Proposal for BU1

Contents Heavy steps in growth Market competition Arimacomms insight

More volume not equal to more value

Before 2004 2005 2006 2007

A3618

GC75

T100

Z200

J200 J210

J220

Z300

J230

K300

K200

K220 T250

2005 Arima occupied SEMC 20 % 2006 Arima occupied SEMCs 16 %

2007 Arima expect to SEMCs 10 %

2006 YoY(%)

Vendor

WW Shipment

2005

Nokia Motorola Samsung SEMC LG

265 146 104 51 55

345 209 116 74 62

30.19% 43.15% 11.54% 45.10% 12.73%

(Unit: M)
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Top 5 Vendor ASP

1Q04 Nokia Motorola Samsung LG Sony Ericsson 145.9 161.3 196.7 152.9 190.1

2Q04 135.2 161.1 174.6 166.7 174.2

3Q04 131.1 167.9 174.3 167.7 191.6

4Q04 140.5 155.6 164.6 168.2 206.1

1Q05 145.6 153.8 182.1 165.1 180.0

2Q05 133.1 144.6 170.4 149.3 170.9

3Q05 125.3 144.7 158.4 143.7 181.5

4Q05 119.2 146.2 165.0 146.0 170.5

1Q06 125.1 138.8 155.0 121.0 180.1

2Q06 129.0 137.6 161.8 139.0 181.8

3Q06 119.4 130.8 152.1 135.2 187.3

4Q06 119.1 118.8 145.5 138.4 192.0

1Q07 118.7 119.2 130.4 143.4 177.7

Note: ASP (Average Sales Price) Source: MIC Data, May 2007

Whats the value of entry phone ??

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SEMC 07 Q2 financial result

Whats the value of entry phone ??

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Market competition

WW mobile phone shipment forecast (2004-2010)

Source: MIC June 2007

WW mobile phone shipment by product type

Smart cellular device grow fast!

Feature phone keeps main stream

Source: MIC June 2007

Top 5 Vendor - market share ranking

Top 5 vendors take lions share at 82%.
(Unit:%)
40.0%

Nokia

Motorola

Samsung 34.7%

SEMC 36.2%

LG 37.1% 36.50%

33.1%
35.0%

33.0%

32.1%
30.0%

25.0%

21.8%
20.0%

21.1%

21.5% 18.5% 14.40%

20.3% 17.7%

15.0%

12.5%
10.0%

12.8% 11.1%

12.0% 7.8% 6.5%

11.3% 9.0%

14.2% 8.9%

13.80% 9.60% 7.30%

6.7%
5.0%

6.9% 5.8%

6.6% 6.4%

6.2%
0.0%

6.3%

6.4%

2005

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07
Source : company data 9

Top five 07 new models launch schedule

Samsung name rule

C series :Classic and practical D series :Deluxe E series :Exclusive and Fashion P series :Premium and multimedia X series :New Generation and stylish Z series :WCDMA F series :Ultra Special I series :PDA SP U series :Ultra Edition II

Sony Ericsson name rule

K series :Camera W series :Multimedia Z series :Fashion clamshell P series :Enterprise T series: Design J/K series :Entry

LG model name rule

KE seriesNew generation and shining style KG seriesBlack label chocolate KU series3G chocolate family 07 May
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Street price range

(UNIT:USD$)

$500

F500(VIDEO)

F700

Pi K310 K810 W880

KE850(PRADA)

U700(12.1)

U300(9.6)

$400

U600(10.9) F300(MUSIC) M600 W580 U100(5.9) S500 K800

KE970(Shine) i600

$300
E900

KE820

KU800

D900
X830 Z610 W300 Z150 W950 KG800 KG600

$200

$100 $60
C140 J110/J120

Source: retail price from http:// www.phonesource-usa.com

K200/K220

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Good reference: Samsungs ambition

Handset shipment: 37.4 mn units (8% QoQ ,49% YoY) (cumulative sales of Ultra Edition :exceed 12 mn units)

Main drivers

More than 30 models with high-end camera and slim design

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Arimacomms insight

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Alliance with SEMC

Music

imaging

Entry

Design
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Not only assemble a phone, but more

Next product

Whats the spirit of ODM ?

