Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 1384

Unredacted Exhibits to Arnold Declaration ISO Samsung's MSJ by Samsung Electronics America, Inc.(a New York corporation), Samsung Electronics Co. Ltd., Samsung Telecommunications America, LLC(a Delaware limited liability company) re 1256 Order on Administrative Motion to File Under Seal, (Dkt. Nos. 930, 945) (Attachments: # 1 Exhibit 46 to Arnold, # 2 Exhibit 47 to Arnold, # 3 Exhibit 48 to Arnold, # 4 Exhibit 49 to Arnold, # 5 Exhibit 50 to Arnold, # 6 Exhibit 51 to Arnold, # 7 Exhibit 52 to Arnold, # 8 Exhibit 54 to Arnold, # 9 Exhibit 55 to Arnold, # 10 Exhibit 56 to Arnold, # 11 Exhibit 57 to Arnold, # 12 Exhibit 58 to Arnold, # 13 Exhibit 60 to Arnold, # 14 Exhibit 63 to Arnold, # 15 Exhibit 64 to Arnold, # 16 Exhibit 66 to Arnold, # 17 Exhibit 68 to Arnold, # 18 Exhibit 69 to Arnold, # 19 Exhibit 71 to Arnold, # 20 Exhibit 73 to Arnold, # 21 Exhibit 74 to Arnold, # 22 Exhibit 75 to Arnold, # 23 Exhibit 76 to Arnold, # 24 Exhibit 77 to Arnold, # 25 Exhibit 78 to Arnold, # 26 Exhibit 79 to Arnold, # 27 Exhibit 80 to Arnold, # 28 Exhibit 81 to Arnold, # 29 Exhibit 82 to Arnold)(Maroulis, Victoria) (Filed on 7/26/2012) Modified text on 7/27/2012 (dhm, COURT STAFF).

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Highly Confidential - Attorneys' Eyes Only APLNDC-Y0000028751 Highly Confidential - Attorneys' Eyes Only Apple Market Research & Analysis June 2007 The information in this and related documents is strictly Pre-iPhone Launch US Mobile Phone Market Study APLNDC-Y0000028752 Highly Confidential - Attorneys' Eyes Only 3 Method: Apple Market Research worked with Doxus, an independent market research ﬁrm to develop the questionnaire. Doxus ﬁelded a web survey from May 17 to 21 2007 using sample from consumer panels. Data was weighted by carrier, gender and age to reﬂect • Awareness of iPhone, mobile phone brands, and key models • Consideration and likelihood to buy iPhone • Impediments to consideration and purchase of iPhone • Mobile phone users’ relationship with their service provider • Mobile phone use and ownership trends • Purchase decision making • Proﬁling of market segments, including those most likely to buy iPhone Key areas include: Purpose: The purpose of this study is to provide a comprehensive view of the US mobile phone market and especially of the iPhone’s potential. As additional research is conducted on the iPhone, the report will be updated to keep it relevant with any new available information. Why this report? APLNDC-Y0000028753 Previous Current Switching Awareness Consideration Purchase Intent Info Sources Proﬁle Highly Confidential - Attorneys' Eyes Only Service Providers iPhone Previous Current Switching Usage g Purchase Mobile Phones Opportunity Impediments Impact on p iPod Market Understanding the US Mobile Market 4 APLNDC-Y0000028754 Highly Confidential - Attorneys' Eyes Only Building awareness is critical to increase consideration • 60% of the mobile market is aware of the iPhone • 31% are aware that AT&T is the exclusive service provider Those likely to buy iPhone represent a very attractive market segment • They are heavy mobile phone users who are actively engaged with using mobile features beyond calling and texting • 66% own iPods and 22% use Macs • 30% have household incomes above $100K 5 The iPhone enjoys high purchase interest • 24% of the market market will consider purchasing an iPhone • 12% are very or somewhat likely to buy an iPhone • 9% are very or somewhat likely to buy the $499 or $599 iPhone models • 6% have delayed their purchase in anticipation of the iPhone • 4% already have the iPhone speciﬁcally in mind Key Conclusions APLNDC-Y0000028755 (continued) Highly Confidential - Attorneys' Eyes Only 6 iPod owners likely to purchase the 4 or 8 GB iPhone are more likely Apple and AT&T will need to build a long term relationship with customers •Mobile phone owners are not particularly brand-loyal; two-thirds changed the brand of their phone with their most recent purchase •Switching service providers is common and driven by service plans and service-related issues Cost and service provider issues are key inhibitors for those not considering iPhone •24% of those very or somewhat likely to buy will not do so at current prices •29% of the market will not consider iPhone due to a cost-related issue •21% of the market will not consider the iPhone due to service provider issue such as not wanting to switch to AT&T or not wanting to pay an early termination fee due to an existing contract Key Conclusions APLNDC-Y0000028756 Highly Confidential - Attorneys' Eyes Only 7 iPhone awareness is high but consideration needs further development APLNDC-Y0000028757 Highly Confidential - Attorneys' Eyes Only 76% Will not consider iPhone 37% Will consider iPhone 3% 40% NOT aware of iPhone * timeframe was broad and included 36 months or more. 24% Excluded from this study are: Mobile users who do not have a role in mobile purchase decision, aged <15, use mobile phones less than 2 times per week, and do not know when they expect to acquire a new US Mobile Users 39% 21% 60% Aware of iPhone 8 The US Mobile Market as deﬁned in this study includes: Mobile users