Mobile Device Market Trends and Vendors

Overview of the Mobile Device
Market, Trends, and Vendors

Anna Kochalska
Fredrik Lundberg
Dhruv Varma
785403
February 2012
CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Contents
▪ Mobile handsets is 1.6bn unit, quarter trillion

$ market, where Asia makes up almost half
of the volumes, and profitability is good for
top vendors, driven by smartphone surge
▪ Key trends in the market are intensified OS

wars (Android, iOS, Windows), stronger
competition in high end, emerging
integration with other CE devices, and
growing low-cost (Chinese) vendors
▪ Handset vendor: Appendix

– Handset position and strategy overview
– Latest press clippings per vendor
– Group-level company overviews
McKinsey & Company | 1

The handset market has grown at a rapid pace over time and is today
1.6bn units at a wholesale value of more than $245bn
WW mobile device market
Mn units
3G WCDMA launched Financial crisis 1,793 1,829

in several countries (in 1,699
addition to Japan) 1,535
1,151 1,190
837
532
2003 2005 2007 2009 2011 2013 2015 2016

WW mobile device market
$ bn
238 245 245 246
164 161
125
91
2003 2005 2007 2009 2011 2013 2015 2016
SOURCE: Strategy Analytics, November 2011 McKinsey & Company | 2

The smartphone segment is significantly outpacing growth of the
overall market
WW handset market sales
Mn units, %
iPhone launch
100% = 532 680 837 997 1,151 1,197 1,190 1,355 1,535 1,630 1,699 1,750 1,793 1,829
Smartphone 3 4 6 8 10 12 14
21
31
38 38
Feature Phone 44
49 52 54
51
63
70
72 67 65
59
48
42
38
37
Basic Phone 60 37
37
45
30
22 18 20 20 20 20 20 18 14 12 9
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
SOURCE: Strategy Analytics, 2011 McKinsey & Company | 3

Asia-Pacific is by far the largest market for handsets, and developed
markets’ shares decline
WW handset market volume share per region
Mn units, %
100% = 532 680 837 997 1,151 1,197 1,190 1,355 1,535 1,630 1,699 1,750 1,793 1,829
Central & Eastern Europe 6 9 10 8 8 8 7 7 7 7 7 6 6 6
12 12 12 11 11 11
15 14 14 13
Western Europe 23 17
21 19
13 12 12 12 11
13
14 15 14
14
16
13 13 12 12
North America 20 19 17 13 13
12 10 12
11
12 12 12 13
11 12 12
Central & Latin America 7 12 11 11
10 11 12
Africa & Middle East 6 10
7 9
43 43 44 44 45 45 46 46
Asia Pacific 38 38 41 41
34 33
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Price tier distribution of handset is expected to be fairly stable going
forward with a spread from true low end to superphones*
WW handset market volume share per price tier
Mn units, %
100% = 532 680 837 997 1,151 1,197 1,190 1,355 1,535 1,630 1,699 1,750 1,793 1,829
0 0 1 2
Ultra-Low (US$35 and below) 7
12 15 16
20 21 21 21 21 21
Entry (US$36 - 99) 47 50 53 52

48
43 38
42 35 32 30 31 31
36
Mid (US$100 - 190) 26 22 21

20 20 16 14 19 21 22
19 19 19 17
12 14 14
14 13 13 14 14 14
High (US$191 - 299) 19 20 18 17 16
18 16 15 14
9 10 11 13 13 13 12
Premium (US$300 and above) 8 8 9
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
* Upper end of smartphone spectrum with large screens, high spec processors, etc.
SOURCE: Strategy Analytics, November 2011
Industry ASP has increased slightly, driven by smartphone surge
Handset wholesale ASP per vendor

$
650
Apple
600
550
500
▪ Smartphone pure
450 players (notably
Apple) naturally
400 come out with high
ASPs
350 HTC
▪ Sony Ericsson has
300 a high ASP due to
RIM
smartphone skew
250
Sony Ericsson and high-end
200 products
Total Industry
150
Samsung
100 LG
Nokia
50
2007 2008 2009 2010 2011

In the overall handset market, Nokia is still in the lead, but dramatic
changes in market shares have given room for new vendors
Global handset market share
%
42 8,0
40
7,5
38
36 7,0
34 6,5
32
6,0
30
28 5,5
Nokia LG
26
5,0
24 ZTE
Samsung 4,5
22 Apple
20 4,0 Huawei
18
3,5 HTC
16
RIM
14 3,0
12 Motorola
2,5
10 Alcatel-TCL
8 2,0 Sony Ericsson
6 1,5
4
1,0
2
0 0,5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q110 Q210 Q310 Q410 Q111 Q211 Q311
2008 2009 2010 2011
SOURCE: Strategy Analytics 2011 McKinsey & Company | 7
In the important smartphone segment, the usual suspects appear, now
with Samsung in the lead
Global smartphone volume market share
%
44 ”Apple customers waited for the delayed

42 4GS launch, hitting Apple market share”
40
38
36
34
28
26
24 Samsung
22
20
18
16 Apple
14
Nokia
12
HTC
10
RIM
8
6 Sony Ericsson
4 Motorola
2
0
Q1 ’08 Q2 ’08 Q3 ’08 Q4 ’08 Q1 ’09 Q2 ’09 Q3 ’09 Q4 ’09 Q1 ’10 Q2 ’10 Q3 ’10 Q3 ’10 Q1 ’11 Q2 ’11 Q3 ’11
SOURCE: Strategy Analytics October 2011 McKinsey & Company | 8

Overall, the handset industry has shown good profitability, with about
$15bn-$20bn in operating profit pool annually
Total handset industry operating profit Total handset industry operating margin
$ mn, per quarter %, per quarter
10.000 15
9.500
9.000
8.500
8.000 7,661 7,611 10
7,403
7.500
7.000 6,805
6.500
6.000 5,843 5
5.500 5,064
5.000 4,707 4,601
4.500 4,234 4,275 4,289
4.000 3,861 0
3,646
3.500
3.000 2,729
2.500 2,138
2.000 -5
1.500
1.000
500
0 -10
Q1’08 Q2’08 Q3’08 Q4’08 Q1’09 Q2’09 Q3’09 Q4’09 Q1’10 Q2’10 Q3’10 Q410 Q1’11 Q2’11 Q3’11
* i.e., only including the handset operations of the companies
Profitability varies widely throughout top vendors, and key smartphone
OEMs create most of the value
Handset operating margin*
%
40
35 ▪ Apple stands out

Apple as
30
overwhelmingly
25 profitable
20 ▪ Operating
Samsung margins around
15 HTC 15% have been
sustained by
10 RIM successful
5 Nokia vendors
Sony Ericsson
0 ▪ Niche
smartphone
-5 LG vendors (HTC,
Apple, RIM)
-10 together with
-15 Samsung grab
large share of
-20 industry profits
-25
2007 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2008 2009 2010 2011
* i.e., only including the handset operations of the companies

Contents



Key trends in the market are intensified OS wars, stronger competition in
high end, and emerging integration with other CE devices
Comments
▪ iOS and Android are the current key OSs, after

Symbian (being abandoned by Nokia) left the throne
OS/ecosystem
wars, wave 2
▪ Windows Phone accelerating with a join push from
Nokia and Microsoft, trying to catch up with Android and
iOS / iPhone
▪ Large amounts of super high end phones coming into

Intensified the market, in order to differentiate OEMs
competition in ▪ LTE handsets are currently coming into the market with
super high end strong push from key vendors (HTC, Samsung etc)
▪ Several vendors (Sony / Sony Ericsson1, Apple,

Smartphone Samsung etc) are pushing smartphone integration with
integration with home entertainment
other CE ▪ “New” technologies including e.g. DLNA, HDMI etc are
devices used to enabled seamless interaction and more is to
come
▪ Chinese ZTE, Huawei and TCL-Alcatel have doubled
handset market share over the last 24 months and almost
Low-cost tripled volumes
vendors attack ▪ Fast growing small vendors e.g. Micromax from India are
coming onto the radar
▪ These vendors put pressure on cost also in smartphones
1 Sony acquired Ericsson’s 50% share in Sony Ericsson and the company is now fully owned by Sony
SOURCE: Team McKinsey & Company | 12

Android and the Apple iOS/iPhone are the key winners in the smartphone
battle so far, awaiting Nokia’s strike back with Windows Phone
WW smartphone share by OS
Mn units, %
100% = 36 42 43 54 55 62 81 101 103 111 120

Others
8 6 5 4
3
3 3 4
2
3
2
3 ▪ Android and iPhone
10 9 4 3 3 Microsoft
6 with iOS are the key
7 10 Blackberry OS
8 11 winners so far in the
10 15 14 13
12 18 smartphone battle
19 14 Apple iOS
20
20 18 ▪ Symbian’s
19 17 16 18 dominance has
20 13 dramatically
15 Symbian
16 disappeared, with
16
13 17 17 Nokia’s smartphone
11 failure (so far)
31 26
37 ▪ Nokia is now betting
43 big on Windows
Phone (after
43
43 56 abandoning
Android
45 47 44 48 Symbian), and came
out with Lumia 800/
32 36
710 in Q4 2011,
25 followed by 900 w.
18 LTE on CES 2012
8 11
2 3 3
Q1 ’09 Q2’09 Q3’09 Q4’09 Q1 ’10 Q2 ’10 Q3 ’10 Q4’10 Q1 ’11 Q2 ’11 Q3 ’11
SOURCE: Strategy Analytics, NovEMBER 2011 McKinsey & Company | 13

After the launch of the first Windows Phone 7.5 phones (Lumia 710/800),
the market will see a lot more from Nokia and Microsoft 2012
Comments
 US version of Lumia 800 with

