CIBC 2008 Handset Guide

Equity Research
Industry Update
January 10, 2008
Communication Technology
Sector Weighting:
2008 Handset Market Guidebook
Market Weight
Market Fundamentals Strong: Raising Estimates
We remain bullish on the wireless market and are raising our handset and
subscriber estimates once again. We project handset shipments will grow
from 1.28B (+13.7% YoY) in 2008 to 1.67B in 2011 and subs will grow from
3.60B to 4.73B in the same period. Overall unit/sub trends are strong.
Tempering our outlook are ASP declines and we look for moderate growth in
industry sales. We expect sell-in revenues to climb 9.8% in 2008 to $150B.
However, after 2008, we see the market cooling and project decelerating
sales growth with a '07-'11 CAGR of 5.9% to $172B in 2011.
Top pick is MOT. While in recovery mode, it can deliver expansion in units,
ASP and margins from late '08, in our view. We have a positive bias on
RIMM, given its tier focus and best in class operating profit to unit share
ratio. Neutral on NOK, as strong execution makes it tough to find upside.
We see great value in owning the supply chain, as it benefits from strong
unit volume and the 3G transition: RF vendors SWKS and RFMD, with
exposure to the top 5 OEMs; QCOM, which benefits from the 3G transition;
and distributor/logistics king CELL, the largest global player in the segment.
All figures in US dollars, unless otherwise stated.
Ittai Kidron
1 (212) 667-6292
George Iwanyc
1 (415) 399-5748
Ittai.Kidron@us.cibc.com
George.Iwanyc@us.cibc.com
Joseph Park
1 (212) 667-8620
08-86920 2008
CIBC World Markets does and seeks to do business with companies covered in
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Investors should consider this report as only a single factor in making their
investment decision.
See "Important Disclosures" section at the end of this report for important
required disclosures, including potential conflicts of interest.
joseph.park@us.cibc.com
See "Price Target Calculation" and "Key Risks to Price Target" sections at the
end of this report, or at the end of each section hereof, where applicable.
Find CIBC research on Bloomberg, Reuters, firstcall.com

and cibcwm.com
CIBC World Markets Corp., 300 Madison Avenue, New York, NY 10017-6204 (212) 667-7000 (800) 999-6726
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2008 Handset Market Guidebook - January 10, 2008
Table of Contents
Executive Summary ................................................................................ 3
Handset Industry Outlook ........................................................................ 5
Handset Shipments .............................................................................. 6
Replacement Rate ................................................................................ 7
Industry Revenue ................................................................................ 8
Handset OEM Trends ............................................................................. 11
Market Share Trends .......................................................................... 11
Financial Trends................................................................................. 13
Nokia ............................................................................................... 18
Motorola ........................................................................................... 20
Samsung .......................................................................................... 22
Sony Ericsson .................................................................................... 24
LG Electronics.................................................................................... 25
Research in Motion............................................................................. 27
Handset Shipments ............................................................................... 29
Handset Shipments by Region ............................................................. 29
North America ................................................................................... 31
Latin America .................................................................................... 33
Western Europe ................................................................................. 34
Eastern Europe .................................................................................. 35
Asia Pacific ........................................................................................ 36
Middle East and Africa ........................................................................ 37
Handset Shipments by Technology ....................................................... 38
WCDMA ............................................................................................ 40
EV-DO .............................................................................................. 41
Smart Phone Shipments ........................................................................ 42
Data Card Shipments ............................................................................ 44
Mobile Subscribers ................................................................................ 45
Subscriber Regional Trends ................................................................. 46
Developed vs. Emerging Markets ......................................................... 48
Penetration Rates............................................................................... 52
North America ................................................................................... 54
Latin America .................................................................................... 55
Western Europe ................................................................................. 57
Eastern Europe .................................................................................. 58
Asia Pacific ........................................................................................ 60
Middle East and Africa ........................................................................ 61
Subscriber Technology Trends ................................................................ 63
Executive Summary
1.13B handsets to ship in

2007E and 1.28B in 2008E
We are raising our handset forecast once again, as the market continues to see
robust demand. We continue to project 2007 global handset shipments of 1,130
million, with 13.8% sequential growth in 4Q07. But we are raising our 2008
handset forecast to 1,284 million, up from our previous estimate of 1,257
million units.
Market growth of 14.6% in

2007E and 13.7% in 2008E
Our revised shipment estimates imply year-over-year (YoY) handset growth of

14.6% in 2007 and 13.7% in 2008. We believe our 2008 projections are higher
than current consensus expectations of around 10% YoY growth. While above
consensus, our estimates still have room for upside, in our opinion, and
we do not view near-term component constraints or U.S. inventory build exiting
4Q07 as a sustained issue in our forecast.
Growth slowing but at a

moderate rate see a 10.2%
shipments CAGR through
2011E
We expect the solid industry growth to continue, with shipments topping 1.66
billion in 2011. This implies a 2007-2011 compounded annual growth rate
(CAGR) of 10.2%. Trends driving demand havent changed, with decreasing
handset and service prices helping increase penetration in emerging markets
and feature rich, multimedia devices spurring replacement activity everywhere.
ASP still dropping, but not a

surprise
With both 2G and 3G handsets seeing new price floors and the overall market
mix seeing a higher contribution from emerging markets, we expect the global
handset average selling price (ASP) to continue to decline throughout our
forecast period. Putting this in perspective, we expect handset ASP to
decline from roughly $121 in 2007 to $117 in 2008 and $112 in 2009.
While declining, our assumptions reflect more modest price pressure than we
have seen in the recent past (3.4% in 2008 vs. 7.4% in 2007).
Revenue growth a step

behind unit growth, with a
5.9% CAGR through 2011E
While we project strong unit growth, the anticipated ASP erosion would drive
global industry sales to moderate growth over the next several years. Our
projections imply strong sales growth in 2008 as modest ASP pressure helps the
market climb 9.8% YoY to $150.1 billion. Keys to 2008 include significant
expansion in the high end (Blackberry, iPhone), the accelerating transition to
3G, and a ramping upgrade cycle in emerging markets (which moves low-end
ASPs up). But after 2008, we see the market cooling and project
decelerating sales growth with a 2007-2011 CAGR of 5.9%.
QCOMs WCDMA targets

conservative
We continue to see a meaningful transition toward 3G, with mature markets

enthusiastically embracing the technology and emerging markets starting to
build networks. We now expect 3G WCDMA shipments to reach 183.5
million in 2007 (+80.8%) and 289.4 million in 2008 (+57.7%). Both
estimates are higher than Qualcomms WCDMA shipment targets of 182 million
for 2007 and 284 million for 2008. By 2011, we see WCDMA shipments climbing
to 724.9 million, a 2007-2011 CAGR of 41.0%.
4 billion subs around the

corner
Were once again raising our mobile subscriber estimates. We now project a
2007-2011 CAGR of 10.9%, with subs increasing from 3.13 billion in 2007
and 3.60 billion in 2008 to 4.73 billion subscribers in 2011. We see 2007 as
the peak year in annual net subscriber adds, with 2008 the first year since
2002 when net-adds decline sequentially.
Emerging markets more

than 78% of total subs in
2011E
Emerging markets, particularly rural areas in India and China, remain the
primary new subscriber growth vehicle. Subscribers in emerging markets
are expected to reach 3.69 billion in 2011, which would constitute
78.1% of total subscribers (vs. 70.5% in 2007). Mirroring the overall market,
we expect emerging market net adds to peak in 2007 with net-adds of 473.6M.
Chinas top spot safe, but

