Telesoft Ventures Don Listwin [email protected].

Telesoft Ventures

Don [email protected]

Telesoft Ventures

Don [email protected]

© 2001 Openwave Systems Inc.

MARKET SCENARIOS

Pessimistic Base Case Optimistic

Handset Replacement Cycles

Next Gen. Network Rollout

Availability of Data Enabled Handsets

Rate of Service Adoption Among

2

1

3

4






2

1

3

4






2

1

3

4






2

1

3

4






2

1

3

4

Base Market Model Case

Probable Storm Perfect Storm <$400M

Probable Wave Perfect Wave >$800M


PROBABLE WAVE

Optimal

Challenging

Slow

Fast

ProductTransitions

FastIndustry Consolidation

Perfect Storm

ProbableStorm

ProbableWave


PROBABLE STORM

Optimal

Challenging

Slow

Fast

ProductTransitions


Assumes: Market Share Constant / ASP Constant

Perfect Storm

Scenario 1

Probable Wave

ProbableStorm


OPENWAVE MISSION

Deliver the Services OS™ software

platform that enables

communication service providers

to rapidly create profitable

Internet-based services.


ANNUAL REVENUE GROWTH

$0

$100

$200

$300

$400

$500

1997 1998 1999 2000 2001

Mill

ion

s


ANNUAL REVENUE GROWTH

$0

$100

$200

$300

$400

$500

1997 1998 1999 2000 2001

Mill

ion

s

85% GM

25¢/share

85% GM

25¢/share


GEOGRAPHIC REVENUE DIVERSITY

June, 2001 September, 2001

Source: Openwave

Americas

EMEA

Japan andAsia-Pacific

ROW

38% 35%

27%

Americas

EMEA

Japan andAsia-Pacific

ROW

30% 35%

35%


SUBSCRIBER GROWTH

1,000M+

189M

125M

906M

25.7M

420M

Mobile Internet Messaging

Active Subscribers

Subs Served by Our Customers

Worldwide Subscribers

Sources: Messaging Online (Year End 2000 Report), Radacati, EMC, CSFB, Operator Press Releases, Openwave Estimates, Morgan Stanley Dean Witter PC Industry Overview March 2001

# Seats Activated

# PCs

# Seats Licensed# Subscribers Licensed40M

+4.1M +5.9M


COMPANY FACTS

2,000+Employees


FINANCIAL PERFORMANCE

$117

$144.7$130.0

$109.7

Dec Mar Jun Sep

2001 2002


FINANCIAL PERFORMANCE

$XXX $YYY

$144.7$130.0

$109.7

Dec Mar Jun Sep Dec

2001

85% GM

(4.6)% Profit Ops

(0.03)¢

85% GM

(4.6)% Profit Ops

(0.03)¢

2002


AGENDA

Industry ModelIndustry Model

Japan’s Success

Global Market

Openwave Technology


INDUSTRY TRANSITION

Internet

Telephony

PSTN

Internet


# of Subscribers

INDUSTRY BUSINESS MODEL

# of Subscribers ProfitabilityNew ServicesVoice

Cost


Content

INDUSTRY

ENTERPRISE

SME

SOHO

CONSUMER

Carrier Data Center

Telephony

Internet

Openwave

De

vice

Pro

du

cts

De

velo

per P

rod

ucts

Communication Services

Platform Services

Mobile Services Infrastructure

Customer Service

Ecosystem Partners


ContentENTERPRISE

SME

SOHO

CONSUMER

Telephony

Internet

Carrier Data Center

Openwave

INDUSTRY SITUATION

Carrier Data CenterData Back Office

Voice


ContentENTERPRISE

SME

SOHO

CONSUMER

Telephony

Internet

Carrier Data Center

Openwave

ENTERPRISE

ENTERPRISE


AGENDA

Industry Model

Japan’s SuccessJapan’s Success

Global Market

Openwave Technology


MARKET MODEL

ContentENTERPRISE

SME

SOHO

CONSUMER

Carrier Data Center

Telephony

Internet

Openwave


0

0

0

0

SUCCESS FACTORS

1Internet

1


ContentENTERPRISE

SME

SOHO

CONSUMER

Carrier Data Center

Telephony

Internet

Openwave

INDUSTRY SITUATION


INDUSTRY PRIMITIVES AND MARKET MODEL: 12% INCREASE IN HANDSET SALES…

Summary

Total Handset Sales 1999 2000 2001 2002 2003 2004 2005 2006

Analog 0 14,553,708 7,490,937 5,368,588 3,121,895 1,915,078 754,731 440,383

2G

CDMA 0 53,997,112 52,239,189 53,315,311 61,064,964 68,446,559 53,644,559 30,127,607TDMA 0 42,008,987 39,232,331 42,171,544 45,297,200 40,859,986 29,673,696 18,909,950