LTE, 4.3” AMOLED display „It is the biggest and fastest smartphone yet.
launched at CES, Jan 2012 And it will become available exclusively
Nokia Lumia
 8mp camera with a 28mm through AT&T in March.”
900
f/2.2 Carl Zeiss lens and
dual-LED flash Nokia Developer Newsletter
„For the mainland Chinese market, Nokia will

 Focus on developing countries (such as launch a wide range of WinPhone devices
China and India) which had been traditionally during the first half of 2012. These devices
WinPhone neglected in the past will support China Mobile and China Unicom’s
‘Tango’  Manufacturers will be able to sell cheaper TD-SCDMA network, as well as China
devices in these developing countries pre- Telecom’s CDMA network.”
loaded with Windows Phone “Tango”
Colin Giles, Nokia VP
 Apollo is said to be a codename for WinPhone 8

– next major update „It’ll (WinPhone Apollo) launch in mid-2012 and
WinPhone be a „very different game” to Mango.”
 Addition of near-field communications support
‘Apollo’
and „positioning framework’
Michael Halbherr, Nokia VP
SOURCE: Press clippings McKinsey & Company | 14

Most analysts expect Nokia’s new smartphones to gain traction in the
market; however, concerns exist about apps/resistance to switch platforms
Microsoft global smartphones sales and share

Mn units, %
„By 2012, WinPhones will be able to grow its

market share to 11% and by 2015 it will
176 become the second biggest smartphone OS in
+59% pa the world with 20% market share, behind
150
Android and ahead of iOS.”
121
IDC
90
18%
16% “By 2015, WinPhone 7 could have an 18%
48 14% market share - with 90% of that coming from
12% Nokia.”
17 8%
4%
Carolina Milanese, Gartner
2011 12 13 14 15 2016
Concerns
“The biggest problem with the Nokia Lumia 800 is
“Nokia will have a challenge to convince them (customers the lack of applications for the WinPhone
which moved to iPhone and Android phones) to switch to operating system. It's getting better all the time,
what is a largely unknown, and therefore risky alternative” granted, but it's still not a patch on Android or iOS.
”
Nick Dillon, OVUM The Gadget Show
SOURCE: Strategy Analytics; press search McKinsey & Company | 15

Large amount of high-end smartphones were presented at CES EXAMPLES
2012, trying to differentiate on e.g., screens, slimness, multimedia

Samsung Motorola
Galaxy Note Droid RAZR MAXX
▪ hybrid mix of smartphone, ▪ 8.99 mm thin
tablet, and notepad, ▪ LTE
▪ 5.3” display ▪ 8 Mpxl camera
▪ Pressure sensitive stylus- ▪ DLNA
enabled writing and drawing Droid 4
software ▪ LTE
E.g. released 3 LTE ▪ QWERTY
smartphones at AT&T: Galaxy ▪ 4”qHD screen
Note, Galaxy S II Skyrocket HD ▪ Splash resistant
(4.65”), and Exhilarate
(ecofriendly LTE-”massmarket”
phone)
Sony Huawei
Xperia ion Ascend P1/P1S
▪ LTE Android superphone ▪ ultra-slim (6.8mm)
▪ 4.6” Reality Bravia display ▪ 1.5GHz dual-core
▪ 12 mpxl camera ▪ latest Android 4.0 ICS
▪ HD video and DLNA HDMI ▪ 4.3” superAMOLED
sharing
Xperia S HTC
▪ Android superphone TITAN II
▪ HD video and DLNA HDMI ▪ LTE
sharing
▪ 1.4 GHz processor ▪ Windows Phone 7.5
▪ Mobile Bravia display engine ▪ 4.7” screen
4.3”
▪ 16 mpxl camera
SOURCE: Vendor websites; Press clippings; Strategy Analytics; IDC McKinsey & Company | 16
Key handset and CE vendors are making moves to integrate smartphones
with the wider entertainment systems and electronics’ devices
Company Examples Comments from CES 2012

▪ Sony has shown an explicit vision to
integrate devices, content and services to Consumers will want to have the best
entertain consumers screen at every point in time, and
▪ Sony e.g. announced PlayMemories cloud seamlessly access their content, apps etc
service, synching content between devices on every device of choice
▪ Apple is over time creating more Industry Expert

integration between devices, e.g. with
iCloud synch service and Airplay, Various enabling technology standards
streaming video, audio etc wirelessly and cloud solutions are emerging to
between devices connect all these devices either through
▪ Airplay also bringing non Apple TVs, and a wired or wireless connection
audio systems into play
▪ Samsung uses this years Free the TV Strategy Analytics
Challenge to create converged apps that
enable interactivity between Samsung
Smart TV and multiple screens such as Newer standards such as WirelessDisplay
smartphones, tablets or notebooks, with a (WiDi), WirelessHD, WiFi Direct, WiGig,
prize pool of US$225,000 Wireless Home Digital Interface (WHDI)
▪ Samsung started to use smartphones as leveraging the WiFi standard are emerging.
remote control These new standards will address the need
▪ Samsung AllShare feature (DLNA – based) for sharing, streaming the growing high
allows sharing of content between PC, definition heavy duty audio/video content
smartphone, TVs etc across devices wirelessly.
SOURCE: Company websites; Press clippings; Interview; Strategy Analytics McKinsey & Company | 17
Sony pushes integration of smartphones with wider
entertainment offering, leveraging both device and content portfolio BACKUP
Sony launched “PlayMemories” at CES 2012

▪ Enables users to enjoy high quality videos and
photos on a variety of devices including TVs,
PCs, tablets, and smartphones.
▪ With a single account, users can enjoy this
service as well as video and digital music
services which are offered on the Sony
Entertainment Network
▪ Comes in 4 versions
– Online (free, cloud based)
– Home (bundled with imaging products, with editing and Sony is pushing ahead
sharing) with device, content, and
– Studio (premium paid version, for advanced editing on service integration in its
the Playstation platform) consumer electronics
– Mobile (free at Android Market and Apple Appstore) offering, aiming to
leverage broad portfolio
and content assets to
Sony has a vision for more integration make them unique
“When these products are combined with “Through this

Sony Entertainment Network convergence of
(SEN) which offers innovative services hardware, content
Kazuo
like Music Unlimited and Video Unlimited, and network
Hirai, Sony
as well as PlayStation Network, the user services, Sony is
at CES
experience is truly unmatched and only offering a new
2012
made possible by a company like Sony.” user experience. .”
SOURCE: Sony website; Press clippings McKinsey & Company | 18

Apple is integrating its consumer devices with each other and the
wider home entertainment system BACKUP
Apple iCloud announced October 2011
▪ iCloud is a synch service,

seamlessly transferring data
between devices (Macbook,
iPhone, Pad etc and even PC)
▪ iTunes, Photos, Documents,
Calendar, Mail, Contact etc can be
synchronized
▪ 5GB for free, more available at Apple has a strong
premium ecosystem, pushing
integration both from
content side (iTunes, etc.),
and devices with a “use
best device available at
Airplay any point in time” mind-set
▪ Apple launched a feature enabling wirelessly
streaming of HD video, pictures, called
Airplay
▪ The streaming can be done to Apples TV box,
alt to AirPlay Express, a small version for
streaming of music to speaker systems
▪ The feature enables very easy sharing of
content as well as mirroring the screen of an
iPhone on a large TV, e.g. for gaming
▪ Apple’s rumored full TV would further
enhance integration
SOURCE: Press clippings, Apple website McKinsey & Company | 19

Key China-based handset vendors have doubled market share in 24
months, and almost tripled volumes
Handset volumes sold per quartet ww
Mn units
43 44
39
9 10
33 10 32 Comments
6 27 During the last 2.5 years
25 7
14 14 the companies climbed
7 11 from at the WW market
20 8
17 17 13 9 share ranking:
6 7 ▪ ZTE #6 -> #4
Alcatel-TCL 2 4
7
Huawei 6 6 6 ▪ Huawei #8-> #6
14
18 15
20 19 ▪ Alcatel TCL #12 -> #10
13
ZTE 8 8 9 11
China vendors leverage
low cost R&D, as well as
WW handset market share per quartet ww low cost platforms (e.g.
% Mediatek)
12
11
10 10 3 Typically “plain” models
9 3 are used, i.e. limited
2 8 8 2
7 2 Android customization on
6 6 2 4
2 4 smartphones etc
Alcatel-TCL 1 4 2 3 3
1 2
Huawei 2 2 2
2
4 4 5 5
3 4 3 3 4
ZTE 3
Q209 Q3 Q4 Q110 Q2 Q3 Q4 Q111 Q2 Q3
SOURCE: Strategy Analytics 2011; Press clippings; McKinsey McKinsey & Company | 20
Below the large handsets’ vendors, there is a long tail of fast growing
companies, possibly tomorrow’s disruptors
Market share gains
Handset shipments in Q3 2011 Year-over-year growth
Mn units % Country
Micromax 4,1 37,0 India
Kyocera Sanyo 3,0 45,0 Japan
Lenovo 2,8 33,0 China
Pantech 2,7 23,0 South Korea

Coolpad 2,7 123,0 China
Tianyu 2,1 24,0 China
Sharp 2,0 0 Japan
Maxx Mobile 1,7 31,0 India
Spice 1,6 -11,0 India
Fujitsu 1,2 -15,0 Japan
Haier 1,2 46,0 China
NEC-Casio.Hitatchi 1,2 5,0 Japan
Videocon 1,0 11,0 India
Hisense 0,9 50,0 China
Lava Mobiles 0,9 200,0 India
Industry growth 15%
SOURCE: Strategy Analytics; Company websites McKinsey & Company | 21