India is closing the gap
We expect India to surpass China as the most important driver of new

subscribers (with India at 88.6M in 2007 and 96.9M in 2008), but China
(80.6M in 2007 and 74.8M in 2008) is still strong and its spot as the top mobile
market (601.2M in 2008) seems safe through the forecast period. These
heavyweights are unchallenged, accounting for 25.7% of total subscribers in
2008 and 36.6% of net-adds, growing to 29.3% and 42.6% in 2011.
Replacement activity
accelerating
We see the global replacement rate rising from 23.1% in 2007 (held down
by surprisingly strong new subs activity) to 30.1% in 2011. This reflects the
combination of lower handset and service prices, improved designs and new
features (mobile TV, WLAN, GPS, and touch screens), and the emergence of
meaningful replacement activity in emerging markets. Replacement volume
would rise from 62.9% of volume in 2008 to 78.5% in 2011.
Motorolas our top pick the

one that can see expansion
in units, ASPs and margins
While the company fell on tough times, MOT is our top vendor pick. The
recovery will be slow, but we are optimistic that the restructuring under way and
a new product portfolio will pay rewards in 2H08/2009. Key to our positive
stance is our belief Motorola can deliver upside to unit shipment expectations
later in the year and is the one OEM positioned to see expansion in three
key areas: shipments, ASPs, and operating margins/profits.
RIM to sustain gains through

the foreseeable future, buy
on weakness
We have a positive bias on RIM, given its focus on the high end (best in
class operating profit share to unit share ratio) and ability to sustain strong
gains for the foreseeable future. RIM is moving beyond enterprise to the larger
consumer market driven by the successful Curve and Pearl platforms. We expect
strong gains in the consumer smart phone segment and think there is still room
for strong enterprise expansion, particularly in international markets.
Nokia - more gains will be

difficult to achieve
Nokia remains the industry benchmark, with an estimated 2007 market

share of 38.5%more than the next three competitors combined. Nokia has the
most share in the largest markets (India and China) and in the fastest growing
regions (Middle East and Africa), and with the most important new technology
(3G WCDMA). It is also effectively using a scale advantage to take a lions share
of industry profits, but with its solid all-round execution, incremental
gains will be difficult to show and it has the most to lose.
Samsung retakes the No. 2

two spot
Samsungs performance has restored its No. 2 share and bodes well for
aggressive 2008 shipment targets. Sony Ericsson and LG are the last of the top
5, coming in at No. 4 and No. 5. All have solid portfolios and are carefully testing
lower-end markets, which could drive unit upside but does put margins at risk.
We also caution that Sony Ericssons multimedia leadership could suffer as
competition intensifies in this segment, and LGs heavier reliance on CDMA
and high customer concentration adds volatility to its performance.
Component vendors to
benefit from solid unit
growth and 3G transition
Derivatives on the strong unit trends include component suppliers Qualcomm,

Skyworks and RF Micro Devices. All should benefit from increasing handset
unit volume, with Qualcomm particularly leveraged to the 3G growth. RFMD
and Skyworks are leaders in the RF space with both having broad exposure to
the top five handset OEMs and likely to see handset Front End Module BOM
rise with the 3G transition. Qualcomms OEM exposure is more focused at LG
and Samsung and potentially gaining share at Motorola and Sony Ericsson.
Brightpoint, Novatel and

Sierra also well positioned
Other well-positioned players include distributor/logistics provider Brightpoint

and data/USB card suppliers Novatel Wireless and Sierra Wireless. After an
acquisition-heavy 2007, Brightpoint is the only vendor with global coverage,
elevating its value in the supply chain, which we believe will generate
above-average returns. NVTLs and SWIRs valuations have compressed on
competitive fears in embedded, but we see these concerns as played out and
with 3G adoption accelerating, we look for strong growth in their core business.
Wireless Communication Vendors

Comparable Valuation Analysis
Company
Rating
Ticker
Large Cap Wireless Equipment Vendors

