracking via Intelligent Online Survey

Network Census
Carrier Log Analysis GSMA MMM

Site + App Census

Mobile Web, App AdNet Tagging

Mobile Metrix
Smartphone Meter Panel

Ad Metrix Mobile Plan Metrix Mobile

Mobile Ad Tracking and Planning Tools

comScore, Inc. Proprietary and Confidential.

MobiLens comprehensive suite of measures MobiLens Database

Demographics
Age, Gender, Income, Education, Employment, Household Composition, more

Personalization
Changed or Made Own Ringtones/Graphics, Purchased Ringtones/Graphics, Quantity, Ringback Subscriptions, more

Subscription and Operator Information

Current and Previous Operator, Length of Ownership, Length of Subscription, Monthly Plan, Bill Size, Data Plan Status, Satisfaction, more

Music & Video

Sideloaded Music, Downloaded Music from Operator, Source of Downloaded Music, Watched Broadcast TV, Watched OnDemand Video

Messaging
Chat, Personal Email, Work Email, Instant Messaging, Photo Messaging, more

Social Media + UCG

Accessed Social Network, Sent Photos to Phone, Sent Photos to Website, Captured Video, Sent Video to Phone, more

Games
Played Games, Type of Games Played, Number Downloaded, Number Purchased, Subgenres, Method of Discovery, Method of Purchase, more

Content Access Methods

Category, Sub-category and Brand Access via Mobile Browser, Downloaded Application, or SMS

comScore, Inc. Proprietary and Confidential.

Macro Mobile Media Trends

comScore, Inc. Proprietary and Confidential.

Mobile On Track to Eclipse the Desktop

Number of Global Users (Millions)

2,000 1,800 1,600 1,400 1,200

1,000 800 600 400 200

0
2007 2008 2009 2010 2011 2012 2013

Desktop Mobile

2014

2015

comScore, Inc. Proprietary and Confidential.

Source: Morgan Stanley Research

38% of Mobile Phone Owners Browse the Mobile Internet, Use Applications or Download Content (Mobile Media Users)
The number of people who are just using voice has declined 11% year on year. Mobile media users account for 31% of EU5 mobile phone owners

Mobile Media Segments 1Q09 v. 1Q10 100% 80% 60% 29% 40% 20% 0% 1Q09
Mobile Media = Connected Media (except SMS only) in MobiLens

36%

32%

Just Voice

30%

SMS (but not mobile media)

35%

38%

Mobile Media

1Q10
Product: MobiLens Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential.

Country: US N=30,740

Mobile MediaIts Not Just The Kids Who Are Doing It

Average mobile media user is 32 and 46% are female. Younger demographics create their own ringtones, use social networking services and listen to music
(web 2.0 type services).

Mobile internet services (browsing, apps and e-mail) skew 55-60% male.

Demographics of Mobile Media Activities

54 Purchased Ringtone 52 50 Made Own Ringtone % Female 48 46 Purchased Game 44 Listened to Music 42 Email 40 24.0 26.0 28.0 30.0 Median Age 32.0 34.0 36.0 Browser Used App Social Networking Played Games Mobile Media Unlimited Data Plan Ringback Higher on chart = more female Further to right = older Size of bubbles = # of users

Product: MobiLens Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential.

Country: US N=30,740

Growth of the Key Market Enablers Continues

Two key enablers (smartphones and 3G devices) are now firmly entrenched in the market. Smartphone owners rise 85% year on year. Unlimited data plan subscribers, grew 57% year on year to 24% penetration.