Chinese vendors put price/cost pressure on smartphones, and drive
growth in the entry segment
Global smartphone shipments by price tier
Mn units, %
100% = 26 81 146 286 624 849 985 Already emerging vendors such as
China’s ZTE are pushing Android
prices to the very bottom, … and we
iPhone 21 Premium (>US$300) expect many other vendors to follow
effect
26
37 39
42
53 50 Strategy Analytics, Dec
23 High (US$191-299) 2011
23
Initial volumes [below USD 100] are
largely limited to Chinese vendors like
Huawei and minor brands.
31
29 Mid (US$100-190)
Windows Phone Tango will enable even
31 32 more low cost alternatives
61
54
40
Industry Expert
26
27 Entry (US$36-99) Microsoft is targeting most-price
19 19 sensitive customers with Tango
6 (version of WP7 after Mango) as it is
5
0 3 0 4 0 0 looking at providing devices with 'the
best prices'
2004 2006 2008 2010 2012 2014 2016
EFYTimes, Dec 2011
SOURCE: Strategy Analytics; Press clippings; Interviews; McKinsey McKinsey & Company | 22
Contents



Handset OEM positions and strategies (1/2)
Position and strategy
▪ Nokia is WW#1 who suffered a lot in smartphones due to “outdated Symbian OS”
▪ Big bet on Windows Phone with MSFT is going to bring them back on the smartphone
Nokia
race, including Nokia specific navigation and music services built into the phones
▪ Nokia still very successful in basic devices
▪ Samsung is the agile #2 who had tremendous success with smartphones, now aiming #1
▪ Fast to market, e.g. worlds first LTE, 8Mpxl+ camera phone etc, leveraging e.g. inhouse
Samsung technology innovations, and strong design
▪ Starting to move toward integration with its wider CE offering, e.g. using smartphone as
companion / remote control to TV
▪ Coming from a successful, Samsung like story, however relying a bit too much on feature
phones where they are now under strong pressure from e.g. TCL-Alcatel, Hauwei and ZTE
LG
▪ Betting on fast to market e.g. first WW with dual core processor in Optimus smartphone,,
3D, bright and clear displays, and 4G LTE, using both WinPhone and Android
▪ Chinese low cost vendor

▪ Moving upward from tier-2 carriers to tier-1 carriers.
ZTE
▪ Launched its first Windows Phone handset, ZTE Tania, across Europe
▪ Announced upcoming LTE push for 2012 at CES in Jan
▪ Entered handset business in 2007, and now the most profitable vendor with its one phone,
the iPhone in the market
Apple
▪ Leveraging its ecosystem (managed end to end) with iTunes, iPhones, iPads etc launching
iconic devices at premium price, with strong marketing capabilities
Note: Ranked by market share

SOURCE: Press clippings; Strategy Analytics; Vendor websites; McKinsey analysis
Handset OEM positions and strategies (2/2)
Position and strategy
▪ Low cost Chinese vendor with very strong low end offering complemented by a play in
smartphones (plain, but at low cost). Wide infrastructure offering
Huawei
▪ Coming from emerging market focus and now have made inroads in developed markets
▪ Announced LTE push with the Ascend P1S phone at CES complemented by LTE dongles
▪ Smartphone pureplay vendor

HTC
▪ Strong smartphone track record, notably on Android, now also with Windows 7.5 phone in
the market
▪ Made acquisitions into online music store, cloud based synch, and kids related tech
▪ Traditionally email centric full QWERTY devices, with very strong tracke record in
business, trying to move more and more into consumer segment
RIM ▪ Reinventing itself with OS upgrade, offering e.g. touch (full or combined w. QWERTY)
▪ Challenges with its own OS, given the lack of application to compete with Android or iOS,
pushing to get around that, possibly by piggybacking on Android market
▪ Chinese low cost vendor (after acquisition of Alcatel handset business) with recent
success in Latin America
Alcatel TCL
▪ Plans to extend this success into North America with a flurry of low-priced Android
smartphones and feature-rich handsets positioned for pre-paid consumers.
Sony ▪ Android smartphone focused (nowadays) with key strengths in cameras and high end
(formerly multimedia, leveraging Bravia, Playstation etc from Sony, e.g. in new flagship Xperia S with
Sony HD, 12 Mpxl camera.
Ericsson) ▪ Making moves into widening the use of the smartphones to leverage Sony’s assets in
consumer electronics and content, offering e.g. users Sony Entertainment Network services
Note: Ranked by market share

SOURCE: Press clippings; Strategy Analytics; Vendor websites; McKinsey analysis
Latest press on: Nokia
Strategy, structural changes, and regional expansion Product launches and innovations (Focus on mobile handsets)
▪ 12/2011: Nokia delisted from Frankfurt Stock Exchange ▪ 01/2012: Nokia and AT&T announced new Lumia 900 at CES – first Nokia's
▪ 11/2011: Nokia Siemens Networks announced strategy to focus on mobile Windows® Phone-based range to feature high-speed LTE connectivity.
broadband (incl. optical), customer experience management and services. ▪ 12/2011: Nokia Lumia 710 starts selling in Taiwan alongside the Nokia Lumia
Business areas not consistent with the new strategy are planned to be divested 800 and continue its global roll-out over the coming weeks.
or managed for value. ▪ 10/2011: Launch of phone-base Lumia range at Nokia World event: Lumia 800
▪ 11/2011: Initiation of restructuring program incl. operating expense and and 710. Furthermore launch of the Nokia Asha 300, 303, 200 and 201 blur the
production overhead savings and workforce reduction of ~17,000. line between smartphones and feature phones, offering QWERTY and touch
▪ 09/2011: Announcement of next phase of operational alignment, which includes screen experiences, combined with fast and easy access to the Internet,
plans for reductions in manufacturing, the Location & Commerce business, and integrated social networking, messaging and world-class applications from the
supporting functions. Nokia Store.
▪ 04/2011: Nokia announced plans to align its global workforce and consolidate ▪ 10/2011: Launch of Nokia Symbian Belle Smartphone 603.
site operations. These measures are part of Nokia's target to reduce its Devices ▪ 09/2011: Nokia announced Nokia Car Mode at IAA Frankfurt, a standalone
& Services non-IFRS operating expenses by 1 billion euros for the full year application optimized for the in-car use of Nokia smartphones.
2013 in comparison to the full year 2010. Furthermore alignment of R&D ▪ 08/2011: Launch of the Nokia 101 and Nokia 100 phones.
operations is planned. ▪ 08/2011: Launch of three feature-packed, mass market smartphones: Nokia
▪ 03/2011: Plan to establish a new manufacturing site in Vietnam. 700, 701 and 600 introducing latest Symbian software update.
▪ 02/2011: Outlining of new strategy incl. focused investments in next-generation ▪ 06/2011: Launch of three new affordable phones - the Nokia C2-02, Nokia C2-
disruptive technologies, new leadership team and operational structure. New 03 and Nokia C2-06 with dual and single options and choice of touch screen or
structure with two business units: Smart Devices and Mobile Phones focusing keypad.
on Nokia's key business areas: high-end smartphones and mass-market mobile ▪ 06/2011: Launch of N9 – an all-screen smartphone.
phones. ▪ 05/2011: Announcement of new Ovi Store operator app store concept for
France's Orange and Deutsche Telekom.
▪ 04/2011: Launch of Nokia E6 and Nokia X7, two new smartphones.
M&A and cooperations
Miscellaneous
▪ 01/2012: De' Longhi to acquire Nokia's production facility in Cluj, Romania.
Acquisition is subject to approvals by the relevant authorities. ▪ 01/2012: Marko Ahtisaari has been appointed EVP, Design, and a member of
▪ 09/2011: Completion of transaction to outsource its Symbian software the Nokia Leadership Team.
development and support activities to Accenture. ~2,300 employees will be ▪ 09/2011: Appointment of Jesper Ovesen as Executive Chairman of the Board
transferred to Accenture. of Nokia Siemens Networks.
▪ 08/2011: Nokia plans to collaborate with Vision+, an independently-run ▪ 09/2011: Henry Tirri has been appointed EVP, Chief Technology Officer and a
investment fund, focused on financing innovative products. member of the Nokia Leadership Team.
▪ 06/2011: Nokia enters into patent license agreement with Apple. ▪ 08/2011: Tero Ojanperä, EVP and a member of the Nokia Leadership Team,
▪ 04/2011: Nokia Siemens Networks has completed its acquisition of Motorola will leave Nokia on September 30, 2011.
Solutions' Networks assets. ▪ 06/2011: Michael Halbherr has been appointed EVP to spearhead Nokia's
▪ 04/2011: Signing of a definitive agreement on a partnership with Microsoft that revised mission in mobile and location-based services.
will result in a new global mobile ecosystem. ▪ 03/2011: Nokia filed complaint alleging that Apple infringes Nokia patents.
SOURCE: Company press releases McKinsey & Company | 26