Alcatel-Lucent
NR
ALU
Ericsson
SP
ERIC
Motorola
SO
MOT
Nokia
SP
NOK
Nortel
SP
NT
UT Starcom
NR
UTSI
Mean
Median
Markt
Cap (M)
CY07E
EPS
CY08E
CY09E
CY07E
P/E
CY08E
CY09E
Tang.
Book/
Share
Net Cash/
Enterp.
Share
Value (M)
CY07E
Sales (M)
CY08E
CY09E
CY07E
EV/Rev
CY08E
CY09E
$15.28
43.41
19.98
42.22
31.79
10.32
$6.42
21.40
14.35
18.87
12.52
2.43
$14,919
34,919
34,289
134,040
6,365
347
$0.14
2.16
0.19
1.98
0.31
(1.77)
$0.63
2.34
0.40
2.40
1.20
(1.18)
$0.91
2.86
1.12
2.72
1.56
(1.56)
47.2x
10.2x
77.8x
17.3x
41.1x
NM
38.7x
41.1x
10.5x
9.4x
37.0x
14.3x
10.6x
NM
16.3x
10.6x
7.3x
7.7x
13.2x
12.6x
8.2x
NM
9.8x
8.2x
($0.13)
7.66
5.60
4.16
0.27
5.30
($0.13)
3.76
1.83
3.31
(2.40)
1.96
$15,222
28,944
30,041
121,063
7,566
110
$24,819
28,563
35,019
67,974
10,988
2,306
$26,228
31,642
34,454
77,745
11,596
2,244
$27,275
33,611
42,997
83,239
12,466
1,795
0.6x
1.0x
0.9x
1.8x
0.7x
0.0x
0.8x
0.8x
0.6x
0.9x
0.9x
1.6x
0.7x
0.0x
0.8x
0.7x
0.6x
0.9x
0.7x
1.5x
0.6x
0.1x
0.7x
0.7x
ANEN
GRRF
PWAV
WJCI
$14.68
$7.12
$3.26
$0.73
$20.13
17.00
7.64
2.00
$13.44
6.61
3.24
0.55
$240
178
426
50
$0.39
0.65
(0.47)
(0.12)
$1.03
0.77
(0.07)
(0.02)
NA
0.92
0.17
NA
37.6x
11.0x
NM
NM
24.3x
24.3x
14.3x
9.2x
NM
NM
11.7x
11.7x
NA
7.7x
19.2x
NA
13.5x
13.5x
$7.81
8.14
(0.13)
0.22
$2.18
(0.14)
(1.17)
0.19
$205
181
579
37
$132
145
775
43
$139
189
883
49
NA
235
980
NA
1.5x
1.2x
0.7x
0.8x
1.1x
1.0x
1.5x
1.0x
0.7x
0.7x
1.0x
0.8x
NA
0.8x
0.6x
NA
0.7x
0.7x
ANAD
QCOM
RFMD
SWKS
TXN
TQNT
$9.20
$37.79
$4.94
$7.69
$30.48
$5.41
$19.53
47.72
8.60
9.55
39.63
7.08
$8.40
35.23
4.73
5.56
28.24
3.77
$558
64,394
1,124
1,227
44,135
771
$0.40
2.11
0.36
0.52
1.80
0.26
$0.67
2.25
0.35
0.70
2.10
0.42
$0.91
2.52
0.47
0.85
2.36
NA
23.0x
17.9x
13.7x
14.8x
16.9x
20.8x
17.9x
17.4x
13.7x
16.8x
14.1x
11.0x
14.5x
12.9x
13.8x
13.9x
10.1x
15.0x
10.5x
9.0x
12.9x
NA
11.5x
10.5x
$3.86
8.13
2.92
1.83
7.06
3.41
$2.17
4.29
0.37
(0.29)
2.53
1.23
$426
57,086
1,039
1,272
40,466
596
$230
9,242
1,026
755
13,859
475
$296
10,375
1,315
859
14,673
535
$343
12,010
1,435
946
15,678
NA
1.9x
6.2x
1.0x
1.7x
2.9x
1.3x
2.5x
1.8x
1.4x
5.5x
0.8x
1.5x
2.8x
1.1x
2.2x
1.5x
1.2x
4.8x
0.7x
1.3x
2.6x
NA
2.1x
1.3x
AIRN
ALVR
CRNT
HSTX
VYYO
$1.11
$8.44
$10.70
$16.76
$2.43
$5.05
15.21
21.89
22.40
9.17
$1.01
6.03
5.11
14.85
2.38
$47
551
348
979
45
($0.43)
0.14
0.49
0.69
(1.81)
($0.22)
0.34
0.65
1.33
(1.18)
$0.06
0.59
0.81
1.41
(0.13)
NM
60.3x
21.8x
24.3x
NM
35.5x
24.3x
NM
24.8x
16.5x
12.6x
NM
18.0x
16.5x
18.5x
14.3x
13.2x
11.9x
NM
14.5x
13.8x
$1.52
2.22
2.04
5.06
(1.20)
$0.95
1.92
1.11
1.01
(1.18)
$7
425
312
920
67
$95
234
161
671
8
$114
287
206
717
38
$167
362
241
756
89
0.1x
1.8x
1.9x
1.4x
8.1x
2.7x
1.8x
0.1x
1.5x
1.5x
1.3x
1.8x
1.2x
1.5x
0.0x
1.2x
1.3x
1.2x
0.8x
0.9x
1.2x
SO
NR
SP
SO
NVTL
PALM
RIMM
SWIR
$14.19
$5.45
$98.55
$13.68
$29.14
19.50
137.01
28.10
$10.33
5.20
39.92
12.81
$468
574
56,538
379
$1.37
0.35
1.92
1.36
$1.50
(0.28)
3.31
1.42
$1.78
0.05
4.35
1.64
10.4x
NM
15.6x
51.3x
10.1x
21.8x
13.0x
9.5x
NM
29.8x
9.6x
16.3x
9.6x
8.0x
109.0x
22.7x
8.3x
37.0x
15.5x
$6.02
(0.28)
5.65
6.19
$3.95
(1.02)
2.77
6.43
$338
681
54,949
201
$435
1,522
5,057
430
$521
1,336
8,638
508
$594
1,562
11,381
586
0.8x
0.4x
10.9x
0.5x
3.1x
0.6x
0.6x
0.5x
6.4x
0.4x
2.0x
0.6x
0.6x
0.4x
4.8x
0.3x
1.5x
0.5x
SO
SP
CELL
QXM
$14.12
$7.91
$18.28
15.48
$10.06
6.76
$716
415
$0.72
1.46
$1.12
1.57
$1.37
1.80
19.6x
5.4x
12.5x
12.5x
12.6x
5.0x
8.8x
8.8x
10.3x
4.4x
7.4x
7.4x
($1.27)
2.99
$781
258
$4,098
434
$5,792
531
$6,684
642
0.2x
0.6x
0.4x
0.4x
0.1x
0.5x
0.3x
0.3x
0.1x
0.4x
0.3x
0.3x
Wireless Semiconductors
Anadigics
NR
Qualcomm
SO
RF Micro Devices
SO
Skyworks
SO
Texas Instruments
SP
TriQuint
NR
Mean
Median
Wireless Broadband Equipment
Airspan
NR
Alvarion
SP
Ceragon
SP
Harris Stratex Ntwks.
SO-S
Vyyo
NR
Mean
Median
Other Wireless
Brightpoint
Qiao Xing Mobile
Mean
Median
52-Week
High
Low
$6.61
$21.97
$14.79
$34.20
$12.73
$2.87
Infrastructure Subsystems
Anaren Microwave
NR
China GrenTech
SP
Powerwave
SP
WJ Comm.
NR
Mean
Median
Wireless Data Products

Novatel
Palm
Research In Motion
Sierra Wireless
Mean
Median
Price
01/09/08
Source: Company reports and CIBC World Markets estimates. For companies not under CIBC coverage, EPS and revenue estimates are from First Call .
$11.66
5.92
Exhibit 1.
Handset Industry Outlook

Handset Shipments
We present our worldwide mobile handset forecast by six regions: North
America, Latin America (including the Caribbean and Mexico), Western Europe,
Eastern Europe, Asia-Pacific, and the Middle East and Africa (MEA). We segment
mobile handsets into emerging markets and mature markets:
Emerging markets include Latin America, Eastern Europe, MEA, and

portions of Asia Pacific.
Mature markets include North America, Western Europe, and the following
countries from Asia Pacific: Australia, Hong Kong, Japan, Korea, New
Zealand, and Taiwan.
Raising our 2008 worldwide

forecast to 1.28 billion units
While our 2007 worldwide handset forecast remains 1,130 million (up
14.6% YoY), were raising our 2008 estimate to 1,284 million (up 13.7%
YoY) from the prior 1,260 million. Were also updating our estimates for each of
the next three years with handset shipments reaching 1.67 billion in 2011.
CAGR dropping to 10.2% for

07-11E from 21.9% in 0307E
We project a healthy 2007-2011 handset shipment CAGR of 10.2%, with doubledigit growth in 2007-2009 followed by moderating growth in 2010 and 2011.
The key factors in our forecast include continued new subscriber growth and a
consistently strong replacement market. The 10.2% 2007-2011 CAGR compares
to the CAGR of 21.9% from 2003-2007, which benefited from a particularly
robust period of new subscriber additions in emerging markets.
Based on size and growth prospects, the strongest opportunity for handset
growth remains Asia Pacific. This region accounts for approximately 41.8%
of 2008E handset shipments and has a 2007-2011 CAGR of 13.9%. The growth
comes from a mix of mature markets with high replacement rates, such as
Japan and South Korea, and still emerging markets like India and Indonesia.
Exhibit 2.
Worldwide Mobile Handset Shipments