50.0% 45.0% 40.0% 35.0%

Growth of Market Enablers

45%

% Market

30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

35% 24% 20% 15% 11%

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Unlimited Data Plan Subscribers

3G Device Owners
Product: MobiLens

Smartphone Owners

Data: Three month average ending March 2010

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Country: US N=30,740

Browser + App Growth Tracks with Rise in Unlimited Data

AT&T s elimination of unlimited data plans could be barrier to new mobile media
adopters but is unlikely to impact current users who are hooked on ubiquitous data access

38% 36% 34%

US Mobile Data Usage and Plans

36% 33% 31% 28%
29% 10%

Usage % of Total

32% 30% 28% 26%

46%

24%
24% 22% 20%

24% 21%

55%

20%

Apr-2009 May-2009 Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010

Any Data Plan

Unlimited Data Plan*

Used Application

Used Browser

comScore MobilLens 3 Month Avg ending April 2010

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*comScore began capturing unlimited data plan usage with Sept 2009 data

Samsung, Motorola and LG Leads in Mobile Market Share

But RIM and Apple have outsized share of mobile media users

OEM Market Share for Total Market and Mobile Media Users
25%

19% 22%

20%

22%

22%
17% 13%

19%

18% 16% 14%

20%

% Market

15%

13%

12% 10%

10%

8%

8%
5% 4%

8% 6% 4%

5%

2% 1% Apple Sony Ericsson

2% 0%

0%

Samsung

Motorola

LG

RIM

Nokia

Total Market (All Device Owners)

Mobile Media
Product: MobiLens Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential.

12

Country: US N=30,740

% Mobile Media Users

Shifting Mobile Media Landscape

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13

Early Mobile Content Successes Are Waning

Personalization sector is clearly in decline Mobile games audience is flat, but theres much more to the story (well get to that shortly).

10.0%

Personalization and Game Audience Trend

9.1% 8.4%

9.0% 8.0% 7.0% 6.0%

% Market

5.7% 4.7% 5.5%

5.0% 4.0% 3.0%

2.7% 2.8% 2.5%

2.0% 1.0% 0.0%

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Ringtones

Ringback Tones

Graphics
Product: MobiLens

Games

Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential. 14

Country: US N=30,740

Mobile Video Remain a Niche

4.7% watched some form of video Broadcast TV (linear video) grew 32% YoY increase in the number of users but still only
represents 1.3% of the market.

TV / On Demand Video Trend, US

2.5%

2.0%

2.1% 1.9%

% Market

1.5%

1.3%
1.0%

1.0%
0.5%

0.0% Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

Broadcast TV * Change of methodology for video measures in April 09

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On-Demand Video
Product: MobiLens Data: Three month average ending March 2010 Country: US N=30,740

30% of Mobile Owners Now Browse the Mobile Internet

More than 1 million mobile users began browsing the Internet each month (Q109-Q110) Social networking users are showing the highest gains with 80% YoY growth.

Mobile Internet Trends

35% 30% 25%

% Market

20% 15% 10% 5% 0%

Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

Apps (except native games)

Mobile Browsing

Email

Social Networking

IM

Product: MobiLens Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential. 16

Country: US N=30,740

Mobile Users Access a Wide Range of Content

Top 20 Mobile Content Categories Reach Among Active Users (Browsing, Apps, SMS), April 2010, US
online retail auction sites electronic payments gaming information television guides classifieds general reference business directories traffic reports restaurant information tech news bank accounts stock quotes or financial news movie information entertainment news sports information maps news search weather 12% 12% 12% 13% 13% 15% 17% 18% 18% 20% 21% 21% 22% 24% 29% 31% 34% 36% 44% 49%
Product: MobiLens Data: Three month average ending April 2010
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Communicating & Sharing Drives Mobile Web

47% of mobile users search v. 88% of PC Internet users. The bars in yellow highlight the genres that relate to communicating and sharing with others, the red
bars indicate news and weather genres.

The mobile Internet is as much about connecting with friends and family as it is about viewing news and
info.