who have a role in mobile purchase decision, aged >14, use mobile phones at least 2 times per week, and provided 60% of the mobile market is aware of the iPhone and 24% will consider APLNDC-Y0000028758 76% Will not consider Not AT&T customers & not willing to switch 4% AT&T customers or willing to switch Highly Confidential - Attorneys' Eyes Only Likely to buy, but not at these prices 3% Likely to buy 8GB at $599 5% Likely to buy 4GB at $499 4% AT&T Customers or Willing to Switch 12% Likely to buy iPhone 24% Will consider iPhone Not likely to buy 6% 10% Q68/Q71/Q21/Q73/Q82 Summary Table: iPhone Decision Tree Not willing to switch 2% iPhone US Mobile Market The market opportunity for iPhone at tested prices is about 9% of the US 9 APLNDC-Y0000028759 $599 8 GB Model $499 4 GB Model Highly Confidential - Attorneys' Eyes Only Q82. Which of the following statements best describes you? I will mostly buy... Q83.At what price would you most likely buy the Apple iPhone? 5% 4% Those likely to buy iPhone as a percentage of the mobile market: Will not purchase 3% Don’t know Nothing Under $100 $100 to $199 3% 17% 18% 14% 8% $300 to $399 $200 to $299 6% $400 to $498 Those who will not purchase at current prices, will consider at these prices 10 34% Most who say they are likely to buy the iPhone (but not at current prices) would be more receptive at prices below $300 APLNDC-Y0000028760 Aware of iPhone Considering iPhone Highly Confidential - Attorneys' Eyes Only Q72. Are you aware that AT&T/Cingular is the exclusive service provider for the Apple iPhone? US Mobile Phone Likely to Buy iPhone 31% 41% 49% 61% 11 Awareness of AT&T as the exclusive provider is higher among those likely APLNDC-Y0000028761 Aware of iPhone Likely to Buy iPhone Highly Confidential - Attorneys' Eyes Only Q73. Would you be willing to switch from your current service provider to AT&T/Cingular in order to get the Apple iPhone? Considering iPhone 66% 69% 81% Willing to switch to AT&T by those considering iPhone but not currently an AT&T customer Willingness to switch to AT&T is highest among those likely to buy 12 APLNDC-Y0000028762 Highly Confidential - Attorneys' Eyes Only Q68. In addition to the [PIPE: Q62 BRAND NAME ONLY], which of the following mobile phone brands, if any, are you likely to consider? Q69. For which of the following reasons won’t you consider the Apple iPhone? 13 Base = Those Not Considering iPhone 11% 18% Reasons for not considering Apple Too New of a Player Don’t Need Phone with These Features 26% Not Familiar with Apple Base = All Users No 76% 27% 35% Carrier Issues Not Familiar with iPhone 38% Percent considering iPhone Yes 24% Phone Cost Of those that will not consider iPhone, cost & lack of familiarity are APLNDC-Y0000028763 Will not consider iPhone for reasons other Will not consider iPhone due to high cost Nothing Under $100 $100 to $199 5% 7% 3% $300 to $399 $200 to $299 1% $400 to $499 34% 29% Highly Confidential - Attorneys' Eyes Only Q70. You checked “high cost of the phone” as a reason you would be unlikely to consider the Apple iPhone. At what price would you consider buying the Apple iPhone? 14 Will consider iPhone 24% 53% 23% As a percentage of the mobile market Those who will not consider iPhone due to cost, will consider at these prices For those not considering iPhone due to high cost, prices would have to be APLNDC-Y0000028764 Highly Confidential - Attorneys' Eyes Only 15 * Caution, small base N=33 Q71. How likely are you to buy an Apple iPhone the next time you buy a mobile phone? Q74. For which of the following reasons are you unlikely to buy the Apple iPhone? Reasons for not purchasing* 10% Not familiar with Apple N=485 10% 26% Apple too new of a player Not familiar with iPhone 27% 38% Will wait for 2nd generation No need for phone with these features 47% 80% Likely to buy iPhone of those considering it Yes 57% No 43% Carrier Issues Phone Cost Of those considering, but not likely to purchase iPhone, cost and carrier APLNDC-Y0000028765 Highly Confidential - Attorneys' Eyes Only In households with income $75,000 or more Under 35 48% 58% I In households with children Male 16 Employed full time 67% 65% 59% Those likely to buy iPhones are.... APLNDC-Y0000028766 Highly Confidential - Attorneys' Eyes Only Macs Gaming Device (66% Consoles) (46% Portables) MP3 Players (66% iPod) Digital Cameras PCs 17 22% 71% 81% 87% 89% Of those likely to buy iPhone And own many electronic devices APLNDC-Y0000028767 Mountain Highly Confidential - Attorneys' Eyes Only S1A. Where in the US is your primary residence? Midwest Southern Northeast Paciﬁc 18 9% 10% 13% 13% 25% Of those likely to buy iPhone Purchase interest in the iPhone is highest on the West Coast APLNDC-Y0000028768 3 to 5 6 to 8 20% Highly Confidential - Attorneys' Eyes Only Base: Very/Somewhat likely to purchase iPhone Q78. When will you most likely buy the Apple iPhone? Months <3 21% 29% 9 to 11 9% 12 to 23 10% 19 2% 24 or more Don’t know 9% 79% of those who plan to get an iPhone plan to do so within one year, APLNDC-Y0000028769 Highly Confidential - Attorneys' Eyes Only Base: Very/Somewhat likely to purchase iPhone Q79. Have you delayed the purchase of your next mobile phone to wait for the Apple