1,800,000
35%
1,600,000
30%
'03-'07 CAGR
of 21.9%
Thousands of Users
1,400,000
25%
1,200,000
20%
1,000,000
15%
800,000
10%
'07-'11 CAGR
of 10.2%
600,000
5%
400,000
0%
200,000
-5%
-10%
2001
2002
2003
2004
Source: Company reports and CIBC World Markets Corp.
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E)
Exhibit 3.
Total Handset Shipments by Region
2001
North America
64,283
Latin America
33,734
West Europe
101,701
East Europe
24,591
Asia Pacific
135,953
MEA
23,199
Total
383,460
Growth
-6.7%
Source: CIBC World Markets
2002
80,905
31,938
125,046
34,700
148,488
26,644
447,722
16.8%
2003
80,784
45,234
123,694
48,782
174,598
38,947
512,038
14.4%
2004
101,988
75,860
140,795
68,047
218,570
58,235
663,496
29.6%
2005
122,226
94,216
155,422
76,542
268,181
93,686
810,273
22.1%
2006
142,790
106,596
169,166
105,238
355,707
106,200
985,698
21.7%
2007(E)
153,509
119,149
179,616
115,192
443,101
119,105
1,129,671
14.6%
2008(E)
165,190
131,935
190,522
125,675
536,952
133,942
1,284,216
13.7%
2009(E)
177,085
142,261
201,087
134,926
622,351
153,555
1,431,266
11.5%
2010(E)
185,384
150,135
211,466
143,534
684,950
172,411
1,547,880
8.1%
(Thousands of Units)
2011(E) CAGR 03-07 CAGR 07-11
190,338
17.4%
5.5%
157,505
27.4%
7.2%
220,927
9.8%
5.3%
152,784
24.0%
7.3%
746,787
26.2%
13.9%
197,984
32.2%
13.5%
1,666,325
21.9%
10.2%
7.7%
Exhibit 4.
Total Handset Shipments by Region (% of Total Market)
2001
2002
2003
North America
16.8%
18.1%
15.8%
Latin America
8.8%
7.1%
8.8%
West Europe
26.5%
27.9%
24.2%
East Europe
6.4%
7.8%
9.5%
Asia Pacific
35.5%
33.2%
34.1%
MEA
6.0%
6.0%
7.6%
Total
100.0%
100.0%
100.0%
China and India are the

foundation
2004
15.4%
11.4%
21.2%
10.3%
32.9%
8.8%
100.0%
2005
15.1%
11.6%
19.2%
9.4%
33.1%
11.6%
100.0%
2006
14.5%
10.8%
17.2%
10.7%
36.1%
10.8%
100.0%
2007(E)
13.6%
10.5%
15.9%
10.2%
39.2%
10.5%
100.0%
2008(E)
12.9%
10.3%
14.8%
9.8%
41.8%
10.4%
100.0%
2009(E)
12.4%
9.9%
14.0%
9.4%
43.5%
10.7%
100.0%
2010(E)
12.0%
9.7%
13.7%
9.3%
44.3%
11.1%
100.0%
2011(E)
11.4%
9.5%
13.3%
9.2%
44.8%
11.9%
100.0%
China and India in particular provide a strong foundation. Even with all the
growth in China in the past several years, penetration is still a modest 40.3%
and Indias is a much lower 20.5%. This suggests that robust new subscriber
additions to handset shipments are still viable and complemented by a growing
replacement market in both countries as well.
The other five regions are relatively well balanced in share of 2008E worldwide
shipments, with North America accounting for about 13%, Latin America 10%,
Western Europe 15%, Eastern Europe 10% and MEA 10%. Looking beyond
2008 we expect Asia and MEA to grow as a percentage of total
shipments, with all of the other regions declining slightly.
Replacement Rate
79.2% of handset shipments

in 2011E are replacements
As weve already noted, it is increasingly difficult to find new subscribers in the

mature wireless markets and many emerging market countries are seeing
growth rates moderate. As a result, the largest force in future handset shipment
growth is replacement handset purchases by current subscribers. Of the 1.28
billion handsets we expect to ship in 2008, 814.7 million, or 63.4%, are
replacement purchases. We expect the gap between new and replacement
shipments to continue to widen, with 79.2% of handset shipments in
2011 being replacements.
Replacement rate to reach

30.1% in 2011E
We also see the rate of replacement purchases increasing. We calculate

replacement rate based on the total number of replacement handsets shipped in
any given year versus the total number of mobile subscribers in the prior year.
Based on this definition, we expect the 2008 replacement rate to be
26.0%, up from 23.1% in 2007. Further out, we expect the replacement rate to
slowly increase, with the market reaching 30.1% in 2011.
Exhibit 5.
Replacement Handset Shipments by Region
2001
2002
North America
42,939
68,038
Latin America
12,486
16,156
West Europe
62,857
106,381
East Europe
2,948
9,106
Asia Pacific
38,989
44,769
MEA
4,870
6,341
Total
165,089
250,792
Growth
0.6%
51.9%
2003
61,609
20,900
97,230
15,509
66,779
10,863
272,889
8.8%
2004
78,939
27,518
110,768
22,520
92,990
15,523
348,258
27.6%
2005
91,638
25,486
121,348
45,916
120,029
18,787
423,204
21.5%
2006
113,511
38,000
131,261
58,136
128,159
15,925
484,992
14.6%
2007(E)
132,944
53,716
154,342
80,359
149,291
29,801
600,453
23.8%
2008(E)
151,967
80,403
171,069
98,203
262,318
50,718
814,677
35.7%
2009(E)
167,524
107,804
186,487
112,164
370,810
75,456
1,020,244
25.2%
2010(E)
178,560
125,722
200,749
123,491
450,076
99,169
1,177,767
15.4%
2011(E) CAGR 03-07 CAGR 07-11
184,017
21.2%
8.5%
134,898
26.6%
25.9%
211,139
12.2%
8.1%
133,548
50.9%
13.5%
526,297
22.3%
37.0%
129,785
28.7%
44.5%
1,319,683
21.8%
21.8%
12.0%
Exhibit 6.
Handset Replacement Rate By Region
2001
North America
36.7%
Latin America
19.7%
West Europe
25.8%
East Europe
10.6%
Asia Pacific
16.8%
MEA
11.8%
Total
22.7%
2002
49.2%
19.1%
37.6%
18.4%
13.6%
10.6%
26.6%
2003
40.8%
20.8%
32.3%
20.7%
15.4%
13.6%
23.9%
2004
46.3%
22.1%
33.8%
20.8%
17.2%
14.4%
25.2%
2005
47.4%
14.7%
33.9%
28.6%
18.0%
12.5%
24.9%
2006
50.7%
15.7%
33.5%
28.5%
15.7%
7.1%
23.1%
2007(E)
53.0%
17.4%
36.1%
32.2%
14.4%
9.1%
23.1%
2008(E)
56.0%
21.5%
37.8%
34.6%
19.7%
12.2%
26.0%
2009(E)
58.9%
25.3%
39.5%
36.0%
23.1%
15.1%
28.3%
2010(E)
60.7%
27.3%
41.2%
36.9%
24.2%
17.2%
29.4%
2011(E)
61.2%
27.8%
42.4%
37.7%
25.1%
20.0%
30.1%
Factors we see contributing to a higher replacement rate include:
New features - New functionality at lower prices remains an important

