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Contents

A. Executive summary B. Market overview: What a change two years make What is the idle screen all about? Lead Author George Voulgaris, Ph.D. | Operations & Research Manager George has a multidisciplinary background in academic research, wireless technology due diligence and product management positions. He coordinates and leads research projects within VisionMobile, having expertise in subject matters such as mobile service analytics, UI customisation technologies, active idle screen products, on device portals and business model innovation. George holds a Ph.D. on Content-based Image Indexing and Retrieval from the University of Glamorgan, Wales. His interests are in telecoms convergence, network security and mobile software development. Definitions: AIS vs Widgets vs ODPs What the idle screen means for the industry 2007-9: a fast-changing landscape Operator deployments in five continents C. Comparative vendor analysis Abaxia, ACCESS, Celltick, Cibenix, Insprit, Nuance, SurfKitchen D. Outlook: Market Trends and Opportunities 2009-2011 AIS vendors; survival and adaptation More innovation on the idle screen Who will own the screen?

Editor Andreas Constantinou, Ph.D. | Research Director As Research Director, Andreas oversees the research, advisory and industry mapping projects at VisionMobile. He has nine years experience in research, development and strategy in wireless, specialising in mobile handsets, software strategy and open source. Andreas also teaches the Mobile Open Source training course, part of VisionMobiles 360 degree workshops on complex industry sectors. His interests include uncovering under-the-radar industry trends and pursuing human-centric design. Andreas holds a Ph.D. on Image & Video Compression from the University of Bristol, UK.

Copyright VisionMobile 2009

A sector analysis of Active Idle Screen solutions Part of the Mobile Industry Atlas : a visual map of who's who in the mobile industry, available in glossy A1 wallchart format. The Atlas showcases 800+ leading companies in 47 market sectors, spanning all major players involved from handset design through retailing including development and delivery of hardware, software, SIM cards, services and content. www.visionmobile.com/maps

About VisionMobile VisionMobile is an industry analysis firm in telecoms. We offer competitive landscape analysis, industry maps, on-site training and due diligence on under-the-radar sectors, focusing on mobile software and services. www.visionmobile.com info@visionmobile.com 90 Long Acre, Covent Garden, London WC2E 9RZ +44 845 003 8742

Disclaimer VisionMobile believes the statements contained in this publication to be based upon information that we consider reliable, but we do not represent that it is accurate or complete and it should not be relied upon as such. Opinions expressed are current opinions as of the date appearing on this publication only and the information, including the opinions contained herein, are subject to change without notice. Use of this publication by any third party for whatever purpose should not and does not, absolve such third party from using due diligence in verifying the publications contents. VisionMobile disclaims all implied warranties, including, without limitation, warranties of merchantability or fitness for a particular purpose. VisionMobile, its affiliates and representatives, shall have no liability for any direct, incidental, special, or consequential damages or lost profits, if any, suffered by any third party as a result of decisions made, or not made, or actions taken, or not taken, based on this publication.

Executive Summary

| Summary
The active idle-screen (aka home screen or phone top) is the synonym of zero-click distance. It is the most premium real-estate on the handset for service delivery and promotion. In this report we review the solutions which offer zero-click access to services, information and promotion on the handset idle screen. The market of idle screen solutions has grown considerably; in 2002-2006 it was kick-started by active idle screen (AIS) vendors and tier-1 operators; in 2007-2009 it has been capitalised by Apple, HTC, Samsung, LG, Samsung and increasingly Nokia, Android and Windows Mobile; In 2010-2011 it will be elevated into precious real-estate divided between the handset OEM, operator and service providers. The ownership of the idle screen will become as elementary as customer ownership; as ubiquitous as handset branding; and as important a monetisation tool as handset accessories. In this report we examine the market trends and opportunities that will determine the billion-unit question: who will own the screen?

| Key takeaways
- Commercialisation of idle screen is moving into mainstream adoption; handset OEMs and OS vendors are exploiting this real-estate for UI differentiation, shaken up into action by the iPhone widget paradigm. - OEMs are moving to offer idle-screen -customisation solutions as part of an a-la-carte service, where we see Nokia leading initially. This opens up the idle screen to exploit by tier-2/3 operators for the first time - Active idle screen solutions (AIS) are available from Abaxia, ACCESS, Celltick, Cibenix, Insprit, Nuance, and SurfKitchen. Their unique selling points are commercial relationship brokering and large addressable market, not product features. AIS vendors will remain in demand for the foreseeable (2 year) future, serving tier-1 operators who want to go that extra mile in uniquely customised devices. - For software vendors, idle-screen placement should not be seen as yet another feature on the product box, but as a fundamental design goal; there are substantial technical and commercial obstacles for a software to become embedded on the handset idle screen across a meaningful addressable market of handsets. - We expect to see more innovative applications arrive at the handset idle screen; signature interaction paradigms, intelligent search & discovery, phonebook 2.0, service storefront, inventory analytics and the use of widgets as a unit for carving up the idle screen real-estate among operators and handset OEMs. - Long term, the idle screen, much like the customers wallet, will not be owned by any single party, but shared among multiple service providers. And what will be more important is not owing the out-of-the-box experience but the in-the-hands experience, i.e. managing service delivery and inventory on the idle screen.

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Market overview: What a change two years make

| Introduction
The idle-screen has come a long way since we last wrote about this market sector in 2007. Apple's iPhone hit the headlines of mobile industry news as a blessing and a curse in equal proportions. A curse because it has elevated the terms "widget" and "user experience" to ridiculous heights; these days every other mobile software firm uses the terms 'widget' and 'user experience' as its middle name, leading to confusion. A blessing because it has demonstrated to the world how eye-level shelf space can be best exploited to accelerate service discovery and usage. It is this eye-level shelf space and its commercial exploitation that we analyse in this report. In a previous report that we wrote in 2007 for Informa Telecoms & Media (Activating the Idle Screen: Uncharted Territory) we coined the market sector of Active Idle Screen (AIS) solutions and reviewed over 15 vendors in that sector, as well as several operator deployments. Two years on, the idle screen market has changed considerably; vendor consolidation, mass-market deployments and productisation of the idle screen real-estate are some of the key changes that have been effected.

| What is the idle screen all about?