iPhone, or not? Percent who delayed purchase of their next mobile phone to wait for the Apple iPhone No 55% Yes 45% A good portion of likely buyers have delayed their mobile phone purchase 20 APLNDC-Y0000028770 #6 Easy to use - 54% #10 Want the newest cool model - 48% #5 Widescreen display - 57% Highly Confidential - Attorneys' Eyes Only 21 #9 Web capabilities, e.g. Google Maps, etc. - 49% #4 iPod/music playing capabilities - 58% Base: Very/Somewhat likely to purchase iPhone Q76. Which of the following features or reasons are the most important in your decision to purchase an Apple iPhone? #8 Built-in Wiﬁ - 50% #3 Favorable opinion of Apple #2 Device combining phone, iPod, Internet - 6#7 Touch controls - 52% 60% 0% #1 Appearance and design - Design elements are the key drivers APLNDC-Y0000028771 Family or Friends 8% Highly Confidential - Attorneys' Eyes Only Base: Very/Somewhat likely to purchase iPhone Q77. Who will pay for the Apple iPhone? Select all that apply. Who will pay for your iPhone? Myself 94% Employer 3% Other 1% 39% of 15-17 year olds say a family member/ friend will pay 22 Most plan to pay for their own iPhone APLNDC-Y0000028772 Highly Confidential - Attorneys' Eyes Only Base: Very/Somewhat likely to purchase iPhone Q81. Where would you prefer to get the Apple iPhone? * Own Apple products: Mac and/or iPod Preferred acquisition location Apple Online Store 12% 18% AT&T Online Store 18% 33% Don’t know 18% AT&T channel preference gap shrinks among Of those likely to buy, 51% plan to purchase from AT&T and 31% from 23 APLNDC-Y0000028773 Highly Confidential - Attorneys' Eyes Only Base: Very/Somewhat likely to purchase iPhone Q80. How will the Apple iPhone be used? Personal vs. work phone use Mostly Personal, Some Work 63% Mostly Work, Some Personal al Personal 8% Only 29% Most plan to use their iPhone for personal use 24 APLNDC-Y0000028774 Aware of iPhone Considering iPhone Likely to Buy iPhone Highly Confidential - Attorneys' Eyes Only Q86. Have you actively sought information on the Apple iPhone (such as researching on the web, asking friends, looking for articles, etc.), or not? US Mobile Phone 19% 28% 48% 59% Those likely to buy an iPhone are more likely to have sought 25 APLNDC-Y0000028775 36% Blogs that are technology or gadget oriented 24% 15% 17% 19% 21% Highly Confidential - Attorneys' Eyes Only Base: Those who sought information Q87. To which of these sources have you gone seeking more information about the Apple iPhone? Top Information Sources Used Viewed the Macworld keynote introduction Other websites AT&T retail Electronics stores such as Best Buy or Radio Shack 28% 33% Apple retail Friends and family who know about these things 35% 33% Consumer websites or publications AT&T website Technology websites or publications Apple website 26 63% Apple’s website was a top source of information on the iPhone APLNDC-Y0000028776 Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 43% 17% Owns gaming system with Internet connection 31% 22% 18% 11% 8% Own an Apple Mac 21% 66% 60% 42% 31% Owns iPod 57% 30% 25% 21% 17% Household income > $100K 68% 58% 55% 47% 41% Under 35 years old 70% 18% 78% 86% 67% 59% 53% 48% Male Likely to buy 8GB iPhone Likely to buy iPhone Considering iPhone Aware of iPhone US Mobile Market 27 Those likely to buy an iPhone have a signiﬁcantly diﬀerent proﬁle than the APLNDC-Y0000028777 Highly Confidential - Attorneys' Eyes Only 28 Most of the mobile phone market appears to have a stable relationship with service providers APLNDC-Y0000028778 2% 4% 6% Highly Confidential - Attorneys' Eyes Only Q21. Which company provides service for your current mobile phone? Other Virgin Mobile US Cellular Alltel T-Mobile Sprint/Nextel AT&T Verizon 11% 11% 19% 24% 29 25% 80% of the market is controlled by four service About half of all mobile subscribers use Verizon or AT&T APLNDC-Y0000028779 6 to 8 <6 9 to 11 9% 12 to 17 11% 9% 18 to 23 Highly Confidential - Attorneys' Eyes Only Q51. When did you start using [current service provider] as your current mobile phone service provider? Length of time in months that respondent has used service provider 8% 8% 24 to 35 12% 36 or more 42% Only 25% started using their carrier within the past year They have a long-term relationship with their service provider 30 APLNDC-Y0000028780 Input only 4% Had no input d 4% Highly Confidential - Attorneys' Eyes Only Base: Total respondents S9. To what extent, if at all, were you involved in selecting your current mobile phone service provider? Level of inﬂuence in selecting the service provider Only decision maker 65% Shared decision 13% Primary with input 15% The majority were the primary decision maker for selecting the 31 APLNDC-Y0000028781 Somewhat satisfied 39% Q44. Overall, how satisﬁed or dissatisﬁed are you with [PIPE: Q21]? Highly Confidential - Attorneys' Eyes Only 7% Neither satisfied nor dissatisfied Satisfaction with current service provider Very satisfied 47% Somewhat dissatisfied 6% 86% are very or somewhat satisﬁed Very dissatisfied 2% Most are highly satisﬁed with their service provider 32 APLNDC-Y0000028782 T-Mobile 7% AT&T 9% Highly Confidential - Attorneys' Eyes Only Q44. Overall, how satisﬁed or dissatisﬁed are you with [current service provider]? Verizon 4% Bottom-2 box - total dissatisﬁed Sprint/Nextel US Cellular 33 13% 10% Verizon customers have the lowest dissatisfaction ratings among the APLNDC-Y0000028783 4% Contract employer paid 10% 14% Highly Confidential - Attorneys' Eyes Only Q48. Which of the following best describes the nature of your relationship with... 4% No Contract Pre-paid plan Expired contract Contract with penalty Most of the mobile market is on a ﬁxed-term contract 34 66% APLNDC-Y0000028784 1% 4% No Contract Contract employer paid 2% 4% 5% 15% AT&T 79% 9% 2% 1% 17% Sprint/Nextel 73% Highly Confidential - Attorneys' Eyes Only Q48. Which of the following best describes the nature of your relationship with...