catalyst prompting many users to upgrade their current handsets. Features
we consider particularly important include 2-5 megapixel cameras,
MP3/music players, video/mobile TV players, and WLAN. We also note a
trend toward touch screen devices (facilitating mobile email, web browsing
and other data intensive applications) and GPS/location based services. GPS
isnt new, but with Nokias pending acquisition of NAVTEQ and new visibility
coming from Googles Android platform, we are bullish on GPS seeing
broader support and improved capability.
Accessorizing - Handsets have become fashion accessories for some and

as styles change many choose to upgrade. Contributing factors here include
improved form factors (thin, slide, click), other style changes (color
variations, lighting effects), and fashion branding (such as Prada (LG) and
Armani (Samsung)).
Emerging markets As penetration rates increase in emerging markets,

user sophistication has also increased. As a result, we see a ramping
replacement opportunity in emerging markets as users replicate the buyer
behavior we take for granted in mature markets. This is already
contributing, but should accelerate in the later years of our forecast.
Industry Revenue
ASP erosion would make for
lower revenue growth
While we are still positive on handset shipments growth through 2011, we

expect declining ASPs to produce lower revenue growth for the handset
industry as a whole. We believe investors will have to pay more attention to
this point, which we consider a better tool than pure handset unit share
gains/losses to evaluate the prospects of the individual OEMs. Therefore, we

have shifted our analysis to focus on these points.
Handset sales of $136.6B in

2007E growing to $172.2B in
2011E
We expect revenue from handset sales into the channel to top $136.6
billion in 2007, up 6.1% from the $128.8 billion in 2006. In 2008, we expect
sales to be $150.1 billion, which reflects a 9.8% annual increase and
more modest price pressure given supply constraints entering the year and an
expansion of the high-end market. By 2011, we project total market revenue to
reach $172.2 billion, or a 2007-2011 CAGR of 5.9%. This modest growth
outlook is in contrast to a much stronger 2003-2007 CAGR of 13.2%, which
included several years of much stronger unit volume growth, particularly in 2004
(+29.6%), 2005 (+22.1%) and 2006 (+21.7%).
Worldwide handset ASP of

$121 in 2007E, falling to
$103 in 2011E
Our 2007 market revenue estimate assumes a worldwide ASP of $121.

Our checks show that the highest ASP is in West Europe at $173 and the lowest
is in Latin America at $82 (Asia has the very high highs (Japan and Korea) and
lows (India and China)). As vendors push further into emerging markets and try
to spur replacement purchases, regional ASPs should show a steady decline over
the next several years with a worldwide ASP of $103 in 2011, which includes
a regional high of $155 and a low of $70.
Built into our declining ASP assumptions is continued strong volume growth in
emerging markets, which puts pressure on ASP as mix shifts down toward more
low- and mid-tier handsets. We also anticipate that price floors for each price
tier will slip some. In general, higher-end functionality (3G HSPA, 5MP
cameras) is coming at lower and lower prices as volumes rise.
Factors moderating price pressure and the reason we see a relatively modest
pricing environment overall relative to last few years include (1) a growing
contribution from 3G, (2) exploding smart phone market, and (3) a strong
replacement cycle in the low end of the market, which tends to make for higher
ASPs (i.e., the first $40 handset purchased will be replaced with a $60 handset).
More aggressive price

declines could drive unit
shipments
We note that more aggressive ASP declines would likely be positive for unit
volumes and produce further penetration in emerging markets, accelerating (or
at least supporting) handset replacement. Thus, if our ASP assumptions are too
optimistic, our revenue estimates could still be about right (units higher as ASPs
are lower).
Exhibit 7.
Total Handset Revenue by Region
2003
2004
North America
$15,107
$17,542
Latin America
4,795
7,586
West Europe
24,739
27,596
East Europe
5,171
7,009
Asia Pacific
28,285
33,004
MEA
5,063
7,338
Total Revenue
$83,159 $100,074
Revenue Growth
20.3%
2005
$18,456
8,762
29,530
7,578
38,618
11,242
$114,186
14.1%
2006
$21,133
9,274
30,619
9,787
46,598
11,363
$128,774
12.8%
2007(E)
$22,259
9,770
31,074
10,022
51,843
11,672
$136,639
6.1%
2008(E)
$23,292
10,423
32,960
10,557
60,139
12,724
$150,095
9.8%
2009(E)
$24,261
10,812
33,582
11,064
66,592
14,281
$160,590
7.0%
2010(E)
$24,656
10,660
34,046
10,909
69,865
15,517
$165,652
3.2%
(Millions of $)
2011(E) CAGR 03-07 CAGR 07-11
$24,934
10.2%
2.9%
11,025
19.5%
3.1%
34,244
5.9%
2.5%
11,000
18.0%
2.4%
73,932
16.4%
9.3%
17,027
23.2%
9.9%
$172,162
13.2%
5.9%
3.9%
Exhibit 8.
Total Handset Revenue by Region - % Contribution

2003
2004
2005
North America
18.2%
17.5%
16.2%
Latin America
5.8%
7.6%
7.7%
West Europe
29.7%
27.6%
25.9%
East Europe
6.2%
7.0%
6.6%
Asia Pacific
34.0%
33.0%
33.8%
MEA
6.1%
7.3%
9.8%
Total
100.0%
100.0%
100.0%
2006
16.4%
7.2%
23.8%
7.6%
36.2%
8.8%
100.0%
2007(E)
16.3%
7.2%
22.7%
7.3%
37.9%
8.5%
100.0%
2008(E)
15.5%
6.9%
22.0%
7.0%
40.1%
8.5%
100.0%
2009(E)
15.1%
6.7%
20.9%
6.9%
41.5%
8.9%
100.0%
2010(E)
14.9%
6.4%
20.6%
6.6%
42.2%
9.4%
100.0%
2011(E)
14.5%
6.4%
19.9%
6.4%
42.9%
9.9%
100.0%
Exhibit 9.
Handset ASP by Region
2003
North America
$187
Latin America
106
West Europe
200
East Europe
106
Asia Pacific
162
MEA
130
Total
$162
ASP Growth
2004
$172
100
196
103
151
126
$151
-7.1%
2005
$151
93
190
99
144
120
$141
-6.6%
2006
$148
87
181
93
131
107
$131
-7.3%
2007(E)
$145
82
173
87
117
98
$121
-7.4%
2008(E)
$141
79
173
84
112
95
$117
-3.4%
2009(E)
$137
76
167
82
107
93
$112
-4.0%
2010(E)
$133
71
161
76
102
90
$107
-4.6%
2011(E) CAGR 03-07 CAGR 07-11