Historically, service discovery has suffered in mobile handsets for many reasons, notably: - The 100s of handset features and operator services have been buried under long, cascaded, but unintuitive menus. - The idle screen, the primary real-estate of the handset, has not been effectively used as shelfspace, but only for personalised wallpapers and status indicators. It has become clear to handset manufacturers and network operators alike that with fewer clicks comes accelerated service discovery and usage. First appearing in 2002, Active Idle Screen solution vendors emerged to place content, services, user information and device functionality at zero click distance of the handset. In 2009, pure-play AIS solutions are available from Abaxia, ACCESS, Celltick, Cibenix, Insprit, Nuance and SurfKitchen. For formality, we have defined AIS as: AIS solutions are the software platforms which enable the discovery, access, search, promotion or advertising of content, services and handset functionality on the idle screen

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In short, Active Idle Screen is the synonym of zero-click distance. The idle screen is the eye-level shelf space, the starting and finishing point for all tasks associated with using a mobile phone. Whether making a call, sending a text message, checking voicemails, changing a ringtone, or watching Mobile TV, the idle screen precedes and concludes the user journey involved in performing each task. Besides its pivotal position in the user journey, the idle screen offers a non-intrusive medium on the handset for presenting informational or promotional messages. Moreover, the idle screen can encompass almost any device functionality, such as searching for contacts, looking up information on wheres my nearest.

Nellymoser, OnMobile, Streamezzo, SurfKitchen and many others. For example, all self-respecting Mobile Application Stores have an on-device storefront, which is in effect a form of on-device portal for browsing and buying applications. We delineate AIS from Widgets and ODP as follows: - ODPs refer to how content is delivered, i.e. outside the browser and within a device-side application which leverages device functionality. - Widgets refer to how a user interacts with applications or services i.e. through a set of single-function windowed miniapplications. - AIS refers to where an application or service is accessed from, i.e. on zero-click distance from the idle-screen rather than from a menu or a soft key.

| AIS vs Widgets vs ODPs

Widgets is another term which is encountered often in mobile software vendor collateral. Mobile widgets refer to two distinct concepts; a user interaction paradigm, where the user interacts with windowed mini-applications, and a web-based programming environment (as per the W3C Widget specification). From an architectural perspective, widgets are single purpose, windowed, mini applications which can sit on the idle screen or any other screen of the handset. Widget solutions are available from Nokia (Web Runtime), Motorola (WebUI), ACCESS, Insprit, Opera, Picsel, Streamezzo, SurfKitchen and many others. On-device portals (ODP) is another term which is often discussed in a similar context. We coined the term ODP when writing ARCcharts 2006 report titled On-Device Portals: Beyond WAP. On-device portals are client-side applications for browsing and buying content. ODP solutions are available from ACCESS, Cibenix, Communology, Handmark, Insprit, Mobinex, mPortal,

AIS vs ODP vs widget technologies

!

zero-click distance Active-idle screen

! On-device portals

software-based content delivery

windowed interaction Widgets

source: VisionMobile research

It follows that widgets and ODPs are two of many applications that can be featured within an AIS solution. On the contrary, it is quite complex for an ODP or widget framework to feature zero-click placement. Replacing the idle screen requires deep integration with the handset, which is tough to deliver across a meaningful addressable market as it needs strong OEM relationships and

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operator buy-in. Furthermore, since AIS solutions are located at the beginning of every user journey, they need to be integrated both vertically with hidden APIs and horizontally with core handset applications such as inbox, contacts, call logs and dialler. Consequently, idle-screen access for an application should not be seen as yet another feature on the product box, but as a fundamental design goal.

the operators customized idle screen (starting with S60 handsets) gives access to services and featured 3rd party content through a four-way navigation paradigm. - For advertisers and content providers, the idle screen presents another inventory channel besides SMS, MMS, WAP and in-game placement, albeit a channel with increased CPCs and CPAs due to its prime location and potential for access to detailed analytics.

| What the idle screen means for

the industry
The idle screen is a key part of the out of box experience of the handset for all key players in the mobile value chain. For handset manufacturers: As the pinnacle of the user interface, the idle screen offers opportunities for OEM differentiation. The ability for handset OEMs to differentiate on handset features or plastics has lessened. The user interface (UI) has therefore comparatively increased in importance as an OEM tool for differentiation. The idle screen is at the centre point of the UI and often the only screen the user sees at the point of purchase the idle screen is therefore the focal point for OEM differentiation. As the CEO of an (unnamed) top-10 handset OEM has said: we are not a handset manufacturer, we are firstly a UI company. - For operators/carriers, the idle screen is the primary launchpad for exposing and accelerating the discovery of network services. Anecdotal but repeated operator studies have shown an increase in service usage and data revenues due to accelerated service discovery from the idle screen. Operators can also act as inventory brokers by controlling ad placement on the idle screen. Vodafone is a good example of how operators can exploit the idle screen;

| 2007-9: a fast-changing
landscape
The last two years saw many important innovations; touch-screen phones (a new form factor which has also increased the square inches of real-estate of the idle screen), next-generation operating systems (Android and WebOS) and open source browsers (WebKit). The idle screen has also witnessed much change. The landscape of independent AIS solution vendors has changed significantly since 2007 when we wrote the first AIS report. In that report we had identified 20 key players in the AIS solutions market. Today this number has been almost halved, in what seems to be a struggle for the survival of the fittest. Handset OEMs (including Nokia, Samsung, Sony Ericsson, LG and HTC) have opted to provide their own idle screen solutions, following the steps of Apples iPhone and Motorolas (now defunct) Screen3. Samsungs TouchWiz UI and LGs S-Class UI are using widget-based interaction paradigms on the idle screen to expose services and device functionality. HTC has highlighted the importance of idle screen customization with its Sense UI and Toshiba has licensed idle screen and user interface layering software from Spb Software.