[current service provider] Verizon 3% 12% Pre-paid plan Expired contract Contract with penalty 4% 4% 10% 21% T-Mobile 69% The larger service providers have a higher percentage of their customers in contract But some diﬀerences exist... 35 59% APLNDC-Y0000028785 2% 1 to 6 24% 7 to 12 26% 13 to 24 35% 14% Highly Confidential - Attorneys' Eyes Only 36 Over 24 Don’t know 1% Months remaining on contract Base: Has a service contract Q49. How long (in terms of months) was your initial service contract with [current service provider] that came with your [current] mobile phone? Q50. How many months remain on your contract with [current service provider]? 13 to 24 Over 24 Don't know 7 to 12 1 to 6 8% 2% 14% 74% Length of initial contract in months Most contracts run for 24 months and half will expire within a year APLNDC-Y0000028786 Yes 52% Highly Confidential - Attorneys' Eyes Only 6% 17% 23% 53% 37 Number of participants on family plan 5 or more 4 3 2 Q53. Are you currently on a family plan (or shared minutes plan) with your service provider? Q54. How many people (including yourself) are on this family plan (or shared minutes plan)? Family plan participation No 47% Don’t Know 1% Slightly more than half of all users are on a family plan APLNDC-Y0000028787 5% 16% Highly Confidential - Attorneys' Eyes Only Q52. Who pays for your mobile phone service? (Select all that apply) Employer Family member or friend I pay for it myself 38 83% The majority pay for their own mobile phone service APLNDC-Y0000028788 $60 - $69 11% 12% Highly Confidential - Attorneys' Eyes Only 9% $80 - $89 Q55. On average, what is the total monthly bill from your service provider? Monthly Bill <$40 12% 20% 8% $100 - $124 15% 5% 39 $150 or more 6% Most have a bill of less than $100 per month APLNDC-Y0000028789 45% 18% 11% 6% 65% 81% 51% 19% 11% 6% 66% 83% 52% Sprint/Nextel subscribers T-Mobile Alltel subscribers Contract with penalty Pay for own service On a family plan Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 83% 24% 25% Verizon subscribers 61% 9% 12% 17% 20% 28% 25% 24% AT&T subscribers Consideri ng Aware of iPhone US Mobile Market 92% 23% 39% 27% 42% 16% 10% 12% 30% Likely to buy 8GB 87% 56% 12% 13% 17% 19% 29% Likely to buy Those who plan to purchase iPhone tend to pay for their own service and are less likely to have a contract or 40 APLNDC-Y0000028790 Highly Confidential - Attorneys' Eyes Only 41 Switching service providers is common and is driven by service plans and servicerelated issues APLNDC-Y0000028791 Switched 32% Highly Confidential - Attorneys' Eyes Only Q46. When you were shopping for your current mobile phone, did you seriously consider changing service providers? Considered switching 18% Did not consider switching 43% First phone 8% 32% switched and 18% considered doing so About one-half switched service provider with the purchase of a new 42 APLNDC-Y0000028792 Have ever switched 57% Highly Confidential - Attorneys' Eyes Only Q45. Have you ever had mobile phone service in the past from any companies other than [current service provider]? Has only used current provider 35% First phone 8% Only slightly over one-third have stayed with their current service 43 APLNDC-Y0000028793 Base: Those who have owned more than one phone Q21. Which company provides service for your current mobile phone? Q12. What company provided service to your previous mobile phone? Highly Confidential - Attorneys' Eyes Only 78% Stayed with service provider when purchasing current phone 55% Sprint/Nextel US Cellular 60% T-Mobile 67% Alltel 61% 68% AT&T Verizon 44 Verizon has the highest percentage of customers to continue with them APLNDC-Y0000028794 Highly Confidential - Attorneys' Eyes Only Q47. What was your main reason for changing from [previous service provider] to [current service provider] when you got your current phone? #5 Purchase a phone from another provider - 6% #4 Customer service - 10% #3 Discount on phone or plan - 15% #2 Service related issues - 30% #1 Preferred service plan - 31% The decision to switch service provider was primarily driven by 45 APLNDC-Y0000028795 23% 43% Preferred service plan Highly Confidential - Attorneys' Eyes Only 33% 31% 14% Service-related issues 19% Sprint AT&T Verizon Reasons for Switching Previous Service Provider v 19% 27% T-Mobile But there are some diﬀerences on why users switched from particular 46 APLNDC-Y0000028796 Probably will Might or might not Probably will not 25% Q65. What is the likelihood that you will switch mobile phone