2007 Q1 Mobile Phone Market Outlook_pa1

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Arima Communications ConfidentialThe above information is sub ect to chan e without further notification

Product Marketing Division

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Creative Design Center

2007 Q1 Mobile Phone Market Outlook


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Contents

Top Five Vendor Shipment

Top Five Vendor Market Share Ranking

Top Five Vendor ASP

Top Five Vendor Operating Margin

Section one: Top Five Vendor Performance

Section two: Top Five Vendor 2007 Q1 Highlight


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Section 1:Top Five Vendor Performance


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5

Top 5 Vendor Shipment YoY Growth

75.3

26.7

13.315.6

34.8

21.8

15.8

46.1 45.4

91.1

21%

-1.50%

30%

64%

1%

0

10

20

30

40

50

60

70

80

90

100

-10%

0%

10%

20%

30%

40%

50%

60%

70%

1Q06

1Q07

YoY

Unit : million

BEST!

Worst!

Source : company data

2007Q1 grew by 7.9% to 245 mn from 227 mn 1Q 06

7.9%


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Top 5 Vendor Shipment QoQ Growth

105.9

32.9

26

17.9

34.8

21.8

15.8

65.7

91.1

45.4

-14%

-31%

-12%-16%

6%

0

20

40

60

80

100

120

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

4Q06

1Q07

QoQ

BEST!

Worst!


Unit : million

- 12.8%

07Q1 fell by 12.8%to 245 mn from 276 mn Q4 06,followed the Q4 buying season

-12.8%


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The above information is sub ect to chan e without further notificationProduct Marketing Division 7

37%

8.90%

6.40%

36.20%34.70%33.00%33.10%32.10%

18.50%

17.70%

20.30%

21.80% 21.10% 21.50%

14.20%11.30%12.00%11.10%12.80%12.50%

9.00%7.80%

6.40%5.80%6.20% 6.30%

6.50%

6.60%6.90%6.70%

15.00%15.70%

17.90%21.10%

21.10%

24.80%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

2005 1Q06 2Q06 3Q06 4Q06 1Q07

Nokia Motorola Samsung SEMC LG Others

Top 5 Vendor Market Share Ranking


2 % Samsung

1 % Nokia

Motorola lost 3 % Top 5 take lions share at 85%.




USD $

196.7

174.6 174.3

164.6

182.1

170.4

158.4

165.0

155.0

161.8

152.1

145.5

155.0

206.1

170.9

145.9

135.2 131.1

140.5145.6

133.1125.3

119.2125.1

129.0

119.4 119.1 121.0

190.1191.6

174.2180.0 181.5

170.5

180.1 181.8187.3 192.0

182.0

100

120

140

160

180

200

220

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07

Nokia Motorola Samsung Sony Ericsson LG

Top 5 Mobile Phone Vendor ASP

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07

Sony

Ericsson190.1 174.2 191.6 206.1 180.0 170.9 181.5 170.5 180.1 181.8 187.3 192.0 182.0

Samsung 196.7 174.6 174.3 164.6 182.1 170.4 158.4 165.0 155.0 161.8 152.1 145.5 155.0

LG 152.9 166.7 167.7 168.2 165.1 149.3 143.7 146.0 121.0 139.0 135.2 138.4

Motorola 161.3 161.1 167.9 155.6 153.8 144.6 144.7 146.2 138.8 137.6 130.8 118.8 119.0

Nokia 145.9 135.2 131.1 140.5 145.6 133.1 125.3 119.2 125.1 129.0 119.4 119.1 121.0

Source: Company Data, March 2007 Note: ASP (Average Sales Price)




Top 5 vendor Handset Sales Revenue

46.80%

17.80%

-16%

-2%-15.50%

4%

- 22.7

- 9.4

- 30.7

-1%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

YoY

QoQ

BEST!

Worst!


BEST!


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Product Marketing Division 10

Top 5 vendor Handset Operating Margins YoY

14.40%12.90%

10.90%

-4.30%

10%

13%

7.60%

12.40%

-2.60%

4.70%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

1Q06

1Q07



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Top 5 vendor Handset Operating Margins QoQ

13.30%

12.90%

4.40%

-4.30%

7%

13%

13.30%

12.40%

4.40%4.70%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

4Q06

1Q07



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Nokia Motorola Samsung SEMC LG

4Q06

(QoQ)

1Q07 1Q06

(YoY)

4Q06

(QoQ)

1Q07 1Q06

(YoY)

4Q06

(QoQ)

1Q07 1Q06

(YoY)

4Q06

(QoQ)

1Q07 1Q06

(YoY)

4Q06

(QoQ)

1Q07 1Q06

(YoY)

Sales 15,913

(-16%)

13,404 12,929

(4%)

7,806

(-30.7%)

5,412 6,403

(-15.5%)

4,741

(-1%)

4,708 4,829

(-2%)

5,144

(-22.7%)

3,978 2,709

(46.8%)

2,859

(-9.4%)

2,589 2,198

(17.8%)

OperatingProfit

2,118

(-18%)

1,730 1,859

(-7%)

341

(NA)

-231 701

(-133%)

385

(72%)

660 506

(10%)

683

(-28%)

492 205

(140%)

125

(-3.2%)

121 -57

(NA)