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Its also worth noting that operating systems are now featuring customisable idle screen frameworks. The Android OS offers a widget interaction paradigm on the idle screen as of version 1.5. Windows Mobile 6.5 introduces a widget-based idle screen as of version 6.5 that breaks away from the horizontal plug-in silos.

agenda conflicts, and requires 12-18 month sales cycles. Porting the solution across 10s of software platforms (many of which proprietary) and managing a two-sided operator and OEM relationship are further complexities which lead to high costs and long return-on-investment. The pureplay AIS vendors have therefore reduced in numbers, to those six who have

Players providing or featuring AIS solutions we identified in May 2007 and in May 2009. 2007
Company / product Abaxia Mobile Portal ACCESS NFDM Acuity Mobile Aditon U-daily Adobe Flash Home Amobee

strong relationships with operators; Abaxia, ACCESS, Celltick, Cibenix, Insprit and SurfKitchen. Within the key AIS vendors we also include Nuance, a player with strong OEM ties, whos T9 Nav product deserves merit as providing unique search functionality from the idle screen. Note that Nuance has acquired Zi Corp., and with it, Zis Qix product which is feature-similar to T9 Nav. These 6+1 vendors are reviewed in chapter C. Mobile advertising vendors like Amobee, Acuity Mobile and Aditon have strayed off AIS territory as it has proven hard to execute idle screen placement when its not a core competence. Adobe Flash Home has been discontinued as Adobe has been refocusing its core strategy into client and tools. ODP technology solutions like Bling and Qualcomms uiOne have disappeared from the headlines. At the same time, browser vendors are moving closer into idle screen territory, thanks to the increased memory capacity offered within smartphones. Opera Mobile is releasing widgetbased idle screen implementations in two operator-customised handsets. Nokia is using Web Runtime (WRT, based on the WebKit browser engine) to implement its Home Screen product on the S60 platform. Note that Nokia considers WRT to be some years away from being available as an Series 40 feature, partly due to the high memory requirements of browsers that need to be always-on as part of the idle screen. Nokias Home Screen is perhaps the product most representative of the future of OEM-own

2009
Company / product Abaxia Mobile Portal ACCESS Widgets Player Acuity Mobile Aditon U-daily Adobe Flash Home Amobee Apple iPhone

Bling BlingPlayer Celltick LiveScreen Cibenix Insprit IntroPad

Bling BlingPlayer Celltick LiveScreen Cibenix Insprit IntroPad LG S-Class UI

MobiComp mTicker Mobile Posse Motorola Screen3

MobiComp mTicker Mobile Posse Motorola Screen3 mPortal Nokia Home Screen

Nuance T9 Nav OnSkreen Fusion

Nuance T9 Nav OnSkreen Fusion Opera Mobile

Pointui Qualcomm uiOne

Pointui Qualcomm uiOne Samsung TouchWiz UI SPB Software

SurfKitchen SurfKit

SurfKitchen SurfKit Toshiba

Zi Qix

Nuance Qix

source: VisionMobile research

For independent AIS vendors, selling idle screen customisation solutions is a tough business. The proposition is complex to sell to OEMs due to

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AIS implementations. Nokia Home Screen features a widget interaction paradigm on the idle screen that is personalisable by users and customisable by operators. The Home Screen out-of-the-box experience is available on S60 and some S40 handsets from mid 2009 (starting with the N97) and is defined by Nokia and in some cases with operator partners. It is also worth noting that Home Screen customisation of widgets by the operator is becoming available as part of Nokias variant management process, which means that tier-2 and tier-3 operators will now be able to customise idle screen icons as part of a standard device procurement agreement and without time-to-market delays and related commercial risks. Also worth noting is INQ Mobile, a subsidiary of Hutchinson Whampoa, who launched its first INQ1 handset in December 2008. The handset is available exclusively through 3 (Three) in UK, Australia, Ireland, Italy and Hong Kong and is priced at the mid-range feature phone segment (in the UK the phone costs a mere 80 without contract). Designed with social network applications in mind, INQ1 offers out-of-the-box idle screen access to Facebook, Skype, Windows Live Messenger, Google, e-mail etc via an icon carousel at the bottom of the idle screen. The INQ1 allows the user to personalise the widgets shown on the idle screen, but the selection is limited to a handful of alternatives such as clock, RSS reader and weather information.

Operator-led deployments of AIS solutions

Operator FT Group / Orange Vodafone Group WILLCOM NTT DoCoMo Softbank Alltel Wireless Hutch 3G (Three) Hutch 3G (Three) SKT KT China Mobile TMN Leap Wireless/Cricket T-Mobile MyFaves T-Mobile (trial) Telus (trial) Telstra Vodafone Live Cast Vendor Abaxia Abaxia ACCESS ACCESS ACCESS Aricent Cibenix INQ Mobile Insprit Insprit Insprit MobiComp mPortal NewBay Nuance Nuance SurfKitchen in-house Region 9 OpCos 27 OpCos Japan Japan Japan US UK 5 OpCos Korea Korea China Portugal US 5 OpCos US Canada Australia Germany

Note: we have excluded software deployments which are accessible from a soft key on the idle screen (1-click) Source: vendor data, VisionMobile research

We also understand that at least five Tier-1 operators have issued RFQs for idle screen solutions, primarily in Europe, but also Latin America and the Middle East. It is also worth noting that Cellticks SIM-only AIS solution has been deployed with operators Movistar (Argentina), VimpelCom (Russia), AIS (Thailand), Vodafone Essar (India), Globe (Philippines), KievStar (Ukraine), Dialog (Sri

| Operator deployments in five

continents
As of mid 2009, active idle screen solutions have been widely deployed across five continents. The next table summarises the many AIS operator deployments (on zero-click distance) that we are aware of.