Latest press on: Samsung Electronics
Strategy, structural changes, and key personnel changes Product and market launches
▪ 01/2012: Announces it aims to replace Japanese companies as global ▪ 02/2012: Announced presentation of Galaxy SIII will be postponed from
tech. pacesetter, not only in phones/TVs but also other diversified fields. 02/2012 to ~06/2012, closer to mid-year planned market launch.
▪ 01/2012: Announces plans to re-enter Japanese TV market. ▪ 01/2012: Launches Galaxy series flagship models (incl. Note) in Russia
▪ 12/2011: Restructures organization, dividing it into two separate units: ▪ 11/2012: Launces Galaxy W.
digital media/communications and independent device solutions. ▪ 11/2011: Launches Galaxy Note in Korea.
▪ 11/2011: Announces top management changes, e.g. smartphone ▪ 10/2011: Unveils Galaxy Nexus. Launch date delayed by 2 weeks in
development officer promoted to President. respect of Apple CEO Steve Jobs’ death.
▪ 2011: Announces handset strategy to market iconic products with smart ▪ Q 4 2011: Announces planned launches of high-end models such as
features, aiming to become no 1 smartphone player (achieved 10/2011). Galaxy SII LTE/Note/Nexus and expansion of mass market smartphone
▪ 09/2011: Chris Bangle, former BMW design chief discusses lineup as priorities. Current 2011 flagship models: Premium segment -
partnership. Galaxy Note/Nexus, Omnia W; Mass-market segment Galaxy Y Pro / Y;
▪ 06/2011: Claims that Greater China is strategic priority for business and Wave M.
company is investing heavily on advertising, retail partnership etc. ▪ 09/2011: Unveils 2 4G smartphones.
▪ 05/2011: Denies reports of plans to abandon solar batteries business.
▪ 05/2011: Hires new legal counsel, Cho Jun-hyung.
▪ 2009: Announces vision 2020: achieve revenues 400 USD mn and join
ranks of top 5 brands by 2020.
M&A and cooperation Investments, operations, and miscellaneous
▪ 01/2012: Samsung denies rumors it may be interested in RIM takeover. ▪ 2011/2012 (ongoing): Apple and Samsung are involved in strategic
patent fight over tablets and smart phones worldwide, which provokes
▪ 12/2011: Sony leaves Samsung joint venture on LCDTV displays.
law suits and some sales bans, e.g. for Samsung tablets in the EU.
▪ 12/2011: Samsung Electronics reportedly to merge with Samsung LED.
▪ 11/2011: Samsung Electronics-Qualcomm alliance is strengthening. ▪ 02/2012: Samsung group announces heavy investment plans (USD 41
bn, estimated 21 thereof in Samsung Electronics) and 26,000 new jobs.
Samsung will use Qualcomm in Galaxy Note.
▪ 11/2011: Announces plans to be more active in M&A activities. ▪ 01/2012: Samsung, LG fined for fixing home appliance prices in Korea.
Reportedly Samsung Electronics is eyeing more than 20 companies as
▪ 01/2012: Authority approval for new tablet/handset chip factory in
China.
acquisition targets in areas ranging from healthcare to non-memory.
▪ 11/2011: Acquires U.S. based healthcare equipment maker Nexus. ▪ 2011: World brand report posts 20% brand value gain for Samsung.
▪ 09/2011: Microsoft and Samsung Electronics have agreed to cross- ▪ 2011: Samsung overtakes Apple in smartphone shipments (~300 mn).
license each other's patent portfolios, with Microsoft getting royalties for
▪ 11/2011: Invests 16 tril won in operational facilities, 7.5 tril won in R&D.
the mobile phones and tablets Samsung sells that run the Android
▪ 11/2011: Google and Samsung confirm that Galaxy Nexus, has
problems with fluctuating volume due to faulty software.
operating system.
▪ 06/2011: Enters Japanese LTE market as supplier to KDDI.
SOURCE: Annual report; Earnings presentations; Message of Chairman; Press McKinsey & Company | 27
Latest press on: LG Electronics
▪ 12/2011: LG increases its investment in India in 2012 by 20% on-year to Rs 18 ▪ 01/2012: LG launches 4 mobile devices, including a smartphone with 5-inch
billion to expand production and marketing. screen, by the first half of 2012.
▪ 12/2011: LG invests USD500 million to establish a new factory for home ▪ 11/2011: LG launches Jil Sander phone in collaboration with fashion brand Jil
appliances in Bangladesh . Sander and Microsoft.
▪ 10/2011: LG opened a new production line for home appliances in Wroclaw, ▪ 11/2011: LG-Box partnership offers 50GB of free cloud storage via Box for
Poland. Android on all LG Android mobile devices.
▪ 09/2011: LG combines its Beijing-based R&D center with two Shandong ▪ 10/2011: LG introduces Optimus LTE in Germany.
Province-based handset production plants. ▪ 10/2011: Mobitel introduces the first LG 3D Smartphone in Sri Lanka .
▪ 09/2011: LG plans to be top player in the field of 3D television by 2012. ▪ 10/2011: LG launches mobile phone handsets in India.
▪ 08/2011: LG drops production of CRT television sets in Brazil. ▪ 09/2011: LG will launch the Optimus Q2 smartphone in South Korea.
▪ 03/2011: LG sets up LCD TV production line in Shenyang. ▪ 09/2011: DTS and LG launch a 3D Smartphone featuring tri-dual architecture.
▪ 02/2011: LG sets up its own call center in Brazil to be closer to the customer. ▪ 08/2011: LG plans to launch 3D handsets in Taiwan in August.
▪ 02/2011: LG sets up to plants in Manaus, Brazil, to manufacture air ▪ 07/2011: GCT Semiconductor partners with LG to develop a monolithic LTE
conditioners and LCDs. single-chip that enables LG's new smartphone, named "Revolution by LG“.
▪ 12/2010: LG builds a new home appliance plant in Paulina, Brazil. ▪ 05/2011: LG, in collaboration with augmented reality (AR) pioneer Wikitude,
▪ 07/2010: LG plans to expand its Argentinian production of LCD televisions, announced the adoption of the world's first three dimensional AR browser on its
mobile-phones, air-conditioning units and washing-machines via its local upcoming LG Optimus 3D smartphone.
partners. ▪ 03/2011: T-Mobile USA Inc. in partnership with LG Electronics Inc. announced
today the new T-Mobile G2X smartphone " also known as the LG Optimus 2X in
the rest of the world.
M&A and cooperation ▪ 11/2010: Microsoft and LG Electronics have partnered to jointly subsidize a
portfolio of free WP7 apps.
▪ 12/2011: LG partners with Cambodian Cellcard on smartphone sales. ▪ 12/2010: LG introduces a dual-core smartphone.
▪ 11/2011: LG agreed with Prada SpA to extend their exclusive partnership and ▪ 11/2010: LG launches the P250 handset supporting two Sims in the Ukraine.
release a new high-end smartphone early next year. ▪ 11/2010: LG releases new mobile phone for women.
▪ 10/2011: LG develops a strategic partnership with McAfee to offer ▪ 10/2010: LG releases the 3.2-inch Optimus One in Europe and America.
comprehensive security solutions for its smartphones and tablets. ▪ 08/2010: LG launches its LG T320 handset in Lithuania.
▪ 10/2011: LG expands its partnerships with leading solution vendors.
▪ 07/2011: LG and Hitachi Plant Technologies established a JV in water Miscellaneous
business.
▪ 04/2011: ARM today announced a new licensing agreement with LG to Drive ▪ 11/2011: LG launched a 'Care and Delight Mobile Service' bus, a mobile after-
platform strategy in home and mobile markets. sales service facility to boost customer services across the sultanate of Muscat.
▪ 03/2011: LG plans to form a business tie-up with Suning Appliances to sell ▪ 08/2011: LG Optimus Black (the world's slimmest and lightest Android-powered
products worth SKW 5.1 trillion (USD 4.6 billion) in China over the next 3 Smartphone) creates art with Keith Haring.
years.
▪ 07/2010: Uzeltehprom and LG signed a cooperation agreement to expand the
Sino company‘s household appliances production capacity.
SOURCE: Press; Company press releases McKinsey & Company | 28