$131
-6.2%
-2.5%
70
-6.2%
-3.9%
155
-3.6%
-2.7%
72
-4.8%
-4.6%
99
-7.8%
-4.1%
86
-6.8%
-3.2%
$103
-7.1%
-3.9%
-3.5%
Exhibit 10.
Handset Shipment, ASP and Revenue Growth

35%
29.6%
30%
22.1%
25%
21.7%
20%
15%
14.6%
20.3%
13.7%
11.5%
14.1%
10%
12.8%
5%
7.0%
0%
-5%
-10%
3.9%
3.2%
-6.6%
2004
2005
-7.3%
2006
Shipment Growth
Source: CIBC World Markets Corp.
10
7.7%
9.8%
6.1%
-7.1%
8.1%
-7.4%
2007(E)
-3.4%
-4.0%
-4.6%
-3.5%
2008(E)
2009(E)
2010(E)
2011(E)
ASP Growth
Revenue Growth
Handset OEM Trends

Market Share Trends
Nokia stands alone, as
Motorola falters
Shifting our analysis from industry metrics to vendor specifics, what was a twohorse race in 2006 between Nokia and Motorola has seen Motorola fall back to
the pack in 2007. In 4Q06, Motorola had increased its market share to 23.8%,
a considerable lead above No. 3 Samsungs 11.9%. While still a distance from
Nokias 38.2%, it was close enough to consider Motorola a head-to-head
competitor in nearly all aspects.
Nokia is king of the hill
A year later, Nokias dominance is once again unquestioned, holding a

projected 38.5% share for 2007 (based on our estimates). This is up from its
35.3% in 2006 and more than the 37.7% share of its three closest competitors
combined. Nokia is the only vendor at this point committed to the global market
in all segments, from the ultra low end to the $1,000+ price point.
Conversely, Motorola, with its challenging financial performance, has pulled
away from chasing share at the expense of profitability. This has largely taken
the company out of the very low end for now and led to significant share losses
in emerging regions. We expect Motorola to re-enter these regions in the future
but believe it would take time.
11
Still believe that Motorola

will eventually regain the No.
2 spot
Samsung (14.5%) and Motorola (14.0%) have very similar market shares for
2007, with Samsung making a late year push to put it a small number of units
ahead of Motorola. We expect Motorola and Samsung to slug it out in late 2008
and still believe that despite Samsungs solid presence in the U.S. and 3G and
its growing focus on the low end, Motorola will eventually regain the No. 2
spot. A stronger brand name and distribution channel are elements that should
push Motorola forward once its product portfolio is revamped (2H08).
Sony Ericsson and LG are at

a tricky crossroad
Adding No. 4 Sony Ericsson (9.3%) and No. 5 LG (7.2%) into the mix brings the
combined share for the top five vendors to 83.3% of the worldwide mobile
handset market. We believe both Sony Ericsson and LG are at a tricky
crossroad. They have managed to show solid market share and margin
improvements in 2007. Yet, if Motorola bounces back, we find it difficult to
see how they can keep up without some material missteps. Also, both are
taking steps to move into the low end of the market where scale is key for
survival. Both are sizable, but at a disadvantage to the top three OEMs.
Dont overlook the others
Although we look for the top five to gain incremental share from tier 2 and 3
vendors in 2008, further out share gains will increasingly have to come from
within the top five. Outside of the top five OEMs, we are seeing share
being consolidated as well. Vendors like HTC and RIMM are gaining in the
high end and Lenovo, ZTE and Huawei in the low end. These vendors deserve
more attention and can challenge the top five in certain regions or ASP tiers.
RIM picking up momentum
With regards to RIM, we see the company continuing to benefit from its
strong enterprise traction and the long-term shift toward smart phones.
The company has also successfully migrated from a sole focus on the enterprise
to the consumer market. With a new load of products targeted for 2008, it
remains to be seen how low it would go in driving its growth. That said, RIM
has clearly found a defensible position, which it is strongly leveraging. We see
more gains for RIM for the foreseeable future.
Exhibit 11.
Vendor Handset Shipments
2006A
Nokia
347,500
QoQ Growth
YoY Growth
31.0%
Motorola
QoQ Growth
YoY Growth
217,400
Samsung
QoQ Growth
YoY Growth
118,900
Sony Ericsson
QoQ Growth
YoY Growth
74,800
LG
QoQ Growth
YoY Growth
63,600
RIM
QoQ Growth
YoY Growth
5,503
48.9%
15.5%
46.4%
15.8%
52.6%
Other Vendors
QoQ Growth
YoY Growth
157,297
Total Shipments
QoQ Growth
YoY Growth
985,000
-15.6%
21.6%
1Q07A
91,100
-13.6%
21.3%
2Q07A
100,800
10.6%
28.6%
3Q07A
111,700
10.8%
26.2%
4Q07E
131,000
17.3%
24.2%
2007E
434,600
45,400
-30.9%
-1.5%
35,500
-21.8%
-31.6%
37,200
4.8%
-30.7%
39,800
7.0%
-39.4%
157,900
34,800
5.8%
20.0%
37,400
7.5%
42.2%
42,600
13.9%
38.8%
48,500
13.8%
47.4%
163,300
21,800
-16.2%
63.9%
24,900
14.2%
58.6%
25,900
4.0%
30.8%
32,000
23.6%
23.1%
104,600
15,800
-11.7%
12.1%
19,100
20.9%
27.3%
21,900
14.7%
31.9%
24,309
11.0%
35.8%
81,109
2,029
11.9%
81.5%
2,416
19.1%
99.5%
3,056
26.5%
124.7%
3,900
27.6%
115.0%
11,401
37,071
41.6%
-12.3%
41,884
13.0%
-13.6%
47,644
13.8%
18.1%
50,491
6.0%
92.8%
177,090
248,000
-10.1%
12.2%
262,000
5.6%
10.5%
290,000
10.7%
15.5%
330,000
13.8%
19.6%
1,130,000
25.1%
-27.4%
37.3%
39.8%
27.5%
107.2%
12.6%
14.7%
4Q08E
2008E
145,000
500,000
16.0%
10.7%
15.0%
1Q08E
112,000
-14.5%
22.9%
2Q08E
118,000
5.4%
17.1%
3Q08E
125,000
5.9%
11.9%
33,000
-17.1%
-27.3%
35,000
6.1%
-1.4%
39,000
11.4%
4.8%
46,000
17.9%
15.6%
153,000
49,470
2.0%
42.2%
49,965
1.0%
33.6%
51,963
4.0%
22.0%
53,522
3.0%
10.4%
204,920
27,000
-15.6%
23.9%
28,500
5.6%
14.5%
30,000
5.3%
15.8%
35,500
18.3%
10.9%
121,000
23,094
-5.0%
46.2%
23,786
3.0%
24.5%
24,738
4.0%
13.0%
25,975
5.0%
6.9%
97,592
4,375
12.2%
115.6%
4,813
10.0%
99.2%
5,294
10.0%
73.2%
5,824
10.0%
49.3%
20,306
46,061
-8.8%
24.3%
46,936
1.9%
12.1%
50,005
6.5%
5.0%
44,179
-11.7%
-12.5%
187,181
295,000
-10.6%
19.0%
307,000
4.1%
17.2%
326,000
6.2%
12.4%
356,000
9.2%
7.9%
1,284,000
1Q08E
38.0%
-1.7%
1.2%
2Q08E
38.4%
0.5%
0.0%
3Q08E
38.3%
-0.1%
-0.2%
4Q08E
40.7%
2.4%
1.0%
2008E
38.9%
11.2%
-0.9%
-7.1%
11.4%
0.2%
-2.1%
12.0%
0.6%
-0.9%
12.9%
1.0%
0.9%
11.9%
16.8%
2.1%
2.7%
16.3%
-0.5%
2.0%
15.9%
-0.3%
1.3%
15.0%
-0.9%
0.3%
16.0%
9.2%
-0.5%
0.4%
9.3%
0.1%
-0.2%
9.2%
-0.1%
0.3%
10.0%
0.8%
0.3%
9.4%
7.8%
0.5%
1.5%
7.7%
-0.1%
0.5%
7.6%
-0.2%
0.0%
7.3%
-0.3%
-0.1%
1.5%
0.3%
0.7%
1.6%
0.1%
0.6%
1.6%
0.1%
0.6%
1.6%
0.0%
0.5%
15.3%
-0.3%
-0.7%
15.3%
0.1%
-1.1%
12.4%
-2.9%
-2.9%
14.6%
100.0%
100.0%
100.0%
100.0%
-3.1%
25.5%
15.7%
20.3%
78.1%
5.7%
13.6%
Source: CIBC World Markets., Company Reports