Top Genres for Mobile Browsing

Bank Accounts Tech News Financial news Movie Information Maps Photo / Video Sharing Service Work Email via Browser Entertainment News Sports Information IM via Browser News Weather Social Networking Personal Email via Browser Search 0% 5% 10% 15% 17% 19% 19% 20% 21% 22% 23% 27% 28% 29% 35% 38% 40% 45% 47% 20% 25% % Browsers
Product: MobiLens Data: Three month average ending March 2010
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30%

35%

40%

45%

50%

Country: US N=30,740

Browsing Audience Larger than App Audience . . . Mostly

Top 10 Mobile Content Categories Browser v. App US, April 2010
40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Browser

App

Product: MobiLens Data: Three month average ending April 2010

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iPhone and Android Benefit from Map Integration

Slight lead for RIM on map use via browser, but success of tight services
integration is clear.
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 20% 17% 17% 17% Accessed maps by Browser Accessed maps by App 44% 44%

0%
RIM iPhone
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Android
Product: MobiLens Data: Three month average ending April 2010

Early Mobile Content Successes Are Waning

Personalization sector is clearly in decline Mobile games audience is flat, but theres much more to the story (well get to that shortly).

10.0%

Personalization and Game Audience Trend

9.1% 8.4%

9.0% 8.0% 7.0% 6.0%

% Market

5.7% 4.7% 5.5%

5.0% 4.0% 3.0%

2.7% 2.8% 2.5%

2.0% 1.0% 0.0%

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Ringtones

Ringback Tones

Graphics
Product: MobiLens

Games

Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential. 21

Country: US N=30,740

Free Business Model Gaining Traction at Expense of Paid

Paid v. Free Trend in Games

8,000 7,000

Mobile Subscribers (000)

6,000 5,000 4,000 3,000 2,000 1,000 0

Trial only download Purchased by paying a fee

Past 12 Months
11% drop in subscribers purchasing games for a fee 67% increase in subscriber downloading full games for FREE

Downloaded full version of game for free

Feb-2009 Mar-2009 Apr-2009 May-2009 Jun-2009 Jul-2009 Aug-2009 Sep-2009 Oct-2009 Nov-2009 Dec-2009 Jan-2010 Feb-2010 Mar-2010 Apr-2010

Product: MobiLens Data: Three month average ending April 2010

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Growth for Mobile Advertising Continues in the US

Ad Metrix Mobile observed nearly 1,000 distinct products advertised using mobile banners
in March 2010.

comScore client studies consistently show positive impact of in-application brand

advertising (no need to wait for iAd)
Growth of Products Advertised in Ad Metrix Mobile Universe
1200 1000 800 600 400 200

Products

Product: Ad Metrix Mobile Data: March 2010

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Country: US

Mix of Advertisers Becoming More Mainstream

Mobile Endemic ads still account for majority of observed ads Increasing spend by CPG, auto, travel and other sectors P&G ranked 3rd in Ads in April
Count of Distinct Ad Creatives
CSW UpSNAP Services LLC Buongiorno Vitaminic S.p.A. Viacom Inc. Thumbplay, Inc. Media Engine Inc. News Corporation Procter & Gamble Company The Walt Disney Company Microsoft Corporation 0 50 100 150 200 250 Ad Count
Product: Ad Metrix Mobile Data: April 2010
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112 132 139 153 187 225 226 289 451 454 300 350 400 450 500

Country: US

Smartphones and Devices

OS share, Touch, platform comparisons

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1 in 5 Mobile Phone Owners in the US Now Have a Smartphone

Driving this increase are phones that provide a strong foundation for media
consumption

Apple, RIM, and Android-based phones show the most growth. All three phones
now market to consumers who want to mix business use with a personal phone
Growth in Smartphone Ownership (as a percentage of total market)

20 18 16 14 12 10 8 6 4 2 0

Percent of Mobile Users

Google Apple RIM Palm Symbian Microsoft

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comScore MobilLens 3 Month Avg ending March 2010

Smartphone Growth Has Clear Impact on Media Consumption

Service Penetration, US April 2010

Smartphone 15% 2% 37% 8% 53% 11% 78% 19% 84% 24% Feature Phone

Video

Music

Social Networking

Browsing

App Use

Product: MobiLens Data: Three month average ending April 2010

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Android Share Has Grown 5X in 12 Months