service providers when you get your new phone? Highly Confidential - Attorneys' Eyes Only 21% Definitely will not Likelihood to switch service provider with the acquisition of the next mobile phone Definitely will 8% 14% 29% Don’t know 4% A lower percentage of those who have switched in the past anticipate switching with their next phone 47 APLNDC-Y0000028797 65% 81% 51% 66% 83% 52% 56% 32% 22% Contract with penalty Pays for own service On a family plan Switched service provider ever Switched service provider with current phone Likely to switch service provider with next phone Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 26% 34% 59% Aware of iPhone US Mobile Market 32% 37% 59% 45% 83% 61% Consideri ng iPhone 42% 42% 59% 58% 79% 23% 39% 62% 92% 42% 56% 87% Likely to buy 8GB iPhone Likely to buy iPhone Those who plan to purchase iPhone have higher switching behavior 48 APLNDC-Y0000028798 Highly Confidential - Attorneys' Eyes Only iPhone awareness 49 APLNDC-Y0000028799 Apple iPhone LG Highly Confidential - Attorneys' Eyes Only Q4. Which, if any, of these mobile phone brands are you aware of? Palm Treo 50% 60% % Noki Nokia Sony Ericsson RIM Blackberry n 77% 78% 78% % % Samsu Samsung msu ung 50 Motorola 9 89% 94% 95% % Compared with major mobile phone brands, iPhone total awareness is low APLNDC-Y0000028800 50% 60% 78% 77% Sony Ericsson LG Highly Confidential - Attorneys' Eyes Only Q4. Which, if any, of these mobile phone brands are you aware of? Q5. To what extent are you aware of each of these mobile phone brands? Palm Treo Apple iPhone 78% RIM Blackberry 89% 94% Samsung 95% Total awareness Nokia a lot a fair amount a little in name only Motorola Know Know Know Know The level of brand awareness is low for RIM Blackberry, Sony Ericsson, 51 APLNDC-Y0000028801 25 Nokia E62 25 Palm Treo 650 Motorola Q y RIM Blackberry 8800 Highly Confidential - Attorneys' Eyes Only Q4. Which, if any, of these mobile phone brands are you aware of? Palm Treo 700 23 32 31 Sa amsung Samsung Bla BlackJack 43 R RIM Blackberry Pearl Motorola KRZR 45 LG Choco Chocola pp p pple Apple i h ne iPhon iPhone 44 69 60 However, iPhone awareness is high when compared with other mobile 52 Motor oto o Motorola RA AZ RAZR 84 APLNDC-Y0000028802 44% 43% RIM Blackberry Pearl Highly Confidential - Attorneys' Eyes Only Q4. Which, if any, of these mobile phone brands are you aware of? Q5. To what extent are you aware of each of these mobile phone brands? Palm Treo 700 Palm Treo 650 Nokia E62 RIM Blackberry 8800 Motorola Q Samsung BlackJack Motorola KRZR Apple iPhone LG Chocolate 32% 31% 25% 25% 23% 45% a lot a fair amount a little in name only Motorola RAZR Know Know Know Know 60% 69% 84% Total awareness While total awareness is high, the iPhone and LG Chocolate have a high 53 APLNDC-Y0000028803 Highly Confidential - Attorneys' Eyes Only Base: Aware of iPhone Q9. How did you ﬁrst become aware of the Apple iPhone? Other AT&T/Cingular retail store Service provider’s retail store Other retail store Newspaper advertisement AT&T / Cingular website Magazine advertisement Apple Retail Store Watched the Macworld keynote introduction Magazine article Other website Apple’s website Friend/family member/colleague TV advertisement TV news or show, newspaper article or web news 4% 3% 3% 2% 2% 1% 1% 1% 2% 7% 6% 9% 11% 54 21% 20% TV was by far the primary source for ﬁrst hearing about the iPhone APLNDC-Y0000028804 11% Aware of iPhone 8% Know a lot about Palm Treo 700 12% 18% 58% 31% Highly Confidential - Attorneys' Eyes Only 62% 58% Aware of 6 or more 39% phone models asked b Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 71% 26% 26% 67% 42% 37% 25% 19% 8% Know a lot about RIM Blackberry 8800 53% 19% Likely to buy 16% Consideri ng 11% 47% Know a lot about Motorola 21% 11% 14% 18% 11% Know a lot about RIM Blackberry First became aware of iPhone from family/ f d Know a lot about iPhone US Mobile Market 80% 52% 52% 77% 62% 55% 34% Likely to buy 8GB Those who are likely to consider or buy the iPhone have high awareness 55 APLNDC-Y0000028805 Highly Confidential - Attorneys' Eyes Only Mobile phone ownership 56 APLNDC-Y0000028806 Highly Confidential - Attorneys' Eyes Only Base: Has had more than one mobile phone Q13. What is the brand of your previous mobile phone? Q22. What is the brand of your current mobile phone? Same brand 34% Don’t know 1% Changed brand 65% Most changed brands when purchasing their current phone The mobile phone market does not exhibit much brand loyalty 57 APLNDC-Y0000028807 LG 14% 19% Samsung 1 15% 15% 14% Nokia 26% Highly Confidential - Attorneys' Eyes Only Base for previous: Has had more than one mobile phone Base for current: Total respondents Q13. What is the brand of your previous mobile phone?; Q22. What is the brand of your current mobile phone? Motorola 28% 33% Previous Current 4% Sanyo 3% 4% Kyocera 5% 1% 2% 0% 1% Sony RIM Ericsson BlackBerry Palm Treo 4% 4% Other 5% 5% Among market leaders, Motorola and LG gained, while Nokia lost ground 58 APLNDC-Y0000028808 14% 16% Base: Those who have owned more than one phone Q13. What is the brand of your previous mobile phone? Q22. What is the brand of your current mobile phone? Highly Confidential - Attorneys' Eyes Only 