Note: Research In Motion (RIM) results are shifted by one month with the company's fiscal year end being February.
Exhibit 12.
Vendor Handset Market Share
2006A
Nokia
35.3%
Delta QoQ
Delta YoY
2.5%
1Q07A
36.7%
-1.5%
2.8%
2Q07A
38.5%
1.7%
5.4%
3Q07A
38.5%
0.0%
3.3%
4Q07E
39.7%
1.2%
1.5%
2007E
38.5%
18.3%
-5.5%
-2.6%
13.5%
-4.8%
-8.3%
12.8%
-0.7%
-8.6%
12.1%
-0.8%
-11.7%
14.0%
14.0%
2.1%
0.9%
14.3%
0.2%
3.2%
14.7%
0.4%
2.5%
14.7%
0.0%
2.8%
14.5%
8.8%
-0.6%
2.8%
9.5%
0.7%
2.9%
8.9%
-0.6%
1.0%
9.7%
0.8%
0.3%
9.3%
6.4%
-0.1%
0.0%
7.3%
0.9%
1.0%
7.6%
0.3%
0.9%
7.4%
-0.2%
0.9%
0.8%
0.2%
0.3%
0.9%
0.1%
0.4%
1.1%
0.1%
0.5%
1.2%
0.1%
0.5%
16.0%
1.0%
-4.5%
16.4%
0.4%
0.4%
15.3%
-1.1%
5.8%
15.7%
-7.0%
14.9%
5.5%
-4.2%
-0.3%
15.6%
0.3%
0.7%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Motorola
Delta QoQ
Delta YoY
22.1%
Samsung
Delta QoQ
Delta YoY
12.1%
Sony Ericsson
Delta QoQ
Delta YoY
LG
Delta QoQ
Delta YoY
RIM
Delta QoQ
Delta YoY
Other Vendors
Delta QoQ
Delta YoY
Total Shipments
4.0%
-0.6%
7.6%
1.3%
6.5%
-0.3%
0.6%
0.1%
16.0%
3.2%
-8.1%
2.4%
1.7%
7.2%
0.7%
1.0%
0.5%
Source: CIBC World Markets., Company Reports

Note: Research In Motion (RIM) results are shifted by one month with the company's fiscal year end being February.
12
0.5%
-2.1%
1.5%
0.2%
7.6%
0.4%
1.6%
0.6%
-1.1%
Exhibit 13.
2007(E) and 2006 Handset Vendor Regional Market Share
North America
Latin America
2006 2007(E) Change
2006 2007(E) Change
Nokia
14%
8%
-6%
32%
31%
-1%
Motorola
39%
36%
-3%
31%
28%
-3%
Samsung
17%
19%
2%
6%
8%
2%
Sony Ericsson
3%
1%
-2%
8%
13%
5%
LG
15%
16%
1%
8%
12%
4%
Other
12%
20%
8%
15%
8%
-7%
Total
100%
100%
100%
100%
Source: Gartner Dataquest and CIBC World Markets
Western Europe
2006 2007(E) Change
36%
39%
3%
17%
12%
-5%
15%
18%
3%
12%
16%
4%
4%
5%
1%
16%
10%
-6%
100%
100%
MEA/East Europe
2006 2007(E) Change
44%
54%
10%
17%
7%
-10%
13%
13%
0%
9%
12%
3%
3%
4%
1%
14%
10%
-4%
100%
100%
2006
40%
18%
10%
6%
6%
20%
100%
Asia Pacific
2007(E) Change
43%
3%
7%
-11%
14%
4%
7%
1%
6%
-1%
24%
4%
100%
2006
35%
22%
12%
8%
7%
16%
100%
Worldwide
2007(E) Change
39%
3%
14%
-8%
15%
2%
9%
2%
7%
1%
17%
0%
100%
Financial Trends
Shipments not necessarily a
good indicator of profits
Before we examine each of the leading handset vendors, we briefly address the
financial trends in the handset market and the associated opportunity for
handset vendors. As we examine handset sales and shipments by vendor, it
becomes clear that handset market share does not necessarily correlate
closely with revenue share or profit share.
Nokia has the lions share

and most at stake
A good example is Nokia, which based on our 2007 estimates accounts for
38.5% of handset shipments, 36.2% of handset revenue, and an impressive
59.8% of industry operating income. Conversely, Motorola accounts for 14.0%
of shipments and 13.0% of revenue, but is currently running at an unprofitable
operating level (a 4.0% operating margin).
Exhibit 14.
2007(E) Vendor Share of Key Metrics
70%
2009(E) Handset Vendor Share of Key Metrics
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
-10%
Nokia
Motorola
Samsung
Unit Volume
Revenue
LG
Sony
Ericsson
Operating Income
RIM
Other
Nokia
Motorola
Samsung
Unit Volume
LG
Revenue
Sony
Ericsson
Operating Income

Note: Operating income percent contribution in 2007 not normalized to 100% - allowing Motorolas expected negative operating income for 2007 to be reflected as a negative percentage.
13
RIM
Other
Exhibit 15.
Handset Operating Income - % of Total
Handset Revenue - % of Total

100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
(Adjusted)
0%
2003
Nokia
2004
Motorola
2005
Samsung
2006
LG
2007(E)
Sony Ericsson
2008(E)
RIM
2009(E)
Other
2003
Nokia
(Adjusted)
2004
2005
Motorola
Samsung
2006
LG
2007(E)
Sony Ericsson
2008(E)
RIM
2009(E)
Other