85% YoY increase in overall smartphone ownership Apple and RIM have grown share Android has surgedwill soon eclipse Microsoft

Smartphone Share Trend

45%

% Smartphone Owners

40% 35% 30% 25% 20% 15% 10% 5% 0%

38% 27%

42%

25% 21% 14% 10% 2%

Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

Apple

Android

Microsoft
Product: MobiLens

RIM

Data: Three month average ending March 2010

comScore, Inc. Proprietary and Confidential. 28

Country: US N=30,740

Smartphones Now Majority of Major Mobile Audiences

Mobile Audience Sizes by Phone Type, US

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Browsing App Use Social Networking Music Feature Phone

50%

54% 54% 55%

66% Video

Smartphone

Product: MobiLens Data: Three month average ending April 2010

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Smartphone Platforms Compete on Mobile Media

The Apple iPhone has revolutionized the market for mobile media, however Googles Android and RIMs
Blackberry devices are providing competition in terms of usage behavior.

Google and Apple platforms over-index on consumption behavior, compared to the smartphone average.

Mobile Media Consumption by Operating System

120.0% 100.0% % Penetration 80.0% 60.0% 40.0% 25.5% 20.0% 0.0% Apple Google RIM Microsoft Smartphone Non-Smartphone 96.2% 93.9% 86.9% 74.4% 86.9%

Mobile Media (Connected Media)

Used Application (except native games)

Product: MobiLens Data: Three month average ending March 2010

Used Browser

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30

Country: US N=30,740

Strong Growth for Advanced Device Features

70,000

Full Keyboard
60,000

XL Screen
50,000

Touch Screen
40,000

Accelerometer
30,000

20,000

10,000

Product: MobiLens Data: Three month average ending April 2010

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Touch is Redefining the Mobile Media Experience

Currently 112 variants of touchscreen smartphone models in US market Touch will become dominant smartphone interaction model by Q3 Not limited to smartphonesmid-range touch devices also selling and performing

Google, 22% Microsoft, 14%

Not Touch 50%

Touch 50% Apple, 45%

RIM, 9%

Palm, 9%

Symbian, 1%

Product: MobiLens Data: Three month average ending April 2010

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Touch UIs Driving Higher Penetration of Key Services

Smartphones by Touch Support
90% 80% 70% 60% 83% 72% 85% 74% 69%

50%
40% 30% 20% 10% 0% Used Browser Used Application (except native game) Listened to Music Watched TV/Video 27% 19% 11% Touch NotTouch

Product: MobiLens Data: Three month average ending April 2010

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Summing Up

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Summing Up: The Big Picture

Mobile Media Market has fully arrived
1/3 of phone owners using mobile media Critical mass for publishers with room for sustained growth

Technology enablers continue to grow

Even faster networks / devices arriving

Growth of key consumer enablerunlimited data plansin doubt

Will others follow AT&T with tiered data pricing? Will it slow growth of

adoption? (Check back at the end of the year)

Classic mobile content businesspersonalizationin decline App Store economics driving to free
Mobile ad model worksand it must workto monetize Web and Apps

Encouraging diversity in mobile advertisers and increasing (repeat) spends

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Summing Up: The Platform Wars

Smartphones have hit critical mass
Majority share of major mobile media audiences despite 20% overall penetration Touch interfaces are on path to dominance Sensors and cloud services will continue to change the way we interact with devices,

people, content, services

Smartphones platform competition creating an epic business battle

RIM/Apple/Google have strong starts
Nokia/Microsoft/HP?/Others? are in it for the long haul Device replacement cycles and carrier competition create substantial opportunities for

the lead to change (and metrics for the lead are variable)

Publishers and developers must contend with (the costs of) fragmentation
Of the audience. . . platform priorities? . . . what about feature phones? Of content delivery . . . Apps? Which development platform? . . . HTML5?

But ubiquity, intimacy of mobile makes it an increasingly critical channel

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Thank You.

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