Latest press on: Apple
Strategy, structural changes, and key personnel changes Product and market launches
▪ 02/2012: Apple hires John Bowett as senior vice president for retail. He ▪ 01/2012: iPhone 4S market launch in China and 21 additional countries
will supervise international expansion of Apple stores (40 openings mostly in Africa, Latin America and Caribbean.
planned in 2012, three quarters thereof outside of the U.S.) ▪ 11/2011: iPhone 4S market launch in Hong Kong, South Korea, 13
▪ 01/2012: Apple points out that it is winning customers especially in the further countries.
enterprise segment (especially with iPad tablets, but also with iPhones). ▪ 10/2011: iPhone 4S initial product launch in US, Australia, Canada,
▪ 12/2011: Strategy Analytics report: Apple continues to draw attention France, Germany, Japan and UK. New product version features Sire
from app developers, while Android is holding steady. voice activated technology. Stock market disappointment because
▪ 11/2011: Arthur D Levinson appointed non-executive Chairman of iPhone 5 launch had been expected.
Board ▪ 05/2011: Apple iWork launched for iPhone and iPod touch users.
▪ 10/2011: Steve Jobs passes away. ▪ 04/2011: White iPhone launched, belated due to contract manufacturer
▪ 10/2011: iPhone 4S launch receives tepid reception. Analysts point out difficulties.
that Apple needs change in strategy without the charismatic sales skills ▪ 10/2010: iPhone 4 market launch in China.
of Steve Jobs. Apple is heavily depending on single “hero” devices in ▪ 07/2010: iPhone 4 market launch in 17 further countries.
two major product lines iPhone and iPad with annual release cycle. Still, ▪ 06/2010: iPhone 4 product launch, then launch in 9 further countries.
major strategy changes are not expected by Tim Cook. Initial supply problems, especially with white iPhone.
▪ 08/2011: Steve Jobs resigns as Apple CEO due to health reasons. Tim
Cook, previously COO, named CEO, Jobs elected Chairman of the
Board. Cook announces that he will pursue the same strategy as Jobs. Miscellaneous
▪ 01/2011: As part of its strategy to be an innovation leader, Apple invests
in delivery of third-party content in the iTunes store (and App store). ▪ 2011/2012 (ongoing): Apple and Samsung are involved in strategic
patent fight over tablets and smart phones worldwide, which provokes
law suits and some sales bans, e.g. for Samsung tables in the EU 2011
M&A and cooperation ▪ 01/2012: Tumults occur in Apple stores in China when flagship store in
Beijing failed to open on launch day. Frustrated customers demolished
▪ 01/2011: Apple confirms it took over Israel-based flash memory storage the store. Apple temporarily suspends 4S sales in mainland China.
developer start-up Anobit Ltd for estimated 400-500 mn USD. ▪ 01/2012: Apple posts record quarterly revenue of USD 46.33 billion and
▪ 10/2011: Analysts estimate that even after Steve Jobs’ death, Apple’s record net profit of USD 13.06 billion for Q 1/2012 ending Dec 31, 2011.
M&A strategy will not change significantly and will rather stay modest. Sold 37.04 million iPhones in the quarter (128 % y-o-y- growth).
Apple only makes acquisition when it has to accelerate things but Jobs ▪ 01/2012: Apple faces scandal due to negative reports on Asian contract
created a “best of product, best of breed” culture to develop products manufacturer working conditions.
from within the company that is likely to continue. ▪ 07/2010: Reacting to customer complaints, Apple admits that software
▪ Early 2010: Acquires mobile advertising company Quattro Wireless for errors in iOS5 have caused problems on iPhone 4S battery life.
a reported $275 million to USD300 million.
SOURCE: Company press releases; Annual report; Press McKinsey & Company | 29
Latest press on: ZTE Corporation
▪ 01/2012: ZTE plans to drive ZTE intelligent terminal products to achieve a ▪ 01/2012: ZTE launches first WP7.5 smartphone model in the UK.
breakthrough in the global market via the new LTE WiFi hotspot Jetpack ▪ 01/2012: ZTE launches Windows Smart Phones in China in Q3 2012.
EuFi890. ▪ 01/2012: ZTE promises LTE smartphones and tablets for U.S. market in 2012.
▪ 12/2011: ZTE starts local manufacturing of tablet PCs in Sao Paulo ▪ 01/2012: ZTE releases 3 Android terminals in Thailand, the ZTE Racer 2, the
▪ 12/2011: ZTE's North America plans to introduce high-end smartphones in the ZTE Blade and the ZTE V9+.
U.S. and by 2015 the US is expected to be the largest market for ZTE. ▪ 12/2011: ZTE has selected the Mentor® Embedded Inflexion ® UI product to
▪ 11/2012: ZTE started constructing a production base in Heyuan City, develop its next-generation smartphone user interfaces (UIs).
Guangdong Province which will be put into operation in June 2013 ▪ 12/2011: ZTE launches the waterproof STAR7 Softbank 009Z smartphone in
▪ 11/2011: ZTE aims to become "underground", "cool" brand in the UK opening Japan.
the mobile internet to all. ▪ 11/2011: ZTE introduces Atlanta handset in Poland.
▪ 10/2011: ZTE plans to establish mobile phone assembly lines in Romania ▪ 11/2012: ZTE launches Racer II Android smartphone in Ireland.
before the first half of 2012 ▪ 10/2012: ZTE launches the AvailTM smartphone in the US on October 16th.
▪ 09/2011: ZTE intends to expand its share of the mobile phone and modems ▪ 09/2011: ZTE is planning to launch 4G mobile phones in Q2 2012.
market in Brazil to up to 15% by the end of 2012. ▪ 09/2011: ZTE officially launches skate 4.3-inch smartphone globally.
▪ 08/2011: ZTE has opened a major network testing and development center in ▪ 09/2011: ZTE launches Skate smartphone in Hong Kong.
London Docklands. ▪ 05/2011: ZTE plans to launch smartphones and 3G modems under its own
▪ 08/2011: ZTE India establishes the company‘s global experts resource hub brand in Russia in 2011.
▪ 07/2011: ZTE is planning to cooperate with several global telecommunications ▪ 05/2011: ZTE plans launching LTE devices in the US along with smartphones
giants to establish ten international innovation centers in Europe and South based on Microsoft's new Mango operating system.
America. ▪ 02/2011: ZTE showcased the first LTE-A CoMP (Coordinated Multipoint
▪ 07/2011: ZTE plans to expand within the Belarusian market Transmission) prototype in the world.
▪ 06/2011: ZTE plans to boost its market shares of smart phones in Europe and ▪ 12/2010: ZTE to launch 1st smartphone in Japan.
America to 10 percent within the next 12 or 18 months. ▪ 10/2010: ZTE has launched a European FTTx Business Model for the
▪ 05/2011: ZTE sets up its Swiss headquarters in Berne. European optical network markets.
▪ 04/2011: ZTE plans to construct a plant in India to open the local 3G market.
▪ 12/2010: ZTE has opened an office in Darmstadt to expand its presence in
Germany. Miscellaneous
▪ 12/2010: ZTE has started selling handsets in Hungary.
▪ 11/2010: ZTE is planning to open an office in Asuncion (Paraguay) by mid- ▪ 09/2011: ZTE signed a national optical backbone network contract with South
2011. African provider FibreCo.
▪ 08/2011: ZTE has established itself at the Number Five slot in the league of
M&A and cooperation Top Ten handset manufacturers.
▪ 07/2011: ZTE has established a 100 million Yuan (HK$120.74 million) venture
▪ 12/2011: ZTE established a technology partnership with ICT for business capital fund that will invest in innovative projects proposed by its employees.
customer service. ▪ 04/2011: ZTE is set to boost its smart-terminal business by becoming one of
▪ 09/2011: ZTE cooperates with Russian company Popov Radio Plant the top-five global makers of smartphones running on Google Inc's Android
▪ 07/2011: ZTE and Technical University Dresden partner for an R&D center operating system.
focusing on LTE TDD. ▪ 03/2011: ZTE and ZTE, Malaysian U Mobile sign wireless network deal.

Latest press on: Huawei
Strategy and structural changes and financial highlights Product launches and innovations (Focus on mobile handsets)
▪ 11/2011: Huawei inaugurated the first Global Competence Centre for ▪ 01/2012: Huawei unveiled the world’s slimmest smartphone. The
the latest generation of Microwave Technologies in Milan, the first global Ascend P1 S is 6.68mm thin and features a 4.3-inch Super AMOLED
competence center outside China. That testimonies the importance of 960 x 540 touchscreen with Corning® Gorilla® Glass and a 1.5 GHz TI
the country in the global strategy of Huawei and the intention of the OMAP 4460 Cortext-A9 processor and Android 4.0 Ice Cream
company to strongly invest in the local territory and on the local people. Sandwich operating system.
▪ 11/2011: Huawei expects to open its new London Design Centre (LDC) ▪ 01/2012: Huawei announced that the Huawei MediaPad is now one of
in Q1 2012. The LDC will help drive growth of the market share in the world's first tablets to come pre-loaded with the new Android 4.0 Ice
smartphones across Europe. The center demonstrates Huawei's Cream Sandwich operating system.
strategic commitment to UK and Europe. ▪ 09/2011: Huawei unveiled the Huawei Honor, its latest Android 2.3.5
▪ 10/2011: Strategy for emerging markets: Customer-centric innovation, Gingerbread smartphone that features a 16M 16:9 true color high-
commitment to establishing and maintaining long-term local definition (HD) 4-inch FWVGA capacitive touch screen.
partnerships, and localized operations. ▪ 09/2011: Huawei introduced its GigaSite solution. GigaSite is the first of
▪ 08/2011: Huawei Device realized strong growth during H1 2011, with three key mobile solutions that will be announced in the context of what
shipments up by 40% to 72 million units. The handset business grew by Huawei sees as a Giga World. The solution has been specifically
over 100% with smartphones at the center of the growth and the designed to enable operators to improve network capacity and meet the
shipment of Android-based smartphones ranking among the top five in challenges of growing in a mobile industry.
the world. ▪ 06/2011: Launch of the MediaPad, the world's first 7-inch Android 3.2
tablet.
M&A and cooperations
▪ 01/2012: Huawei (40%) and ChinaSoft International (60%) established

a JV specializing in the software outsourcing business.
▪ 11/2011: Huawei announced acquisition of Symantec's 49 percent stake Miscellaneous
in Huawei Symantec Technologies Co., Ltd. for USD 530 million. Upon
closing, the agreement will give Huawei full ownership of Huawei ▪ 10/2011: Announced Patience Wheatcroft, Brian McBride and Claudia
Symantec whic is a Hong Kong-based JV established by Huawei and Arney as new members of its UK advisory board. The prominent
Symantec in 2008.The company provides customers with innovative business and industry leaders will advise the company on its localization
security, storage and systems management solutions. strategies in the UK and help it further tap this key market.
▪ 09/2011: Huawei announced partnership with Aero2, Poland's leading ▪ 08/2011: Renesas Mobile Corporation, a premier supplier of advanced
mobile broadband operator, to launch the world's first LTE TDD/FDD cellular platforms, and Huawei announced that they have successfully
converged commercial telecommunications network. Leveraging made the world's first HSPA+ call with cutting edge speeds of up to
Huawei's innovative SingleRAN LTE solution, the network will be the 10.4Mb/s on the uplink to the cellular base station.
fastest mobile network in Poland, with data speeds of 134Mb/s and
uplink speeds of 124.8Mb/s.