GSM 0 265,055,824 272,589,870 270,655,591 296,522,525 302,705,668 252,800,052 205,573,904PDC 0 27,633,205 24,152,131 22,494,314 24,074,505 23,055,686 20,609,444 14,442,265

2.5GGPRS 0 0 5,481,861 37,998,235 67,679,935 129,950,961 168,612,154 240,027,862

CDMA 1xRTT 0 0 384,307 1,619,178 9,151,907 21,669,048 39,595,176 66,621,499HSCSD 0 0 6,009,276 16,584,902 6,073,003 4,135,375 607,972 391,968

EDGE 0 0 0 1,662,054 3,328,151 7,649,370 9,523,453 13,794,6343G

CDMA 2000 0 0 0 59,040 1,135,026 2,146,069 4,420,467 7,470,454WCDMA 0 0 299,654 6,188,250 13,468,094 38,465,334 74,837,554 147,243,745

Total Digital 0 388,695,128 400,388,619 452,748,420 527,795,311 639,084,054 654,324,527 744,603,887

Total 0 403,248,836 407,879,556 458,117,008 530,917,205 640,999,133 655,079,258 745,044,2710 0 0 0 0 0 0 0

Consistent With Current Analyst Expectations


HANDSETS


BROWSER ENABLED HANDSETS

0

100

200

300

400

500

600

'01 '02 '03

0%

10%

20%

30%

40%

50%

60%

70%

'01 '02 '03

Total Worldwide Handset Shipments (M)

Data-Enabled Handset Penetration


ContentENTERPRISE

SME

SOHO

CONSUMER

Carrier Data Center

Telephony

Internet

Openwave

INDUSTRY SITUATION

Internet


2.5G NETWORKS

Source: EMC, Openwave Analysis

69242

1480

52 258

3 25

Total # CSPs with 2.5G Footprint

1xRTT

GPRSIn Service(Commercial)

139 CSPs 605M Subs100%

GPRS

1xRTT

In Deployment(In Process ofRolling Out)


ContentENTERPRISE

SME

SOHO

CONSUMER

Carrier Data Center

Telephony

Internet

Openwave

INDUSTRY SITUATION

New Services

$15/month

$30/month


“Moore’s Law”

2-way and Global

Network

Secure and Private

Accessible

COMMUNITY STRUCTURE


AGENDA

Industry Model

Japan’s Success

Global MarketGlobal Market

Openwave Technology


INDUSTRY STANDARDS

Optical Standards

SecurityStandards

PresentationStandards

IP StandardsMessagingStandards

IP StandardsMessagingStandards

PresentationStandards

SecurityStandards

Optical Standards

Transport Communication Entertainment Commerce Imaging


MOBILE INTERNET GROWTH


CONTENT

Entertainment

Useful Information

Melodies/Images

Gourmet/Recipes

Shopping/Living

Travel/Traffic/Maps

Credit Card/Securities/Insurance

MobileBanking

News/Weather/

Information

Games/Fortunetelling


DEMOGRAPHICS

20-2424%

25-2920%

30-3412%

35-398%

Over 3927%

Under 207%

Unknown2%


MARKET SCENARIOS






2

1

3

4






2

1

3

4






2

1

3

4






2

1

3

4






2

1

3

4

Base Market Model Case

Probable Storm Perfect Storm <$400M

Probable Wave Perfect Wave >$800M


PROBABLE WAVE

Optimal

Challenging

Slow

Fast

ProductTransitions


Perfect Storm

ProbableStorm

ProbableWave


PROBABLE STORM

Optimal

Challenging

Slow

Fast

ProductTransitions


Assumes: Market Share Constant / ASP Constant

Perfect Storm

Scenario 1

Probable Wave

ProbableStorm


PROBABLE STORM – CY2002

124m 139m 181m 216m 226mMobile Data Subs

Key Drivers Perfect Storm• Replacement rates

fall (US) or stagnate • Significant delays in

NG infrastructure. US falls further behind Europe.