21% 25% 32% Previous brand repurchase rate Palm Treo Sony Ericsson Kyocera Nokia Samsung RIM Blackberrry LG Motorola 42% 40% 49% 59 While brand repurchase rates are low, Motorola’s was highest APLNDC-Y0000028809 Don’t Know 1% Previous base: Has had more than one phone, Q14/Q23. What is the style of your [previous/current] mobile phone? Highly Confidential - Attorneys' Eyes Only Changed 43% Change from previous mobile phone style Same 56% 43% changed styles when purchasing their current phone The mobile phone market is not set on a certain form factor 60 APLNDC-Y0000028810 60% Bar 13% 26% 8 8% 5% PDA/QWERTY 2% 17% Highly Confidential - Attorneys' Eyes Only Previous base: Has had more than one phone Current/Next base: Total respondents Q14/Q23. What is the style of your [previous/current] mobile phone? Q63. What style of mobile phone will you most likely get? Flip 61% 73% Previous Current Next 9% Slider 2% 4% Swivel 1% 2% 3% 3% 3% Other 8% While ﬂip phones will remain the dominant form factor, PDA/QWERTY will grow signiﬁcantly 61 APLNDC-Y0000028811 Sony Ericsson 81 Nokia 84 89 Sanyo 87 Motorola Highly Confidential - Attorneys' Eyes Only Q20. Overall, how satisﬁed or dissatisﬁed are you with your current phone? Kyocera 76 ratings 91 Samsun g 90 LG RIM Blackberr 97 Overall, satisfaction with mobile RIM Blackberry owners report especially high brands is high 62 APLNDC-Y0000028812 69% 45% 65% 43% 5% Have changed brand Have changed style Currently uses pda style w/QWERTY keyboard Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 7% Aware of iPhone US Mobile Market 10% 49% 72% Consideri ng iPhone 12% 49% 72% Likely to buy iPhone 15% 63% 85% Likely to buy 8GB iPhone Those likely to consider or buy the iPhone are more likely to have changed brand or style 63 APLNDC-Y0000028813 Highly Confidential - Attorneys' Eyes Only Mobile phone use 64 APLNDC-Y0000028814 2 21% 3 or more 3% Highly Confidential - Attorneys' Eyes Only S5. How many mobile phones do you use? Please exclude any phones that you borrow. Number of mobile phones used 1 76% The large majority use one mobile phone 65 APLNDC-Y0000028815 6 to 8 10% 9 to 11 10% Highly Confidential - Attorneys' Eyes Only S8. When did you ﬁrst start using your current mobile phone? Months Less than 6 14% Length of use 12 to 17 13% 18 to 23 9% 24 to 35 9% About one-half have used their phone for under 18 months 36 or more 35% 66 APLNDC-Y0000028816 Mostly personal Highly Confidential - Attorneys' Eyes Only S7. Do you use your current mobile phone…? Personal only 38% 50% Mostly work 11% Work only 0% Mobile phones are primarily used for personal purposes 67 APLNDC-Y0000028817 8% 2 to 5 times a day Highly Confidential - Attorneys' Eyes Only S6. About how often do you use your current mobile phone? (Note: Those who use a mobile phone less than 2 to 6 times a week were screened out.) Frequency of use 2 to 6 times a week 6% 36% 51% The majority are relatively heavy users 68 APLNDC-Y0000028818 67% Highly Confidential - Attorneys' Eyes Only Q41. How often, if at all, do you use your [current brand] mobile phone to…? * Of those who send/receive SMS, 60% send 100 or less in an average month. 66% Watch video 75% Connect with a Bluetooth headset Listen to music 76% Take photos 78% 81% Send/receive email Send/receive picture/video mail 82% Connect to Internet (web browser) Send/receive instant messages 92% Play games 85% 94% 93% Send/receive SMS text messages * Use a calendar/scheduling feature Most mobile phones have the capabilities we asked about 69 APLNDC-Y0000028819 30% (N=1,913) 29% 29% Connect with a Bluetooth headset (N=1,518) Take photos (N=1,870) Highly Confidential - Attorneys' Eyes Only Base: Phone has capability to do each feature Q41. How often, if at all, do you use your [current brand] mobile phone to…? Mobile phone feature use (N=1,340) Watch video 15% 32% 20% Play games (N=1,590) 33% 10% 20% (N=1,648) 7% Send/receive picture/video mail 8% 20% 23% Send/receive email (N=1,348) 23% 21% 21% 23% 23% Listen to music (N=1,730) Send/receive instant messages (N=1,671) 24% (N=1,530) Connect to Internet (web browser) 14% 29% 9% 18% 6% 42% 22% (N=1,890) Use a calendar/scheduling feature Send/receive SMS text messages * Once a day + Less than once a day Tried it once Never tried it 18% 12% 10% 30% 8% 58% Among those with the capability, photos and SMS are the most 7% 20% 54% 31% 35% 48% 50% 47% 40% 7% 47% 31% 70 APLNDC-Y0000028820 51% 30% Use mobile phone more than 5 times per day >100 SMS messages sent per month (base: sent/ received SMS messages more than one/twice) 34% 54% 54% Aware of iPhone Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 50% Use current phone for mostly personal but occasionally for business US Mobile Market 42% 64% 62% Consideri ng iPhone 53% 73% 66% Likely to buy iPhone 65% 85% 76% Likely to buy 8GB iPhone Those likely to consider or buy the iPhone are heavy users 71 APLNDC-Y0000028821 Highly Confidential - Attorneys' Eyes Only Purchase of current mobile phone 72 APLNDC-Y0000028822 Input only 3% Highly Confidential - Attorneys' Eyes Only Base: Total respondents; (Note: Those with no purchase inﬂuence were screened from the study.) S9. To what extent, if at all, were you involved in selecting the brand and model of your current mobile phone? Level of inﬂuence in the brand of mobile phone to purchase Only decision maker 74% Shared decision 9% Primary with input 14% The majority were the primary decision maker for which brand to 73 APLNDC-Y0000028823 14% My employer 4% Highly Confidential - Attorneys' Eyes Only Q24. Who paid for your [current brand] mobile phone? (Note: Multiple responses allowed) Who paid for the mobile phone I paid for it myself 81% 3% 74 Most paid for their own mobile phone APLNDC-Y0000028824 Over the Phone 19% 69% Other Total Highly Confidential - Attorneys' Eyes Only Q33. Where/how did you get your [current] mobile phone? 