Lanka), Claro (multiple OpCos), Vivo (Brazil), Azercell (Azerbaijan), MTS (multiple OpCos), Velcom (Belarus), Singtel (Singapore), Dialog (Sri-Lanka), VMS (Vietnam), Vinaphone, Viettel (Vietnam), Mobicom (Mongolia), Spice (Nepal), Telkomsel, Indosat (Indonesia), Avea (Turkey), Beijing Unicom (China) and Telefonica (Argentina). Indeed, the idle screen is fast moving towards the epicenter of operator differentiation.

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The AIS market: Comparative vendor analysis

Comparative analysis of AIS (zero-click) solutions - product launches, handset deployments, features
Deployments* Vendor /product Abaxia Mobile Desktop ACCESS NetFront Widgets Celltick LiveScreen Media Cibenix Insprit IntroPAD Nuance T9Nav SurfKitchen SurfKit Home Launched OEM Licensees H/S models 2001 2008 2000 2003 2004 2008 2008 10 6 2 5 2 1 60 9 >100 9 64 n/a 3 Installed base 21M n/a 65M 1.3M 13M n/a 250K CLNT S Features TOOL PRED

CLNT = Handset client (S = SIM-only app). TOOL = Vendor offers tools for idle screen UI customization. PRED = Predictive search (*) Handsets shipped with the client software embedded in ROM at zero-click distance (except for Celltick which is embedded on SIM).

Source: vendor data, VisionMobile research

Manufacturers whose handsets shipped with the software pre-loaded and embedded at zero-click distance
Vendor /product Abaxia Mobile Desktop ACCESS NetFront Widgets Celltick LiveScreen Media Cibenix Insprit IntroPAD Nuance T9Nav SurfKitchen Home Legend: = client embedded on handset T = trial deployment S = client embedded in SIM card
T

Amoi

Asumo AudioBenQ (KES) Vox

HTC

Kyocera

LG

Motorola

NEC

Nokia

Palm

Panasonic

Pantech

Sagem

Samsung

Sharp SEMC Toshiba

S S S

S S S

Source: vendor data, VisionMobile research

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10

Abaxia
Profile Founded Locations Employees Ownership 2001 France (HQ), Belarus, Korea, China, Germany 54 Privately held Investors: Xange Private Equity, IDFD Revenue Positioning Tagline AIS products N/A Active Idle Screen solutions provider Abaxia brings you the best spot Mobile Desktop Suite (incl. Mobile Portal and Mobile Finder) Mobile Launch Pad Abaxia Open Platform (AOP) Reference deployments Orange Group, Vodafone Group

device content. This includes user contacts, calendar, inbox and installed applications as well as search into the users social networking accounts (Facebook and LinkedIn). Abaxia Open Platform (AOP) enables the overthe-air delivery of idle screen updates, including custom search keywords. AOP also automatically extracts service usage statistics which it uses to create user profiles. Ad agencies or operators can then target specific user groups for idle screen promotions based on the user profile. Abaxia reports that AOP has already been deployed in all existing accounts. Finally, Abaxias Hub is a technology which enables the integration of 3rd party applications (e.g. Opera, S60, Nokia Widsets) to the Mobile

:: Company overview Founded in 2001, Abaxia is an incumbent vendor of active idle screen solutions. Abaxias core AIS product is the Mobile Desktop Suite, which comprises of Mobile Portal (idle screen replacement for service promotion) and Mobile Finder (a predictive search application for services and local content). Abaxias Mobile Portal has been deployed with Orange Group (pre-loaded in every Orange Signature smartphone), Vodafone Group and MTN South Africa. Abaxia reports that its AIS software has been deployed on more than 21 million mobile handsets through agreements with operators in 31 countries. In 2009, Abaxia is expanding its portfolio in three ways: - on-device and online search embedded on the idle screen - over-the-air update of idle-screen promotions and user profiling (Abaxia Open Platform) - offering idle screen windows for 3rd party miniapplications for combined delivery on the handset (Abaxia Hub). The Search component is embedded on the idle screen and allows rapid search of 0nline on-

Desktop Suite. :: Viewpoint Abaxia has historically enjoyed considerable success with Orange as its single large customer which it has complemented with major tier-1 and tier-2 operator deals in 2008-09, notably Vodafone Group. To stay ahead in the European AIS sector it has diversified its product strategy into 3rd party service aggregation (HUB), dynamic content updating and analytics (AOP) and access into SanDisks distribution network via the Service Delivery Card (SDC). The HUB provides a workaround for gaining access to a large library of widgets (i.e. available services) rather than growing de novo a developer community (in the likes of ACCESS). Abaxia needs to diversify further in order to extend its addressable market beyond the European smartphone territory, which is under siege by OEMs and platform vendors.