• Failure by vendors to increase number of browser enabled handsets

• Data adoption continues to be slow.

• Nokia stalls M-Services in Europe

Probable Storm• Replacement picks

up as confidence recovers and new models are shipped

• Continued delays in NG rollout. Greatest impact in US

• Data capable hand-sets become more pervasive

• Compelling content continues to be lacking, pushing back adoption by 2 quarters. .

• Europe sees continued use of SMS, causing delays in micro-browser uptake of up to 1 yr

Base Case• Gradual recovery in

handset replacement in all regions ‘02-06.

• Rollout of 2.5G in APAC and Europe in ‘01. US follows ’02. S. America, Asia, Middle East/ Africa ‘03-04

• All 2.5G+ handsets data enabled. Increases in % of new 2G handsets data enabled.

• Among users with data enabled handsets, steady growth in adoption to 60% by 2006 in US, APAC, W.Europe.

• Moderate growth in less developed regions

Probable Wave• Handset replacement

begins to pick up gradually from ‘02

• 2.5G and 3G networks continue present rollout path. 2001 APAC and W.Europe. 2002 US, 2002-3 ROW

• Increase in micro-browser enabled 2G handsets as consumer demand emerges.

• M-Services achieves early success and availability of rich content increases (e.g. Java).

• Data uptake outside Japan accelerates

Perfect Wave• Replacement rates return

to ’99/’00 level. Ongoing growth in Middle East/Africa and C.Asia

• 2.5G rollout accelerates from ’02. Seen in increased share of handset sales.

• Vendors rapidly increase availability of data enabled handsets.

• M-Services takes off in EU. CSPs “get” the concept of ecosystem development. Data uptake accelerates.

• Transition to Japan type penetration rates in Europe, US, Asia

90% C.I.99% C.I.

* Subs defined as at least 1 use per month

CY2001 – 84M


COMMUNITY STRUCTURE

Open Community Messaging


MAJOR MESSAGING PLAYERS

0

100

200

300

400

500

600

700

Yahoo! MSN AOL +ICQ

OPWV Msg.

OPWVMobile

Footprint

OPWVTotal

Millions of Users


GLOBAL MARKET GROWTH

United StatesUnited States

DevelopmentDevelopment

EuropeEurope

DeploymentDeployment

Asia-PacificAsia-Pacific

JapanJapan

ExpansionExpansion


AGENDA

Industry Model

Japan’s Success

Global Market

Openwave TechnologyOpenwave Technology


COMPONENTS

Customer Service

Communication Services

Platform Services

Mobile Services Infrastructure

Mobile Access Gateway /Mobile Services Platform

Email

Dev

ice

Pro

du

cts

Mo

bil

eB

row

se

rD

ev

ice

A

pp

lic

ati

on

s

Develo

per P

rod

ucts

WA

P P

us

h

Lib

rary

SD

K

MobileEmail

UnifiedMessaging

InstantMessaging

MultimediaMessaging

CommerceBroker

SyncManager

Provisioning Manager

DownloadFun

Mobile Messaging Gateway

Ecosystem Partners

Channel Alliances Strategic Alliances Developer AlliancesProduct andTechnology Alliances

Professional Services Customer Support


PLATFORM

Mobile Services PlatformClie

nt

Ap

plic

atio

ns Communication Suite

Customer Life Cycle Management

Develo

per

Allian

ces

Strategic Alliances


CLIENT TECHNOLOGY

Mobile Access MultimediaUser Friendly


UNIFIED MESSAGING

TUI

“You have 3 urgent Voicemail Messages, 6 new Emails…”

Address Book

Notification

Calendar

Messaging


INSTANT MESSAGING

WAP Client

SMS Client

DesktopIM Client

Mobile –Embedded Client


MULTIMEDIA MESSAGING


ASIA’S SUCCESS…


… COMING TO REST OF WORLD

THANK YOU!

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