1: Copy another Kxxx Wxxx even better 2: If Cybershot is state-ofart but proprietary >> Zeiss Optics/ Schneider

LG prada

Nokia N90

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Lifelong planning

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:
2007/08/07 - 01:19:20

Symbian Windows Mobile

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Convergence phone
Start to devoted to develop smartphone based on windows mobile OS

P series SP model

P1i feature

Launch date:2007 Q3(USD$692) Symbian OS 9.1 UIQ 3.0 platform WCDMAGSM 240x320 pixels 3.2 MP camera Touch screen No GPS/HSDPA/802.11g Wi-fi

Extend SP battle line

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SEMC product strategy assumption

Follow the market Lead the market

Suggestion
Leverage branding image & goodwill to expand product mix
High-end section: smart phone and multimedia phone

Smart phone function and quality, feature phone look

Low-end price, middle-end feature and quality

mid-end/low-end section: rich feature phone

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WW converged phone market outlook by volume

Unit: Million units
1,000 900 800 700 600 500 400 300 200 100 0 2004
2004 Smart phone PDA phone 25 6

Smart phone PDA phone YoY

PDA phone Feature phone YoY

Feature phone

Smart phone

YoY

100%

90%

80%

70%

60%

50%

40%

30%

20%

10% 0% 2005
2005 48 8

-10% 2006
2006 82 14

2007
2007 120 17

2008
2008 169 21

2009
2009 211 24

2010
2010 241 27

2011
2011 265 29

Feature phone
Total Smart phone PDA phone YoY YoY

598
629

739
795 87% 33% 24%

866
962 73% 73% 17%

915
1,052 45% 25% 6%

925
1,115 41% 21% 1%

935
1,171 25% 16% 1%

936
1,204 14% 10% 0%

938
1,232 10% 8% 0% 21

Feature phone YoY

Smartphone market share trends

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WW smart device shipment ratio breakdown by OS (%)

Blackberry OS Symbian 70% 60% 50% 40% 30% 20% 10% 0% 2003 2004

Linux Windows Mobile

Palm OS Others

15%

15%

17%

19%

2005

2006

2007E

2008E

2009E

Source: Morgan Stanley TaiwanMay 21, 2007

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Converged device snapshot

Nokia E90 MOTO Q9 Samsung i620 SEMC M600

Apple iphone

Nokia N95

Boundary is blurry!

North America

West Europe

APAC
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Slim is basic requirement

Clamshell

Bar type

Bar /Slide

sourceGSM ArenaMIC compile2007/06

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Convergence trend is popular

Alliance diversity

3G
WiMAX+T-DMB+VOIP+IMS

WCDMA

HSXPA

6110 Navigator

GPS
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ULC phone grow in emerging market

Emerging Market Handsets Plan (EMH

Mobile phone manufacturer attempt to replace basic phone

with middle and low-end feature Phone.

C series

1100 series

C series

J /K series

Asia and Africa market

China and India market

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WW mobile phone market: replacement ratio(%)

Source: MIC June 2007

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Sony Ericsson Walkman series- Let us play music!

2005
2006 2007

SE W800

SE W550

SE W810

SE W850

SE W880

SE W660

(9mm)

SE W900

SE W950

SE W700

SE W610

SE W580

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Product Position
Mobile phone considers a consumer-oriented merchandise nowadays SEMC leverages SONY consumer experience for walkman and cyber-shot brand image SEMC entry level phone should migrate the product image from walkman and cyber-shot phone (At least for ID image)

Marketing position on:

Low tier walkman or cyber-shot phone

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