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ACCESS
Profile Founded Locations Employees Ownership Revenue Positioning Tagline AIS products Reference deployments 1979 Japan (HQ), China, USA, Korea, Germany, France 1,600 Public (TSE:4813) 27,500m JPY ($286m USD) FY08 Software solution provider for mobile, embedded and consumer electronics Provider of software solutions for mobile and for beyond the PC. NetFront Widgets NTT DoCoMo, Softbank, Willcom

To stimulate the adoption of NetFront Widgets, two versions of the Widget Player (Windows Mobile and S60 beta) have been made available as free downloads for end-users. Apart from the widget platform, the NetFront AIS solution also offers advanced customization features such as the multi-desktop capability i.e. changing the idle screen theme depending on the time of day and device status (e.g. day/night and docked/undocked). In 1Q08 the company announced the first deployment of the widget platform with Japanese operator WILLCOM (1 model by Asumo, 1 by Toshiba and 2 by Kyocera). In 4Q08 ACCESS announced two more commercial

:: Company overview Founded in 1979, ACCESS is a Japanese software vendor whose core product is the NetFront web browser. ACCESSs NetFront has been shipped on just over 600 million mobile devices as of the end of 2008, with an additional 100 million cumulative shipments in embedded devices and consumer electronics. ACCESS first AIS solution was the NetFront Dynamic Menu (NFDM) a UI customization solution with support for pushed content. The product was launched in 2006 but no deployment has been publicly recorded. As of 2008, ACCESS has shifted its idle-screen product focus to its Widgets Player. This is a client software based on the NetFront rendering engine that delivers widget-based user interaction and the web development paradigm to the idle screen. The NetFront Widgets Player supports the W3C Widgets and the OMTP BONDI specifications and is offered as part of the NetFront Client Suite. The Widget Player has been ported to BREW, S60, Windows Mobile and comes with a Windows PC SDK for developers. ACCESS has also launched a widget developer community, albeit one which has received rather mild developer interest.

deployments of its widget platform in Japan with NTT DoCoMo (2 WM models by HTC) and SoftBank (2 models by Sharp and 1 by NEC). In terms of OEM deals, ACCESS announced in early 2009 that its Widget Player will ship with the new Samsung Pixon in selected European countries. ACCESS has also secured a deal with SanDisk for distribution of the Widget Player runtime within SanDisks Service Delivery Cards. :: Viewpoint With NetFront, ACCESS is a dominant player in the Japanese market but also strong in the US (circa 30% market share) and Europe (30% in top-5 European countries). As the web-browser market is being commoditised ACCESS is attempting to diversify in terms of both products and revenue models. Product-wise the Widget Player is a response to its operator customers demand for widget solutions as the next step in the evolution of mobile Internet. Revenue-model wise ACCESS is forging deals with premium content providers (for revenue share) and with SanDisk (for distribution royalties). However, the NetFront browser is not upgradable to the Widget Player and ACCESS weaker position in Europe may dampen product appeal towards operators.

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Celltick
Profile Founded Locations Employees Ownership 2000 UK (HQ), Israel, Russia, Singapore, Brazil, India, Thailand, Vietnam 70 Privately held Investors: Amadeus Capital, Jerusalem Venture Partners Revenue Positioning Tagline AIS products Reference deployments N/A Mobile advertising solutions vendor Millions are clicking! LiveScreen media

Cellticks strategy is to shift to a managed service model, acting as an aggregator and inventory broker between ad publishers and operators. The company reports that 10 operators have opted for the managed solution. According to the company, the revenue from the managed service accounted approximately for 7% of the total revenue for 2008 but is expected to reach 30% for 2009. A typical revenue share scenario would be 50/50 split with the operator and 20/30 between Celltick and the content provider. The vast majority of Cellticks installed base is in
VimpelCom (Russia), AIS (Thailand), Vodafone Essar (India), Globe (Philippines), KievStar (Ukraine), Dialog (Sri Lanka), Claro (multiple OpCos), Vivo (Brazil), Azercell (Azerbaijan), MTS (multiple OpCos), Velcom (Belarus), Singtel (Singapore), Dialog (SriLanka), VMS (Vietnam), Vinaphone, Viettel (Vietnam), Mobicom (Mongolia), Spice (Nepal), Telkomsel, Indosat (Indonesia), Avea (Turkey), Beijing Unicom (China), Movistar, Telefonica (Argentina).

developing countries primarily due to the shorter sales cycle to operators, better support for cell broadcast technology on 2G handsets and the rapid SIM replacement cycles due to the large proportion of pre-paid users. In January 2009 Celltick launched

:: Company overview Founded in 2000, Celltick is an Israeli, VCfunded provider of mobile advertising solutions. Cellticks core product, LiveScreen Media is based on a SIM application which can deliver idle-screen text message pop-ups. The display content includes information (e.g. news, sports), trivia games, advertisements and promotional teasers. The client relies on a cell broadcast server in order to relay the content over the air . When users respond (click) to a message teaser they are either taken to a WAP page, connected to a customer care number representative or receive an SMS with details on the specific offer. Celltick reports that the LiveScreen product has been deployment to over 65 million subscribers, across 45 regional operators including VimpelCom Russia, AIS Thailand and MTS Ukraine. Celltick claims an impressive usage record with over 80 million activated SIM cards and a user retention rate of approximately 80% (after the first month of usage). We estimate that approximately 10m users interact with the service monthly based on the active user base.

livescreen.com, a web-based advertising service which allows third party advertisers to purchase idle screen advertising, locally or globally, in all markets where Celltick's LiveScreen Media platform is operational. :: Viewpoint Celltick tops our AIS chart in terms of active user base (65+ million). However with text-only content and dependence on cell-broadcast technology, Cellticks addressable market lies in developing countries primarily. To address the increasing market share of smartphone and high-end feature phones, Celltick has been developing a smartphone software client to tap into the European market. Nevertheless, current operator market data indicate that the demand for low- and very lowend devices targeted mostly to developing countries is high and steadily increasing giving Celltick a strong potential for expansion of their addressable market. Celltick could also better leverage its existing proposition by extending into user analytics and profiling in order to boost inventory (CPM and CPC) rates.