Operating

Margin

13.3% 12.9% 14.4% 4.4% -4.3% 10.9% 7% 13% 10% 13.3% 12.4% 7.6% 4.4% 4.7% -2.6%

Shipment 105.9

(-14%)

91.1 75.3

(21%)

65.7

(-31%)

45.4 46.1

(-1.5%)

32.9

(6%)

34.8 26.7

(30%)

26.0

(-16%)

21.8 13.3

(64%)

17.9

(-12%)

15.8 15.6

(1%)

MarketShare 245

36.2% 37.1% 35% 21.5% 18.5% 20.3% 11.3% 14.2% 12.7% 9.0% 8.9% 5.87% 6.3% 6.4% 6.88%

ASP 121 121 141 119 119 138 168 155 144.5 197 182 204 135.2 138.4

Source : company data EUR : US = 1.36

KRW : US = 0.0011

Unit : USD million

Top Five vendor performance summary


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Section 2:Top Five Vendor 2007 Q1 Highlight


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BY volume:91 millions, down 14% QoQ, but up 21% YoYBy region: Middle East, Africa, and China were up from theholiday quarter while shipments in Asia/Pacific held steady

Q1 highlight

Market share

Shipments

Remain No.1 King (same level as Q406,up in Q106)

ASP The lower YoY ASP were Impacted by a higher percentage ofentry-level device sales.

Operating Margin

Mobile Phones MultimediaEnterprise Solutions

Business Group

Q1 2006 VS Q1 2007 (YoY)

Increase

(18.4%18.8%)

Decrease

(18.5% 16.8%)

Decrease

(-35.5%-11.7%)

3G


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2007 Q1 first shipment-Nokia 6300

Announce 6110 Navigator and 6131 NFC phone

Nokia music phone-5700 XpressMusic and 5070

LAmour collection-Nokia 7373 and Nokia 7088(First CDMA model)

Introduce Nokia 3110(classic tri-band GSM phone)

Mobile Phones

Multimedia

Enterprise SolutionsBusiness Group

Net sales YoY growth was fastest in Latin America and China.

Net sales growth was driven by Nseries multimedia computer.

Announce smart2go mapping and navigation platform and new N-Gage

mobile gaming platform.

Cooperate with YouTuBe and Six Apart.

3G

GPS

WCDMA HSXPA

Second generation Nokia Eseries (E61i E65 E90)

Nokia Intellisync Mobile Suite 8.0 (new email experience for s60 device)


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Year-on-year volume& sales growth of 63% and 47% respectively

Low and mid-tier products generating market share gains YoY

W880 further strengthens Walkman phone sales.

improvement in Europe, Asia Pacific, and Latin America with its low-

and mid-tier product portfolio (W300 and W200 Walkman phone

/K310 camera phone )

Announce two new Cyber-shot phones, five Walkman models

Q1 highlight

SEMC starts 2007 with strong first quarter

SE W880 SE W610SE W660 SE W580

(9mm)

SE K810 SE K550 SE W200


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Plan to start manufacturing phones in Indiaglobal manufacturing partners

Have completed the acquisition of the Swedishsoftware company UIQ Technology AB (UIQ Holdings )

Signed licensing and development agreementsconcerning entry-level GSM, GPRS and EDGE mobilephones with Sagem Communication (SAFRAN Group)

SEMC made some strategic announcements


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Q1 highlight

MOTO continues to struggle~

Motorola CEO: 2007 Q1 mobile devices business unacceptable Operating Margin:-4.3%, down 9.2% points QoQ/ 15.8% points YoY.

Shipment: 45.4million handset units in 1Q07, down 31% Q/Q and 1.5% Y/Y.

Has suffered weak sales in Europe and has been late to market

with UMTS, hurting its sales and profitability

MOTO may take some actions:

Motorola should shift from market share gain to profitability recovery :MOT has indicated that it would:

1) be overhauling its product portfolios,

2) be more disciplined in pricing action ,

3) work on supply chain cost of goods sold efficiency.

Source: Asia Pacific Equity Research, 19 April 2007 and www.isuppli.com


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Product Marketing Division 19Source: Morgan Stanley, 13 April 2007 and www.isuppli.com

Samsung was the only Top-5 phone brand to increase its unitshipments on a sequential basis in the first quarter. (QoQ base)mainly due to its strong sales growth in Asia

Volume rose on the success of the Ultra Edition II ramp-up and inthe low-end segment, which began production at the start of the year.Best selling products in Q1:D900,E250

LG doesnt lag

Samsung bucked the trend with respectable growth

Did well in the face of weak seasonal shipments. ( 2007Q1 shipment only

declined by 12 percent toward 2006 Q4.)Product mix improvement:

CDMA exports: US still loves ChocolateGSM: Shine take over and iconic Black Label Chocolate series

3G: Steady and Diversified(Largest WCDMA phone customer:Cingular and Vodaphone)

D900 E250

Slider/3M

TFT,BT

Slider/VGA

TFT,BT

Q1 highlight


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Backup Slide

Multimedia


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N955MP, HSDPA, GPS, and WiFi

N76New smartphone

refresh of the N93

N77HSDPA / Wi-Fi /DVB-H N800 Internet Tablet(linux)

Multimedia

E series:business


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E61i E65Slim Business Wonder

E90 CommunicatorHSDPA / Wi-Fi/ GPS

E61

E series:business


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Documents

2007 Q1 Mobile Phone Market Outlook_pa1