Latest press on: HTC
Strategy, structural changes, and key personnel changes Product launches and innovations (Focus on mobile handsets)
▪ 07/2011: HTC opens its European and UK HQ in London, the next step to show ▪ 01/2012: Introduced the HTC TITAN™ II as the company’s first Windows
the commitment to the EMEA market. The office will be a base from which to Phone to run on a 4G LTE network. Available in the coming months to AT&T
drive the European mobile market forward in the years to come. customers, the smartphone includes the largest display among Windows
▪ 07/2011: HTC promoted Jason Mackenzie to the newly-created position of Phones, an advanced 16-megapixel digital camera and access to 4G LTE
president for global sales and marketing. He will report to Peter Chou and will speeds.
be responsible for HTC's sales strategies and go-to-market execution. ▪ 11/2011: HTC & Verizon Wireless unveil HTC Rezound, the first smartphone in
▪ 05/2011: HTC announces Jack Tong as president of HTC North Asia and the U.S. with Beats Audio. Paired with Verizon Wireless’ lightning-fast 4G LTE
Lennard Hoornik as president of HTC South Asia, two newly created positions. network.
The organizational expansion allows HTC to build a strategic foundation for ▪ 09/2011: HTC unveiled HTC Explorer, its most affordable smartphone. HTC
future growth across the region. Explorer brings an advanced smartphone experience to first time smartphone
customers with a curved and compact design, a 3.2” HVGA touchscreen and
M&A and cooperations 3MP camera.
▪ 09/2011: HTC unveiled its new HTC TITAN™ and HTC Radar™ with
Windows® Phone smartphones. The HTC TITAN has a large 4.7 inch display,
▪ 08/2011: HTC announced the acquisition of Seattle-based Dashwire, Inc, the HTC’s largest phone screen ever in an ultra-thin 9.9mm aluminum case. The
maker of the Dashworks platform that provides mobile and web applications to
HTC Radar is designed for news and entertainment.
easily setup and personalize smartphones, and seamlessly access mobile
content across multiple screens and services. Dashwire will become a wholly
owned subsidiary of HTC.
▪ 02/2011: HTC announced a strategic investment in London-based Saffron
Digital, a global leader in digital multimedia delivery. Saffron Digital has Miscellaneous
innovative technology integrated into products and services in Europe by HTC,
LG, Paramount Digital Entertainment, Sony Ericsson, T-Mobile and Nokia, ▪ 08/2011: HTC Corporation took legal action against Apple Inc for patent
among others, and in the US by Samsung. infringement by Apple’s Mac computer product lines as well Apple’s iPhone,
▪ 10/2010: HTC together with China Telecom unveiled the new HTC T9199 双擎 iPad and iPod product lines. The patents at issue cover a range of functionality
smartphone. The first smartphone designed by HTC and China Telecom for embodied in Apple’s Mac computer and mobile devices.
Chinese consumers, the HTC T9199 双擎. ▪ 03/2011: HTC announced the appointment of Shashi Fernando as chief content
▪ 10/2010: TomTom and HTC announced they are combining strengths to deliver officer at HTC, Fernando was previously CEO at Saffron Digital. Fernando will
superb navigation and location solutions on HTC smartphones. HTC Locations, report directly to Peter Chou.
HTC’s new mapping experience, comes preloaded with TomTom’s location-rich
maps, resulting in a zero-wait navigation experience.
▪ 06/2010: HTC acquired Paris-based Abaxia, a leader in custom software for
mobile operators and handset manufacturers around the world.

Latest press on: Research in Motion (RIM)
Strategy and structural changes Product launches and innovations (Focus on mobile handsets)
▪ 2011: Cost Optimization Program: focused on eliminating redundancies ▪ 2011: Several new products such as 4G tablets and a variety of new
and reallocating resources to focus on areas that offer the highest QWERTY, hybrid and touch screen smartphone models.
growth opportunities and alignment with RIM’s strategic objectives. RIM ▪ 2010: RIM launched several new smartphones including new additions
is reducing its global workforce across all functions by approximately to the BlackBerry® Bold™, BlackBerry® Curve™ and BlackBerry®
2,000 employees now counting approx. 17,000 people globally. Pearl™ families of smartphones, as well as the new BlackBerry®
▪ 07/2011: Thorsten Heins is taking on the expanded role of COO, Style™ and BlackBerry® Torch™ smartphones. The BlackBerry Torch
Product and Sales. All product engineering functions, including both is the first smartphone to feature a BlackBerry keyboard together with a
hardware and software teams, are being consolidated under Thorsten’s full touch screen display and the new BlackBerry® 6 operating system.
direction. This consolidation of product engineering functions is
expected to both produce greater efficiencies and help to accelerate
new product introductions in the future.
M&A and cooperations Miscellaneous
▪ 07/2011: A consortium of technology companies, incl. RIM emerged as ▪ 12/2011: RIM unveiled BlackBerry BBX, its next generation mobile
the winning bidder for all of Nortel's remaining patents and patent platform that takes the best of the BlackBerry® platform and the best of
applications for a cash purchase price of USD 4.5 billion. RIM's portion the QNX® platform to connect people, devices, content and services. In
of the purchase consideration is approximately USD$770 million. addition, RIM announced a series of developer tool updates, including
▪ 12/2010: A subsidiary of RIM acquired The Astonishing Tribe (“TAT”). WebWorks for BlackBerry smartphones and tablets, the Native SDK for
TAT’s design expertise and technologies will be incorporated into the the BlackBerry PlayBook and a developer beta of BlackBerry PlayBook
company’s products to enhance the user interface and customer OS 2.0 with support for running Android applications.
experience. ▪ 08/2011: RIM announced BlackBerry® Management Center – a free
▪ 06/2010: Acquisition of QNX Software Systems for $200 million. QNX’s online service for SME to centrally manage company- or employee-
proprietary software has been incorporated into the Company’s owned BlackBerry® smartphones in the cloud.
products.
▪ 08/2009: Acquisition of Torch Mobile Inc. Torch provides the Company
with web browser based technology.
▪ 03/2009: Acquisition of Certicom Corp. for approximately CAD $131
million. Certicom is a leading provider of cryptography required by
software vendors and device manufacturers looking to protect the value
of content, applications and devices with government approved security
using Elliptic Curve Cryptography.
SOURCE: Annual report; Company press releases McKinsey & Company | 33

Latest press on: TCL Alcatel
▪ 09/2011: Alcatel One Touch to start producing 3G modems in Brazil in 2012. ▪ 01/2012: Alcatel One Touch (OT) presents its One Touch 995 Ultra model at
Aim to reach up to 20% market share 2012. Production of the modems will CES Fair
initially be outsourced, though plans for a factory in the midterm are in the ▪ 01/2012: Alcatel One Touch plans to launch 12 new devices in 2012.
works. Announced the launch of its first triple SIM card mobile phone One ▪ 11/2011: Orange has announced three new Alcatel One Touch phones from
Touch 678, exclusive to the local market. TCL Communications (Alcatel One Touch 585F, 813F and 908F smartphones)
▪ 09/2011: TCL entered into an extended license fee agreement for use of certain for release in Europe and Africa, starting with Romania and Poland before the
trademarks owned by Alcatel-Lucent. Scope of use will be extended beyond end of the year. The new handsets feature deep Facebook integration and a
mobile phones to include smartphones, tablets, etc. dedicated Facebook key.
▪ 06/2011: TCL announced plans to start producing mobile phones in Argentina's ▪ 11/2011: Launch of Alcatel OT Glam 810
Tierra del Fuego province. ▪ 09/2011: Vodafone and TCL launched its Facebook feature phone, Vodafone
▪ 06/2011: TCL revealed plans to install a mobile phones production unit in Brazil Blue in the Indian market
as part of its strategy to reinforce its local presence. Furthermore TCL ▪ 08/2011: Launch of OT 990. All-round Smartphone featuring the Android 2.2
expanded its office in Brazil and begun investing in marketing. operating system, a wide 3.5” touch screen and a 5-megapixel camera.
▪ 02/2011: TCL renames mobile division in Alcatel One Touch Furthermore launch of OT 306 and 890.
▪ 09/2010: TCL Communication has started operations of a Russian subsidiary ▪ 08/2011: Launch of first smart Bluetooth headset ALCATEL ONE TOUCH
and plans to strengthen its position in the Russian cell phone market. BH35
▪ 09/2010: Launch of a full range of ALCATEL brand handsets in Kuwait ▪ 08/2011: To strengthen its penetration into both low to mid-end and high-end
markets, the Group has stepped up its R&D efforts in 3G Android smartphones
and tablets.
▪ 06/2011: Launch of Alcatel OT 908. Powered by a Qualcomm MSM 7227-1
chip, the handset runs on Android 2.2 and features a 2.8-inch touchscreen and
a 2-megapixel camera. The 908 supports GPS, GSM, UMTS, and HSPDA up to
7.2 Mbps, as well as Wi-Fi.
M&A and cooperation Miscellaneous
▪ 02/2011: French portable device maker Arches and TCL Communication ▪ 11/2011: Alcatel One Touch won 2 if product design awards 2012 for its mobile
agreed to sell Arches tablets bundled with Alcatel One Touch Android phones handsets - the ONE TOUCH 818 and the ONE TOUCH 355 PLAY
to telecommunication operators in Europe and the US. ▪ 08/2011: To maintain the sustainable development of overseas market and
▪ 12/2010: TCL Communication and EMOZE Ltd announce strategic world-wide enhance its brand reputation, the Group has signed a three-year partnership
agreement to pre-embed the EMOZE push e-mail solution on TCL and Alcatel with the Maury Sport Organization in France and the Group becomes the
branded mobile products. official partners for years 2011 to 2013, especially, the 100th Le Tour de France
tournament in 2013.
▪ 06/2011: Appointment of a new Alcatel One Touch Brazil CEO Marcus Daniel
Machado