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Cibenix
Profile Founded Locations Employees Ownership 2001 Ireland (HQ) 26 Privately held Investors: EVP, Enterprise Ireland, Dublin Seed Capital Fund Revenue Positioning Tagline AIS products Reference deployments N/A On-device solutions provider Discovering data services Instant Viewer Instant Launcher Hutchinson 3G (H3G), Vodafone Global, Orascom Group, Bharti Airtel (India)

as previous advertisements and menu updates. Synchronisation with operator and third-party CMSs is also supported. Cibenix provides a server web-based management tool for client, portal menu and content management. The server component can also deliver a personalised content experience through subscriber tracking and profiling. Cibenix Instant Viewer is a menu residing on the idle-screen for quick discovery via deep linking to the operator portal or local applications and content. Cibenix Instant Launcher adds application management features (auto version check and

:: Company overview Founded in 2001, Cibenix is a provider of ondevice portal solutions targeting primarily operators. Cibenix base ODP platform encompasses components for mobile widgets, application management, operator services, customer case and advertising. The product is marketed as a white label client/server solution. Cibenix solutions have been deployed with operators Vodafone Global (mid 2007), Orascom Global (April 2008 and January 2009) and Bharti Airtel India (1H09) across more than 30 country operations.

OTA update, configuration and modification of the applications that are available via the AIS menu). The company reports to have seen a 40-60% average increase in content purchases and 30-50% average increase in online traffic from subscribers with ODP applications, aggregated across all of its customer deployments. Furthermore, Hutchinson 3G (H3G), who deployed the Instant Viewer AIS application across all of its operating countries, reported an average of 2.2 online visits per customer per day. :: Viewpoint

The handset client can be deployed either as an on-device portal or an idle-screen replacement solution and has been ported on S60, UIQ, MIDP2 and Windows Mobile platforms. The client integrates with the handset core applications and features (e.g. messaging, dialler and contacts). The client can be personalised with options for user-defined links, wallpapers, soft-key actions and PIM summary views. Branding and layout authoring is done by Cibenix in-house. The server component integrates with the operators content management system (CMS), SMSC, MMSC, WAP gateway and optionally CRM systems, and pushes dynamic content such

Cibenixs track record (ODP deals with operators across more than 30 countries) is commendable given the relatively small size of the company. The company prides itself on the technology edge and the substantial in-house expertise on cross-device software development. We argue that Cibenix will have to transition away from an arms-length technology platform provider to position itself more as a provider of prt--porter solutions to cater to the increasing numbers of network operators looking for lowest risk, shrink-wrapped, off-the-shelf solutions.

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Insprit
Profile Founded Locations Employees Ownership 2000 Korea (HQ), China 200 Public (KOSDAQ:073130.KQ) Investors (20% of stocks in total): Korea Development Bank (gov.), LG Investments, NEOWIZ, KTF, STK, KDBG 15% treasury stock - 50% public shareholders - 15% management team Revenue Positioning $49m USD FY08 Mobile network infrastructure solutions provider, mobile and embedded software solution provider Inspire with Inspiration IntroPAD SmartPath SKT, KT (Korea) and China Mobile (China)

Mobile with the deployment of an AIS solution with 13 million active subs. The company has been offering IntroPAD as a turnkey platform; however the company has found that the product has required heavy investments for tier-2 and tier-3 operators. As a result, the focus has now shifted on a more lightweight version of the solution and a payper-channel revenue model so as to make the product accessible to smaller operators. According to Insprit, IntroPAD shipments have been boosted from 20,000 in April 2007 to 13 million devices as of March 2009, thanks to the China Mobile deal, which was inked in December 2007. However, no new licensees have been announced from 2008 onwards. :: Viewpoint

Tagline AIS products Reference deployments

:: Company review Insprit is the result of the acquisition of InfraValley by IntroMobile in February 2008. Prior to the acquisition, IntroMobiles core business was multimedia-messaging platforms for tier-1 handset OEMs such as Samsung and LG. InfraValley, which became the Network Solutions unit of Insprit, accounts for 78% of the companys total revenue for FY08. Insprits core product from the IntroMobile legacy is IntroPAD, an AIS solution for discovery and access to handset functionality, user content, operator or 3rd party content. The product features a server component which cafor n be used to update content OTA. The Smartpath product is an extension of IntroPAD for widgetlike service access and discovery via the idle screen. Insprit reference customers for its idle screen solutions are Koreas KT (2nd largest CDMA/WiMax/fixed/IPTV operator) who has deployed widgets in Internet Tablet devices and PCs since 2007; LG Telecom with a deployment of an on-device service launcher; and China

Insprit fits the profile of a successful Korean vendor with limited track record in operator deals outside its home turf. What is also notable is that the majority of the companys revenue does not come from AIS but firstly from network infrastructure and secondly from messaging solutions and system integration. Insprit faces the same issues as Celltick and ACCESS when it comes to closing deals in Europe: 18-month sales cycle and need for strong local presence close to its customers. To further succeed in AIS deployments outside Asia, Insprit needs to expand its commercial matchmaker role into Europe and North American operators especially tier-1 MNOs with bigger budgets and handset purchasing power.

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Nuance
Profile Founded Locations Employees Ownership Revenue Positioning 1993 USA (HQ), Brazil, Europe (11 countries), Israel, China, India, Korea, Japan, Australia 5,000 Public (NASDAQ: NUAN) $900m USD FY08 Speech input, text input, imaging and OCR solution provider for PC, mobile and embedded. The Leading Supplier of Speech Recognition, Imaging, PDF and OCR solutions T9 Nav Trials with t-mobile (US) and Telus (Canada) + two undisclosed OEM licensing agreements.

ported to S60, WM, Android, BREW and most feature-phone operating systems. A downloadable S60 3rd ed. version of T9Nav is marketed directly to consumers for download. In April 2009 Nuance acquired Zi Corp, its main competitor for predictive text input solutions. Zi Corp has its own discovery product via predictive text, called Qix. Qix is an AIS text input and search tool for the discovery of user content, handset features and operator services. According to Nuance, Qix features will be consolidated and marketed under the T9 Nav moniker. The company reports that two AIS trial deployments are currently in progress; one with T-Mobile (US) and one with Telus (Canada) on five device models by HTC and Motorola as well as two inked licensing deals with undisclosed OEMs. The company is also exploring revenue share agreements with operators. The strategy for T9 Nav is to act as an umbrella for indexing all content within the device, through APIs for integration with 3rd party applications. :: Viewpoint Despite its financial might and T9 Navs two year history, Nuance has yet to ink operator deals for the product beyond pilot projects, much like Zi Corp. One of the major hindrances is that the idle screen search product has been seen by the OEMs as competing with their own agenda. Moreover, smartphones and high-end feature phones nowadays come with idle-screen smart search functionality out of the box which questions the value that T9Nav brings. However we believe that Nuance might be able to leverage its market leading position in text input if it can use handset OEMs as the primary resellers and potentially establish win-win revenue share agreements with both OEMs and operators.

