CDMA2000:CDMA2000:Insight into Insight into

UltraUltra--Low Cost 3G Devices Low Cost 3G Devices Live WebcastLive Webcast

February 1, 2008

CDMA Development GroupCDMA Development Group

2www.cdg.org

As an IndustryAs an IndustryWe Have Come A Long WayWe Have Come A Long Way

Yet, we still have more opportunities ahead to expand globalYet, we still have more opportunities ahead to expand globalwireless penetration with Ultrawireless penetration with Ultra--Low Cost 3G CDMA HandsetsLow Cost 3G CDMA Handsets

2www.cdg.org

Elements that CreateElements that Createan Ultraan Ultra--Low Cost HandsetLow Cost Handset

StreamlinedStreamlinedTest & CertificationTest & Certification

(CCF)(CCF)

Common HandsetCommon HandsetRequirementsRequirements

(GHRC)(GHRC)

Aggregation ofAggregation ofHandset PurchasesHandset Purchases

ReducedReducedNonNon--Recurring Recurring

Engineering (NRE)Engineering (NRE)

Global StandardGlobal StandardLargeLarge

Economies of ScaleEconomies of Scale(Volume Production)(Volume Production)

ReducedReducedBill of MaterialsBill of Materials

(BOM)(BOM)

Direct to Carrier Direct to Carrier DistributionDistribution

3G For All3G For All

2www.cdg.org

Economies of ScaleEconomies of ScaleThe growing 3G subscriber base is creating enormous economies ofThe growing 3G subscriber base is creating enormous economies of scalescale

Migration of SubscribersMigration of Subscribers

1G1G

2G2G

3G3G

4G4G

More than More than 275275 operators in over operators in over 100100 countries have countries have deployed or are planning to deploy CDMA2000deployed or are planning to deploy CDMA2000

2www.cdg.org

LGRD2330

KyoceraK112

Huawei C218

HaierD1000

JingpengSpektra 101

SamsungN 380

Nokia1255

ZTEC150

SamsungN500

BREWBREW--enabled lowenabled low--end phonesend phones

LGRD2340

LGRD2430

LGRD2530

LGRD2535

UTStarcomC1122

59 entry-level CDMA2000 handsets from 14 suppliersNotes: 1. Mobile devices shown are sold in India at an ex-factory wholesale cost below US$50.

2. Only devices shipped in volumes above 10,000 units are shown.

SubSub--US$50US$50

MotorolaC131

LGRD2530

LGRD2670

SamsungS109

KyoceraKX 17

SubSub--US$40US$40SubSub--US$30US$30

ZTEC 160

LG2750

Rose631

Jingpeng101

TCL401

LGRD2650

LGRD2690

LGRD2710

MotorolaW150i

HaierC1000

HuaweiC2205

JingpengC131

JingpengC132

LG2530

LG3330

Legend: Color Screen HandsetsColor Screen Handsets

ZTE204

ZTE203

ZTE202

Kimpo761

HuaweiC2285

KyoceraKX 122

Haier D1600

Rose632

LGRD 3000

LG3470

HuaweiC2286

KimpoC 731

Nokia 1325

KimpoC762

KimpoC 702

KimpoC 703

KimpoC 732

Huawei 361

HuaweiC2801

HuaweiC2201

KimpoC 701

CDMA2000: Wide Range of Affordable DevicesCDMA2000: Wide Range of Affordable DevicesCompetition and economies of scales are driving prices downCompetition and economies of scales are driving prices down

MotofoneF3C

LGRD 3100

Huawei2900i

SamsungChamp 269

2www.cdg.org

India: VeryIndia: Very--Low Cost CDMA2000 Handset TrendLow Cost CDMA2000 Handset TrendMarket is responding favorably to availability of lowMarket is responding favorably to availability of low--cost CDMA2000 handsetscost CDMA2000 handsets

Source: Yankee Group, India VLE Handsets, January-October 2007

Price Elasticity of VeryPrice Elasticity of Very--Low Cost Handsets is HighLow Cost Handsets is High

(Millions)

$31.10

$28.89 $29.10

$28.44

$29.89

$32.34

$28.65

$29.47

$28.85$29.31

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct$26

$27

$28

$29

$30

$31

$32

$33

Handset Volume Avg. Wholesale Price

SubSub--US$50 CDMA2000 HandsetsUS$50 CDMA2000 HandsetsMonthly Shipment Volume and Average Wholesale Import PriceMonthly Shipment Volume and Average Wholesale Import Price

Ship

men

t Vol

ume

ASP

2007

2www.cdg.orgSource: CDMA Development Group, May 2007

Wholesale Price TrendsWholesale Price TrendsCDMA has reached price parity with GSMCDMA has reached price parity with GSM

CDMA is WellCDMA is Well--Positioned to Meet Future Market RequirementsPositioned to Meet Future Market RequirementsFor UltraFor Ultra--Low Cost HandsetsLow Cost Handsets

2www.cdg.org

3G CDMA: Sub3G CDMA: Sub--US$50 DevicesUS$50 Devices

(Millions)

0255075

100125150175200

2005 2006 2007 2008 2009 2010 2011

Plenty of CDMA2000 devices will be available to deliver affordabPlenty of CDMA2000 devices will be available to deliver affordable 3G servicesle 3G services

SubSub--US$50 CDMA2000 Handset ShipmentsUS$50 CDMA2000 Handset Shipments

Source: Shailendra Pandey, Research Analyst, Mobile Wireless, ABI Research, March 2007

Affordability will continue to expand the reach of 3G CDMAAffordability will continue to expand the reach of 3G CDMA