Latest press on: Sony/Sony Ericsson
Strategy and structural changes Product launches and innovations (Focus on mobile handsets)
▪ 01/2012: Xperia S becomes first mobile handset to be launched under ▪ 01/2012: Unveils 4 new Sony branded Xperia phones.
Sony brand. Reviews mixed, criticized for old OS version, Android 2.3. ▪ Xperia S (Flagship product launch Q1 2012, first in the NXT series);
▪ 12/2011: Along with turn-around plans, Sony CEO Stringer plans to ▪ Xperia ion LTE smartphone (US market, launch Q2 2012);
invest in content, tablet and other mobile devices. Stringer (69) ▪ Xperia NX (variant of Xperia S, Japanese market, launch spring 2012)
announces he will step down in March 2012. ▪ Xperia acro HD (HD acro version for Japanese market, launch spring
▪ 10/2011: After Ericsson exit, Sony plans smartphone product offensive 2012). Also introduction of some Android accessories, e.g. Smart
and integration of smartphones into other consumer product lines Tags.
(tablets, TV, gaming). Out-phasing of feature phones is expected. ▪ 10/2011: Announces Xperia range software and platform upgrade to
▪ 10/2011: Sony launches Entertainment Network, music and film Android Gingerbrad 2.3.4.
platform for TV, tablets, PlayStation games console, phones, etc. ▪ 08/2011: Launches Xperia Arc S camera smartphone.
▪ 07/2011: Sony Ericsson opens R&D hub in Beijing, China with local and ▪ 08/2011: Unveils Xperia mini, mini pro smart phones.
global development tasks. Special focus on adoption of Xperia ▪ 06/2011: Debuts Xperia ray, active phones, launches Xeria play in Asia
smartphone range to Chinese customer needs. Pacific.
▪ 04/2011: Launches SonyEricsson Xperia Arc, Xperia Play (first gaming
handset integrated with PlayStation), Xperia Neo smart phones,
accompanied by largest marketing effort in 2 years.
M&A and cooperations Miscellaneous
▪ 12/2011: Sony sells its stake in Samsung TV joint venture amid gloomy  Q4 2011: Sony Ericsson reports quarterly loss due to intense
forecast for TVs for 1.08 tril won. competition, price erosion and restructuring charges.
▪ 2011: To turn around Sony, which has forecast a fourth consecutive  12/2011: Announces exit of Women's Tennis Association sponsorship in
annual loss, CEO announced USD 8.4 billion of acquisitions in 2011 to 2012 as strategic decision for Sony Ericsson brand. GBP 56.3 mn
bolster profitable phones and music divisions. contract was largest in tennis history.
▪ 11/2011: Sony Ericsson selects PHD as global media agency in 2 year  10/2011: Sony recalls Bravia TV sets because of fear of overheating
contract.  Mid 2011: After Japan earthquake, Sony faces operational difficulty and
▪ 10/2011: Sony buys Ericsson out of the 50/50 mobile JV Sony Ericsson supply chain issues in Japanese facilities.
for EUR 1 bn. Sony plans to become stronger in the profitable phone  07/2011: Sony faces a series of cyber attacks; hackers access millions
business as it faces ongoing losses in the TV division. of customer data.
▪ 10/2011: Sony Ericsson introduces Xperia mini line in cooperation with
Emobile, Japanese mobile broadband service.
35
SOURCE: Company press releases; Press McKinsey & Company | 35

Apple: Leveraged its strong ecosystem to become the most
profitable handset player
Basic facts Financial indicators
Headquarter: Cupertino, U.S. Revenue
Ownership: Public (New York City, AAPL) $ bn
Employees: 60,400 108
65
37 43
24
Overview
2007 08 09 10 2011
▪ Designs, manufactures and markets mobile communication and media
Operating margin
devices, personal computers, and portable digital music players, and
%
sells related software, services, peripherals, networking solutions, and
third-party digital content and applications 27 28 31
22
18
Strategy
▪ Entered handset business in 2007, and now the most profitable Revenue by segment
vendor with its one phone the iPhone in the market $ bn
▪ Built an ecosystem (managed end to end) consisting of devices, Mac 24 37 43 65 108
storefront and applications. Launch iconic devices at premium price, iPod1 20
43 38 32 27
supported by strong marketing 1 13
iPhone
▪ Continued focus on third party digital content and its expansion 28
20
iPad1 33 43
through the iTunes store 45 1 0 39
Peripherals 30
Products and services 0 5 18 6 0 4 19 3
S/w & services 6 5 6 3 3 8 2
Revenue by geography
▪ Hardware: Mac, iPod, iPhone, iPad, computer accessories
$ bn
▪ Software: Productivity suite (iWork), Digital content suite (iLife),
Software for professionals (Aperture, Final Cut Pro X, Logic Pro), America
24 37 43 65 108
Mobile operating system (iOS) Europe
38 44 44 35
▪ Services: iCloud, App stores, customer support APAC
48
29 28 25 26
23
Others 19 13 12 22 26
15 16 19 7 13
2007 08 09 10 2011
1 Includes related products and services
SOURCE: Company reporting; Press McKinsey & Company | 36
RIM: Enterprise-focused player struggling with competition and
declining margins
Headquarter: Waterloo, Canada Revenue
Ownership: Public (Toronto, RIM) $ bn
Employees: 17,500 20
15
11
6 n/a
Overview
2007 08 09 10 2011
▪ Designs, manufactures, and markets wireless solutions for mobile and
Operating margin
telecommunications market
%
29
25 22 23
n/a
Strategy
▪ Traditionally email centric full QWERTY devices, trying to move more Revenue by segment
and more into consumer segment, now offering touch screen (full or $ bn
combined w. QWERTY)
6 11 15 20
▪ Struggling with its own OS, given the lack of application to compete
Devices
with Android or iOS, but are trying to get around that, possibly by
piggybacking on Android market Services
79 82 81 80
▪ Continued focus on enterprise Software
Products and services Other n/a
14 2 3 3 16 2
4 2 13 2 14 2
▪ Hardware: Tablets, smartphones, mobile accessories Revenue by geography
▪ Software: Mobile operating system (Blackberry OS), business $ bn
software (enterprise server, mobile fusion, messaging server) Canada 6 11 15 20
▪ Services: Blackberry App World, Blackberry Messenger, Customer 7 10 5
UK 8 11 7
support 59
US 63 58 39
other 8 6 43 n/a
26 23 27
2007 08 09 10 2011

HTC: Niche smartphone player diversifying, with an eye
toward services
Headquarter: Taoyuan City, Taiwan Handset revenue
Ownership: Public (Taipei, 2498) $ bn
Employees: 12,943 15,4
8,8
3,6 4,8 4,4
Overview
2007 08 09 10 2011
▪ Pure-play smartphone and tablet manufacturer
Operating margin
%
26
20 17 16 14
Strategy
▪ Smartphone pure-play vendor with strong track record, notably on Revenue by segment
Android smartphones $ bn
▪ Diversifying the OS platforms used
– Launching Windows 7 phones in the market n/a
▪ Making a move into services
– Made acquisitions into online music store, cloud based sync Revenue by geography
$ bn
Products and services
4 5 4 9
▪ Hardware: Smartphones, tablets
▪ Services: Customer support North American 42 36
49 51
39
Europe 40 30 32
Asia and Others 25 n/a
18 21 17
2007 08 09 10 2011

Nokia: The global leader, which is struggling to maintain its
position due to intense competition in smartphones
Headquarter: Espoo, Finland Revenue
Ownership: Public (Stockholm, NOK1V) $ bn
Employees: 132,430 (2010) 70 75
57 56 54
Overview
2007 08 09 10 2011
▪ Manufactures handsets and telecom equipment (in subsidiary NSN)
Operating margin
and provides related services
%
▪ Nokia is WW#1 in the overall handset market in terms of volumes,
however it has lost its top position in the smartphone segment 15
10
3 5
Strategy
-3
▪ Partnering with MSFT to launch Windows smartphones with Nokia Revenue by segment
specific navigation and music services built into the phones. Hopes to $ bn
recover its leadership position in the segment
70 75 57 56 54
▪ Renewed emphasis on emerging markets like India through dual SIM
Devices and
devices
related
▪ Emphasis on organizational restructuring to streamline their go-to- 74 70 69 70 64
services
market processes (consolidation of reporting units)
NSN 26 30 31 30 36
▪ Hardware: Handsets, networking equipment (NSN)
$ bn
▪ Services: app store, Maps, Digital content, Life Tools, Mobile money,
etc; network related services (NSN) 70 75 57 56 54
EMEA
53 51 50 48 45
APAC
35 35 38 39 40
North America
12 13 13 13 15
2007 08 09 10 2011

Sony Ericsson: The multimedia-focused vendor turning around
the company to full smartphone focus
Headquarter: London, U.K. Revenue
Ownership: Now becoming subsidiary of Sony corporation $ bn
after buyout of Ericsson’s 50% share in JV 18 17
Employees: 7,600 9 8 7
Overview
2007 08 09 10 2011
▪ A mobile phone manufacturing company
Operating margin
▪ Has key strengths in high end multimedia e.g. camera and music
%
▪ Set to become a wholly owned subsidiary of Sony and to be
integrated into Sony’s platform of consumer electronics products 12
3
Strategy -1 -4
-15
▪ Now focusing on Android smartphones, after being primarily a feature Revenue by segment
phone company a few years back. $ bn
▪ Widening the use of the smartphones by leveraging Sony’s assets in
consumer electronics and content n/a
– Offering Sony Entertainment Network services
– Leveraged Bravia, Playstation etc from Sony (e.g. in new flagship
Xperia S)

▪ Hardware: Handsets
$ bn
▪ Services: Customer support
n/a

ZTE: Aggressive low-cost Chinese vendor focusing on
large carriers
Headquarter: Shenzhen, China Revenue
Ownership: Public (Shenzhen, 000063) $ bn
Employees: 85232 (December 2010) 9 10
6
5
n/a
Overview
2007 08 09 10 2011
▪ A leading integrated communications manufacturer and a provider of
Operating margin
global telecommunications solutions
%
▪ Chinese low cost vendor
7 7 7
6
n/a
Strategy
▪ Targeting mainstream carriers in large countries Revenue by segment
▪ Plans to optimize logistical processes and strengthen delivery $ bn
capabilities and to enhance its technological and engineering
5 6 9 10
capabilities
Carrier
network 65 65 66 60
Handsets
S/w and 22 22 22 26 n/a
products 13 13 12 15
▪ Hardware: Handsets, carrier and enterprise equipment Revenue by geography
▪ Services: Carrier and handset related services $ bn
5 6 9 10
APAC
70 63 72 64
Africa
Europe, 16 21 11 15 n/a
14 16 16 21
America and
Oceania 2007 08 09 10 2011