Tagline

AIS products Reference deployments

:: Company review Founded in 1993, Nuance is a provider of text input, imaging, voice and OCR solutions for PC, mobile and embedded. The company has built up an impressive roster of software IP through more than 15 acquisitions in the space of three years (including Scansoft 2005, Tegic 2007, VoiceSignal 2007, SnapIn 2008 and Zi Corp 2009). The company boasts the single most widely deployed software product, the T9 predictive text engine, which has been deployed on over 4 billion mobile handsets as of the end of 2008 (see VisionMobiles www.100millionclub.com for more information) The companys AIS product, T9 Nav, was originally launched by Tegic as the T9 Discovery Tool in 2007. The product was rebranded after the acquisition of Tegic by Nuance in late 2008. The T9 Nav product indexes content on a mobile device (music, websites, calendar entries, phone functions, contacts) and makes it available via an idle-screen-resident predictive-text search engine. T9 Nav can also be used for service access & discovery with operator or OEM defined keyword lists. The product has been

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SurfKitchen
Profile Founded Locations Employees Ownership 1999 UK (HQ), Australia, Spain, USA, India, Lithuania 80 Privately held Investors: Accel Partners, Scottish Equity Partners, Argo Global Capital, Add Partners Revenue Positioning Tagline AIS products Reference deployments N/A On-device solutions provider Mobile Internet Platform applications provider SurfKit Home Telstra (Australia; 2Q09)

The first deployment of its AIS solution is with Australian operator Telstra (May 2009) initially with three Sony Ericsson models. Since 2008 SurfKitchen has also announced two more deals one with Cincinnati Bell Wireless for an ODP deployment and one with Smart Communications, Philippines for a storefront product. :: Viewpoint SurfKitchens AIS solution was announced in January 2008 and took 18 months to the first commercial deployment. This highlights the challenge of selling AIS solutions compared to ODPs, which form SurfKitchens vast majority of deployments. SurfKitchen has also delayed productisation of its ODP solution into a robust, off-the-shelf client product until 2008, rather choosing to concentrate on operator customisation work. This has historically resulted in some customer attrition and longer deployment cycles for new operator deals. However, moving forward, SurfKitchen has a sharp vision and is well placed with operator relationships to capitalise on the next S-curves beyond ODP, particularly widgets, AIS and storefronts currently in demand by operators. SurfKitchen also appears to be one of the few software vendors who understand the importance of being less of a technology enabler and more of a commercial gap filler between operators and OEMs.

:: Company overview Founded in 1999, SurfKitchen has been an incumbent on-device portal provider and nearly a generic brand name for that solution category which has expanded into an on-device solutions provider. The company is offering white label client-server on-device solutions targeted to operators. The company reports 20+ operator customers with 12 live deployments and 15 million handsets shipped with its ODP solution across 200 device models. SurfKithens core product is the on-device portal core engine, on which the company has built its product suite: an on-device Application Store (SurfKit StoreFront), a widget runtime (SurfKit Widget), a service usage analytics engine (SurfKit Mediation), a centralized Launcher dashboard and SurfKit Home, an idle-screen service dashboard. SurfKit Home relies on a single software core which also powers SurfKit StoreFront, SurfKit Launcher and SurfKit Widget run-time. SurfKit Home has been ported to S60, Windows Mobile, BREW and Sony Ericssons JP (Java Platform).

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Outlook: Market Trends and Opportunities 2009-2011

The idle screen landscape has changed considerably in 2007-2009.How will it look over the next two years? Where is there room for vendor consolidation and where is there room for innovation?

developed 100-200 people internal software development teams, but we dont see this as denting the demand for AIS solutions much; operator know-how on successfully delivering software solutions across OEMs is still painfully scarse and their learning curve is slow.

| The role of AIS vendors in an

evolving market

Naturally, AIS vendors will also have to morph and adapt in response to the times. Revenue models are shifting clearly away from

The active idle screen market can easily be dismissed as a rapidly shrinking one; idle screen customisation technology is becoming a commodity platform feature while handset OEMs are moving in to claim that same territory. But that would be rushing into conclusions. AIS vendors act as the commercial matchmakers across the disparate camps of network operators and mobile handset manufacturers; operators will always be looking to go a step further in differentiating on the most premium real estate on the handset, i.e. beyond what is available out of the box. For example, some AIS vendors are starting to offer post-sales idle screen management that is not yet available by OEMs. Moreover, as global operators manage regional device customisation requirements more centrally, so the need for AIS vendors will increase as the one-stop agent between the operator group and the manufacturers. European Tier-1 operators like Orange, T-Mobile and Vodafone are developing or have already

per-unit royalties for all pre-load software (i.e. embedded in ROM before the handset is shipped). Software vendors, including AIS vendors will have to follow suit. As such, the more successful AIS solutions will be those that monetise through per-active-user or per inventory (primarily CPA or time-based) revenue models, which are better aligned with the interests of operators and ad publishers. In order to extract value during the post-sales phase, AIS vendors will have to add value in service delivery, service update, user profiling or targeting; here the fundamental premise holds: you can only extract value where you add value. Moreover, AIS vendors will have to move away from selling platform enablers to offering vertical solutions, managed and hosted on behalf of the operator. Such vertical solutions can be built around innovative applications like signature user interactions, intelligent search, service storefronts, phonebook 2.0, inventory analytics, and the idle screen as a feudal system.