2% 1% From the phone manufacturer 4% 6% - 1% - 13% 19% 5% Online From a reseller/retailer that carries multiple From the service provider In-store or at a retail l i 49% 6% 6% - - - Other 100% 6% 4% 23% 67% Total The majority purchased their current mobile phone from the service 75 APLNDC-Y0000028825 Don’t know 9% Highly Confidential - Attorneys' Eyes Only Q34. When shopping for your [current] mobile phone, did you seriously consider other brands or models? Considered other brands Yes 61% No 31% Nearly two out of three considered other brands when purchasing their current mobile phone 76 APLNDC-Y0000028826 Highly Confidential - Attorneys' Eyes Only Base: Has had more than one mobile phone Q36. What is the main reason you replaced the [current phone] mobile phone you were previously using? Other - 9% Changed service providers - 20% Able to upgrade for free/reduced cost - 23% Previous phone broke/not working - 24% Just wanted a new phone - 24% There are four primary reasons for replacing a mobile phone 77 APLNDC-Y0000028827 Attractive appearance/design - Long battery life - 42% Small size/slim - 44% Built-in camera - 45% Low cost of the phone - 46% The basic style of the phone - 48% Highly Confidential - Attorneys' Eyes Only Q35. Which of the following features or attributes, if any, were most important in your decision to select the [current phone brand] over other mobile phone brands or models? (Note: Multiple responses allowed) 78 Top-2 box Out of 22 attributes asked about, these six were most important in selecting APLNDC-Y0000028828 65% 16% 61% Self selected service provider Spent $200+ on current phone Seriously considered other brands 63% 18% 66% 77% Aware of iPhone Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 74% Self selected mobile phone US Mobile Market 68% 25% 69% 79% ng iPhone 70% 33% 76% 86% buy iPhone 55% 51% 85% 97% buy 8GB iPhone 79 Those who solely select mobile phone brand and service provider are more likely to consider and Consideri iPhone to buy Likely to Likely APLNDC-Y0000028829 Highly Confidential - Attorneys' Eyes Only Purchase of next mobile phone 80 APLNDC-Y0000028830 6 to 8 16% 9 to 11 15% Highly Confidential - Attorneys' Eyes Only S10. When do you expect you’ll get a new mobile phone? Months until purchase of next mobile phone Less than 3 3 to 5 13% 20% 12 to 17 15% 18 to 23 10% 5% 81 24 to 35 36 or more 6% About half of the mobile phone market expects to get a new phone within the APLNDC-Y0000028831 17% 18% 16% $50 to $99 21% 20% 21% 8% $200 to $299 9% 6% Highly Confidential - Attorneys' Eyes Only Q25. How much did your [current] mobile phone cost?; Q64. How much are you willing to pay for your next mobile phone? Free 20% 24% Cost of current mobile phome Amount willing to pay for next mobile phone 10% 7% 82 Don’t know 3% Overall, most of the mobile phone market is willing to spend a similar amount on the next phone as it did APLNDC-Y0000028832 Will change 41% Highly Confidential - Attorneys' Eyes Only 227% 83 151% Percent change of top styles Flip -18% r-34% Bar Slider Q23. What is the style of your [previous] mobile phone?; Q63. What style mobile phone will you most likely get? Style of next mobile phone Will remain the same 59% PDA style with QWERTY Many intend to change the style of PDA and phone slider styles will gain APLNDC-Y0000028833 Q61. Do you already have a mobile phone in mind that you would like to get? Highly Confidential - Attorneys' Eyes Only No 74% Have their next mobile phone in mind Yes 26% Over one-quarter already have their next mobile phone in mind 84 APLNDC-Y0000028834 R RIM Blackberry Pearl Highly Confidential - Attorneys' Eyes Only Base: Have next mobile phone in mind Q62. Which mobile phone would you be most likely to get? Motorola KRZR 6% 7% L LG Chocolate 11% Apple iPhone Any mentions of models by brand: Motorola: 27% LG: 15% RIM Blackberry: 13% 85 Samsung: 8% Palm Treo: 7% M Motorola RAZR 11% 15% Apple iPhone is the top model mentioned by those who already have APLNDC-Y0000028835 5% 19% 18% 16% 16% 15% 13% 13% 9% 8% 24% 28% 28% 47% 47% 45% Highly Confidential - Attorneys' Eyes Only Q68. Which of the following mobile phone brands, if any, are you likely to consider? (Includes brands already in mind) Mobile phone brands to be considered Other NEC Audiovox Toshiba Sharp Phillips Panasonic Kyocera Palm Treo Sanyo Apple iPhone RIM/BlackBerry Sony Ericsson Samsung LG Nokia Motorola 68% 86 Motorola, Nokia, LG, and Samsung are the top brands that will be considered APLNDC-Y0000028836 Low cost Low cost Built-in camera Built-in camera