Huawei: A low-cost Chinese vendor with high ambitions, also in
developed markets
Ownership: Public $ bn
Employees: 110,000 (December 2010) 27
18 22
12
n/a
Overview
▪ Manufacturer of handsets, carrier equipment and a provider of related 2007 08 09 10 2011
services Operating margin
▪ Tremendous profitable growth story, notably in infrastructure e.g. #2 in %
mobile infra
▪ Low cost Chinese vendor with very strong low end offerings 13 14 16
complemented by a play in smartphones (plain, but at low cost) 10
n/a
Strategy
▪ Focus on: Revenue by segment
– Providing solutions for the Cloud, Pipe and Devices $ bn
– Customer centric innovation
– Agility in responding to market needs Telecom
22 27
▫ Dropped the traditional top-down management approach Services
▫ Establishing global centers of competency Global 67 66
▪ Shifting handset focus from developing to developed markets Services
Products and services Handsets n/a n/a 16 17 n/a
17 17
▪ Wireless networks: Complete offering on GSM, LTE, CDMA, WiMAX Revenue by geography
▪ Wireline networks: Broad and competitive offering in fixed access, $ bn
optical transport and core/edge switching and routing
22 27
▪ Services: Improved portfolio of services, sold to tier 2 and 3 operators
▪ OSS/BSS: Support systems for mobile and fixed networks 40 35
▪ Devices: Mobile phones and fixed devices targeting emerging markets China
n/a n/a 65 n/a
▪ Storage: JV with Symantec to enter the enterprise storage market Overseas 60
2007 08 09 10 2011

Samsung Electronics: Fast time-to-market and innovative
products have made Samsung a leader in smartphones
Headquarter: Seoul, South Korea Revenue
Ownership: Public $ bn
Employees: 160,000* 139 149
108 97 109
Overview
2007 08 09 10 2011
▪ Company with wide business reaching from components to consumer
Operating margin
electronics and home appliances, with strong track record
%
▪ Agile #2 in handset market; has had tremendous success with
smartphones. Aiming to become #1 in handset worldwide in 2012 11 10
9 8
5
Strategy
▪ Bringing “infotainment and lifecare” to inspire the world and create the
future Revenue by segment
▪ Fast to market with flagship models e.g. Galaxy SII to lead the way for $ bn
the wider portfolio Semiconductor 109 139 149
108 97
– Launched worlds first LTE, 8Mpxl+ camera phone etc, leveraging 20 24 22
LCD 23 17
e.g. in-house technology innovations 17 19 19 18
▪ Plans to integrate handsets with its wider CE offering Telecom 18
25 27 28 27 34
– e.g. using smartphone as companion / remote control to TV Digital Media 27 32 n/a
▪ Strong design and marketing skills leveraged across group 7 7
38 37 36
Others -5 -7 -10
Products and services Revenue by geography
▪ Hardware: Consumer electronics (Handsets, Tablets, TVs, Set top $ bn
boxes, ACs, Computers and peripherals, Business specific hardware, 97 109 139
etc) APAC
▪ Components: Semiconductors (multimedia processors etc), LCD America
56 59 61
screens n/a 16 15 16 n/a
▪ Services/Solutions: IT Solutions (Healthcare, Education, Government, Europe 28 26 23
etc), Customer Support
2007 08 09 10 2011
* 2009
SOURCE: Company reporting; Press
LG Electronics: Innovation and design-focused consumer
electronics’ company, with challenges
Headquarter: Seoul, south Korea Revenue
Ownership: Public (Busan, 003550) $ bn
Employees: 93,000 59 57 50
44 49
Overview
2007 08 09 10 2011
▪ A wide consumer electronics / home appliance company betting
Operating margin
technology and design
%
▪ LG Life’s good – making life better, easier and more fun, bringing the
consumers voice into the innovation process 6,4
5,3 4,8
Strategy 0,3 1,1
▪ LGE is betting on strong innovation and design Revenue by segment1

▪ Betting on fast to market e.g. first WW with dual core processor in $ bn
Optimus smartphone,, 3D, bright and clear displays, and 4G LTE,
MC2 44 50 49
using both WinPhone and Android
▪ Coming from a past with feature phone focus where they are now HE +HA2 33 25 22
under strong pressure from e.g. TCL-Alcatel, Hauwei and ZTE, they AC2
are making a push into smartphones BS2 53 59 62
Others2 n/a
Products and services 7 8 8 9 8
8
▪ Hardware: Handsets, TVs, audio and video accessories (home theater
$ bn
systems, projectors), home appliances (refrigerators, microwaves,
washers and dryers, air conditioners), computer accessories (monitors, 59 57 44 50
network storage, burners and drives, dongles), commercial appliances Americas 28 34 36 35
(solar panels, ACs, displays) Europe 22 22 17
20
▪ Services: Customer support
50 n/a
Asia, Africa, and 44 44 48
Others
2007 08 09 10 2011
1 2007, 2008 not reported as segmental reporting changed 2 MC: Mobile Communication, HE + HA: Home Entertainment and Home Appliance, AC: Air
Conditioning, Others: Other segments and inter segment transactions and Business Solutions McKinsey & Company | 44
SOURCE: Company reporting; Press
TCL – Alcatel: Small vendor with aim to step up
developed markets
Ownership: TCL-Alcatel is fully owned by TCL $ bn
Communications 1,1
Employees: n/a 0,6 0,6 0,6
n/a
Overview
2007 08 09 10 2011
▪ Manufacture handsets, under brands TCL (China) and ALCATEL ONE
Operating margin
TOUCH (non Chinese markets) and do ODM business in handsets
%
▪ Created in JV form in 2004 with TCL (55%) and Alcatel (45%), where
Alcatel exchanged it ownership in TCL – Alcatel to shares (5%) in 7
parent company TCL Communications Holding 1 1 n/a
▪ Chinese low cost vendor with recent success in Latin America
Strategy -4
Revenue by segment
▪ Coming from a low end position, aiming higher with its “Step Up” $ bn
product strategy
▪ Increased focus on North America with a flurry of low-priced Android n/a
smartphones and feature-rich handsets positioned for pre-paid
consumers

▪ Hardware: Handsets and ODM business within TCL Com companies Revenue by geography
$ bn
0,6 0,6 0,6 1,1
China 22 11 11 6
Overseas 78 89 89 94
n/a
2007 08 09 10 2011
SOURCE: Bloomberg; Press McKinsey & Company | 45

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WORKING DRAFT
Last Modified 3/15/2013 2:28 PM Malay Peninsula Standard Time
Printed 2/3/2012 10:46:40 AM W. Europe Standard Time
Overview of the mobile

device market, trends,
and vendors
Fredrik Lundberg
Dhruv Varma
Anna Kochalska
Global TMT Research

Feb 2012
CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of McKinsey & Company is strictly prohibited

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Overview of the Mobile Device

Market, Trends, and Vendors

CONFIDENTIAL AND PROPRIETARY

▪ Mobile handsets is 1.6bn unit, quarter trillion

▪ Key trends in the market are intensified OS

▪ Handset vendor: Appendix

McKinsey & Company | 1

3G WCDMA launched Financial crisis 1,793 1,829

2003 2005 2007 2009 2011 2013 2015 2016

238 245 245 246

2003 2005 2007 2009 2011 2013 2015 2016

SOURCE: Strategy Analytics, November 2011 McKinsey & Company | 2

SOURCE: Strategy Analytics, 2011 McKinsey & Company | 3

SOURCE: Strategy Analytics, November 2011 McKinsey & Company | 4

Entry (US$36 - 99) 47 50 53 52

Mid (US$100 - 190) 26 22 21

Handset wholesale ASP per vendor

2007 2008 2009 2010 2011

SOURCE: Strategy Analytics, November 2011 McKinsey & Company | 6

44 ”Apple customers waited for the delayed

SOURCE: Strategy Analytics October 2011 McKinsey & Company | 8

35 ▪ Apple stands out

* i.e., only including the handset operations of the companies

▪ Mobile handsets is 1.6bn unit, quarter trillion

▪ Handset vendor: Appendix

McKinsey & Company | 11

▪ iOS and Android are the current key OSs, after

▪ Large amounts of super high end phones coming into

▪ Several vendors (Sony / Sony Ericsson1, Apple,

SOURCE: Team McKinsey & Company | 12

100% = 36 42 43 54 55 62 81 101 103 111 120

SOURCE: Strategy Analytics, NovEMBER 2011 McKinsey & Company | 13

 US version of Lumia 800 with

„For the mainland Chinese market, Nokia will

Colin Giles, Nokia VP

 Apollo is said to be a codename for WinPhone 8

SOURCE: Press clippings McKinsey & Company | 14

Microsoft global smartphones sales and share

„By 2012, WinPhones will be able to grow its

Nick Dillon, OVUM The Gadget Show

SOURCE: Strategy Analytics; press search McKinsey & Company | 15

2012, trying to differentiate on e.g., screens, slimness, multimedia

Company Examples Comments from CES 2012

▪ Apple is over time creating more Industry Expert

Sony launched “PlayMemories” at CES 2012

“When these products are combined with “Through this

SOURCE: Sony website; Press clippings McKinsey & Company | 18

Apple iCloud announced October 2011

▪ iCloud is a synch service,

SOURCE: Press clippings, Apple website McKinsey & Company | 19

Q209 Q3 Q4 Q110 Q2 Q3 Q4 Q111 Q2 Q3

Micromax 4,1 37,0 India

Kyocera Sanyo 3,0 45,0 Japan

Lenovo 2,8 33,0 China

Pantech 2,7 23,0 South Korea

Industry growth 15%

SOURCE: Strategy Analytics; Company websites McKinsey & Company | 21

EFYTimes, Dec 2011

▪ Mobile handsets is 1.6bn unit, quarter trillion

▪ Key trends in the market are intensified OS