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We next discuss these key applications that we believe will be hitting idle screens from 2009.

suited for discovering and accessing new services; a paradigm lovingly associated with widgets. We believe that the icon grid paradigm will be

| Key applications:
innovation on the idle screen
During the last few years we have seen the idle screen function as a launchpad for device functionality, service discovery, advertising and contacts search. Such product features are now becoming commonplace amongst AIS vendor offerings. As technology is becoming less of a differentiating characteristic, we are seeing many new innovative applications surface: Signature interaction paradigms: the increase of handset functionality and applications put unhealthy demands on the idle screen for information compression. How can you cram 100s of features on a screen 2.4 x 4.5 inches? Answer: by innovating with new user interaction paradigms. We have seen user interaction paradigms evolve from soft key, to 4-way navigation, to gesturebased navigation with the Apple iPhone and Palm Pre. Interaction paradigms are particularly important when navigating dense information and this is where we believe there is considerable demand for innovation on the idle screen. Clever interaction paradigms involving sensors (e.g. accelerometer, compass and tilt sensors) will help in two important ways; firstly by adding multiple dimensions to the otherwise 2dimensional idle screen; and secondly by allowing OEMs and operators to create differentiating and potentially exclusive user interaction paradigms. This will be an area of intense research in the next 5 years. Service storefront: The icon grid is becoming the de facto user interaction paradigm for both smartphones and feature phones. Placed on the idle-screen this icon grid paradigm is ideally

increasingly used to implement service storefronts, where each operator service is associated with a icon that links to a web or WAP service or even displays service status as part of the same icon. The service store will revolutionise service discovery and delivery think of the 100s of services today available via USSD, premium SMS and WAP that can tomorrow be exposed as icons or widgets. It will also allow service updates to be reflected on the service store much like the number of unread messages shows up on a Facebook iPhone icon; this should allow service usage to be extended way beyond the famous honeymoon period. Intelligent search: The idle screen is the starting point for all user journeys; it is therefore natural for the idle screen to provide shortcuts into functionality that is used most frequently, such as search - whether it is for contacts, voicemail summaries, free minutes remaining, wheres-my-nearest, whats my Facebook status and many more creative search scenarios. We believe that the idle screen is ideally placed to aggregate all such information from third party sources in the internet cloud, the network and the device. Phonebook 2.0: as the starting point of every user journey, the idle-screen is also the pivotal point for placing the phonebook. We therefore see the idle screen merging in phonebook 2.0 functionality, i.e. integrating not only contacts, but also their location, presence and social networking status. Already, predictive phone book search from the idle screen is becoming commonplace in smartphones such as Nokia Eseries and Windows Mobile devices but also feature phones such as Sony Ericsson K, W and C series models. The transition to phonebook 2.0 is the logical next step.

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Inventory analytics: it is well known that the idle screen is the most valuable real estate for ad inventory. What is less known is that as the starting point for each user task, the idle screen can track the beginning and end of every user journey, whether it is browsing a web site, looking up a contact, making a call or sending a text message. As such, the idle screen is the pivotal point for capturing usage analytics and therefore attaching richer profiling and segmentation information to the inventory. This implies a boost for the CPCs and CPAs on the idle screen,which are already at the highest valuation across the handset. The idle screen as a feudal system: Up until the Middle Ages, the land tenure and political structure in Europe was build around the concept of feuds; pieces of land owned and maintained independently. The idle screen has traditionally been a piece of real-estate that is near-impossible to divide up for the lack of a standard measurement unit; it is common for handset OEMs and operators to hold monthslong disputes on the placement of this service or that Start button on the idle screen. Interestingly, the icon grid paradigm, popularised in the notion of widgets, can be used to divide the real estate of the idle screen into distinct areas owned by different parties (OEMs and operators), much like land is divided up in a feudal system. Such a paradigm is made possible thanks to a new standard unit of measurement - a single icon - for dividing idle screen real-estate. We are seeing idle screen solutions such as Nokias Home Screen adopt this approach. More importantly this will lead to innovative revenue models where the idle screen real estate can be leased or sold by impression, length of time or active usage. This will allow handset OEMs to trade land for a higher handset wholesale price, for a per-icon/per-month lease or a

revenue share off operator services.

| Who will own the screen?

And so we come to the perennial question: who will own the idle screen? Following DoCoMo, SKT, Orange and Vodafone we see all European Tier-1 operators issue RFIs for idle screen solutions, expanding to tier-1 operators in Latin America and the Middle East. These Tier-1 operators will want to leverage their purchasing power to deliver differentiation and accelerated service discovery on the idle screen. Tier-2 and Tier-3 operators will also be opting to customise the idle screen, thanks to variant management (off-the-shelf device customisation) options available by the OEM, starting with Nokias S60, Series 40 and Android devices. The big winner at the end of the day will be the user. A clear trend appearing is the move away from operator-centric customisation to usercentric personalisation. The idle screen will be no exception, where we see the widget paradigms favour user personalisation. In the long run, the idle screen, much like the customers wallet, will not be owned by any single party, but shared. In this economy, best placed are those who provide the technology platform and commercial brokering for service delivery on the idle screen and leasing of real-estate among multiple parties. Whats more, ownership and leasing will not be just about pre-load deals, but about post-sales management of the idle screen. We argue that, what will be important is owning the in-the-hands experience, not the out-of-the-box experience. It is the postsales idle screen management where sustainable value and revenue will be coming from.

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