Long battery life Long battery life Highly Confidential - Attorneys' Eyes Only 87 Speakerphone Small size/slim Q35, Which of the following features or attributes, if any, were most important in your decision to select the [current brand] over other mobile phone brands or models? Q67. You told us earlier that you are most likely to get a new mobile phone in [time period]. Which of the following features or attributes, if any, will be most important in your decision of which mobile phone to get? Basic style Next Phone Basic style Current Phone Top attributes APLNDC-Y0000028837 19% 26% Plan to spend $200+ on their next phone Already have a mobile phone in mind 29% 23% 68% Aware of iPhone Highly Confidential - Attorneys' Eyes Only Percentages in larger type are +/- 10 pts. or greater than US Mobile Market 63% Expect to purchase next phone within 12 months US Mobile Market 35% 37% 75% Consideri ng iPhone 45% 49% 81% Likely to buy iPhone 46% 73% 93% Likely to buy 8GB iPhone 88 Those who are considering or are likely to buy iPhone are further along in their decision process APLNDC-Y0000028838 Highly Confidential - Attorneys' Eyes Only 89 iPod owners will purchase iPhones as additions and not replacements APLNDC-Y0000028839 iPod ownership Highly Confidential - Attorneys' Eyes Only D1. Which of these products do you own and use at least once per month? No 69% Yes 31% 31% of the mobile phone market owns an iPod 90 APLNDC-Y0000028840 iPod video capable 35% Highly Confidential - Attorneys' Eyes Only D3. Which iPod model(s) do you currently own and use? iPod ownership nano 44% shuffle 24% mini 15% 9% 91 iPod non video capable Nano is the most popular model among mobile subscribers APLNDC-Y0000028841 Considering iPhone Highly Confidential - Attorneys' Eyes Only Q72. Are you aware that AT&T/Cingular is the exclusive service provider for the Apple iPhone? Aware of iPhone Likely to Buy iPhone 80% 46% 29% 92 iPhone awareness, consideration, and likelihood to buy are high among iPod APLNDC-Y0000028842 Highly Confidential - Attorneys' Eyes Only $499 4 GB Model $599 8 GB Model 10% 11% Of those likely to buy iPhone Will not purchase 4% Will not switch to AT&T 4% A minority will not buy due to cost or switching 93 Among iPod owners who are likely to purchase an iPhone, preference between the two models is similar APLNDC-Y0000028843 Base: Those likely to buy a 4GB or 8GB iPhone who also own iPods D4. If you were to buy an Apple iPhone, it would…? Highly Confidential - Attorneys' Eyes Only Replace 26% iPod disposition Add 68% Don’t Know 6% Most iPhone buyers who own iPods will add to rather than replace their 94 APLNDC-Y0000028844 Highly Confidential - Attorneys' Eyes Only Building awareness is critical to increase consideration • 60% of the mobile market is aware of the iPhone • 31% are aware that AT&T is the exclusive service provider Those likely to buy iPhone represent a very attractive market segment • They are heavy mobile phone users who are actively engaged with using mobile features beyond calling and texting • 66% own iPods and 22% use Macs • 30% have household incomes above $100K 95 The iPhone enjoys high purchase interest • 24% of the market market will consider purchasing an iPhone • 12% are very or somewhat likely to buy an iPhone • 9% are very or somewhat likely to buy the $499 or $599 iPhone models • 6% have delayed their purchase in anticipation of the iPhone • 4% already have the iPhone speciﬁcally in mind Key Conclusions APLNDC-Y0000028845 (continued) Highly Confidential - Attorneys' Eyes Only 96 iPod owners likely to purchase the 4 or 8 GB iPhone are more likely Apple and AT&T will need to build a long term relationship with customers •Mobile phone owners are not particularly brand-loyal; two-thirds changed the brand of their phone with their most recent purchase •Switching service providers is common and driven by service plans and service-related issues Cost and service provider issues are key inhibitors for those not considering iPhone •24% of those very or somewhat likely to buy will not do so at current prices •29% of the market will not consider iPhone due to a cost-related issue •21% of the market will not consider the iPhone due to service provider issue such as not wanting to switch to AT&T or not wanting to pay an early termination fee due to an existing contract Key Conclusions APLNDC-Y0000028846 iPhone Communications Study (Marcom funded - ﬁeld in July) iPhone Buyer Tracker (Start ﬁelding in September) Europe Mobile Phone Market Study (Complete late September) • • • Highly Confidential - Attorneys' Eyes Only iPhone Early Buyer Study (ﬁeld in July) • Additional Research 97 APLNDC-Y0000028847 Highly Confidential - Attorneys' Eyes Only Apple Market Research & Analysis June 2007 The information in this and related documents is strictly Or Apple Conﬁdential • Internal Use Only • Need to Know Basis Arthur Rangel James Imahiro Director Market Research Research Manager arangel@apple.com imahiro@apple.com Pre-iPhone Launch Phone Market Study US Mobile APLNDC-Y0000028848 Highly Confidential - Attorneys' Eyes Only TM and © 2007 Apple Computer, Inc. All rights reserved. APLNDC-Y0000028849

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