*Note: Operating income percent contribution adjusted to zero for those with unprofitable operations (Sony Ericsson in 2003 and Motorola in 2007E).
Nokias scale, cost structure

and supply chain give it a
higher share of industry
profits
Nokias lower revenue contribution versus handset shipments reflects its very
strong position in emerging markets. Emerging markets tend to have a lower
end product mix and as a result a lower regional ASP, which is reflected in
Nokias 2007 ASP of $111 versus our estimate for the overall market of $121.
Despite its lower than industry average ASP, Nokias significant scale
advantage (nearly 3x its nearest competitor), refreshed and cost friendly
product portfolio, and leading supply chain (the industry benchmark) gives
it a much larger share of industry profits.
At the moment, Nokia and Research In Motion are the two vendors
getting the most out of their market position and Motorola is the vendor
getting the least. This point is clear when you look at the handset market
share to operating income market share presented in Exhibits 16-17.
Who is getting a bigger bang

for the buck?
This ratio (operating income market share divided by handset shipment share)
illustrates how much economic value each vendor generates from each
percentage point of handset shipment market share. In a sense, its a measure
of OEM efficiency that captures quality of execution, business scale, competitive
positioning as well as margin leverage.
Exhibit 16.
Operating Income Market Share / Handset Market Share Ratio by Vendor
2003
2004
2005
2006
2007(E)
Nokia
1.79
1.31
1.32
1.31
1.55
Motorola
0.31
0.96
0.99
0.86
-0.29
Samsung
1.78
1.65
1.45
1.07
1.25
Sony Ericsson
0.28
0.62
0.46
0.09
0.77
LG
-0.24
0.79
0.63
1.47
1.33
RIM
0.82
5.70
7.64
6.69
6.52
Other
0.45
0.43
0.44
0.41
0.12
Average w/o RIM
0.73
0.96
0.88
0.87
0.79
Average w RIM
0.74
1.64
1.85
1.70
1.61
Source: Company Data, CIBC World Markets
14
2008(E)
1.41
0.05
0.99
0.63
1.15
6.45
0.20
0.74
1.55
2009(E)
1.33
0.48
0.87
0.60
1.06
6.15
0.24
0.76
1.53
Exhibit 17.
Operating Income / Handset Shipment Share Ratio

2.0
1.5
1.0
0.5
0.0
2003
2004
2005
2006
2007(E)
2008(E)
2009(E)
-0.5
Nokia
Motorola
Samsung
Sony Ericsson
LG
RIM gets a lot (of profit) from

a little (shipments)
Using this ratio, we can see that RIM generates by far the most operating
income share per handset shipment, with an estimated 2007 ratio of 6.52
vs. the group average of 1.61. Excluding RIM, which clearly is an outlier, we see
that Nokia is the next strongest at 1.55 vs. a group average of 0.79. LG (1.33)
also fares well based on this metric, which we believe reflects its heavy exposure
to the CDMA market, as does Samsung (1.25). Sony Ericsson (0.77) is roughly
in line with the group average (although below if we exclude Motorola), while
Motorola with its 0.29 is gaining the least from its market position.
Motorola turning things

around
While struggling at the moment, Motorola has the most attractive

opportunity to turn its business around over the next two years, in our
opinion. We see 2008 unfolding for Motorola much like 2007, but by 2009 we
expect the company to be back on its feet with an improved product portfolio
and the potential to show both improvement in handset market share (with a
focus on the mid and high tiers) and industry profits share (as margins start to
recover). As this occurs, we see its contribution ratio improving to 0.48 in
2009, just a bit short of the group average of 0.76. In this respect (share gains
in units and profits), we see considerable value in MOT, as its current
position understates this potential.
Everyone giving some

ground as Motorola recovers
As Motorola regains its footing in the next two years, we expect Nokia and all
the other top vendors to see compression in this ratio (effectively gaining
a smaller share of profits). Nokia, which has gained the most from Motorolas
troubles, may have the most to lose as it recovers; however, Samsung, Sony
Ericsson and LG are more dependent on the markets Motorola is directly
targeting (based on a percentage contribution basis) and are at risk as well.
Building on this discussion, Exhibit 18 highlights our impression of the near- to
moderate-term prospects for the leading handset vendors. The exhibit gives a
sense of how well positioned the companies are to gain handset market share,
increase sales and generate operating profit versus the competition. We show
Motorola as the only OEM we expect to show gains on all fronts.
15
Vendor Positioning - 1 to 2 Year Outlook

Company
Shipments
Nokia
Market Growth - limited upside opportunity as
Nokia is already well positioned in most markets.
The company could see gains in North America, but
dominant position in MEA and AP will see
increased competition.
ASP
Market Growth - we expect a modest price decline
roughly in line with the market as Nokia's mix
already reflects considerable low end exposure,
although increased competition in this segment
leaves the risk of even more price pressure.
Operating Margin
Steady - Nokia's margins already reflect the
industry's leading supply chain and best component
prices. Incremental gains would be difficult to
produce, but Nokia's history of strong execution
shows maintaining current levels is possible.
CIBC Take
We applaud Nokia's continued strong execution and
operating excellence, which we believe is already
reflected in the company's share price. Near term
prospects are positive, but long term we see the
company as having the most at risk.
Motorola
Stronger - Motorola continues to focus on a

company wide restructuring effort. 2008 will show
share erosion in comparison to 2007, but we see
1Q08 as the low point with steady gains following.
Low expectations leaves Motorola the most upside
potential in 2H08/2009.
Stronger - Motorola has deemphasized its role in

the low end and appears to be sticking to it's pricing
objectives in other segments, despite some 4Q07
challenges. With the portfolio turning over in the
next year and 3G having a larger role we look for
ASPs to increase accordingly.
Improving Significantly - reflecting a low starting

point (negative 2007 operating margin) and
significant opportunity for gains following
restructuring, further upside could materialize if
management sticks to its pricing strategy and the
company's new handsets see strong acceptance.
With all key metrics set to show improvement, a

change in management likely to put even more
emphasis on operational improvement, and low
investor expectations, we see the greatest value in
Motorola and best opportunity for upside. That said
near term performance is still unimpressive with the
incremental gains likely to start showing up in
results in the 2H08 and 2009.
Samsung
Stronger - aggressive targets are reachable given a

strong mid and high end position in Europe and
North America and a focused push on 3G
(particularly Western Europe) and the low end in
emerging markets.
Weaker - while Samsung could benefit from a solid

new product line up and a growing 3G market, we
are wary of the company's push into the low end.
Weaker - with Samsung's margins and prices

already reflecting a strong presence in the mid and
high end, we are cautious of the push into the lowend putting incremental pressure on margins.
Recent execution bodes well for Samsung meeting

aggressive 2008 shipment targets. But for Samsung
to meet these targets, it will have to make a strong
push into emerging markets putting ASP and
margins at risk. A Motorola recovery and a more
aggressive Nokia in the US are also big risks.
Sony Ericsson
Market Growth - solid execution continues, but

given strong 2007 and 2008 share gains and
increased competition we see a more challenging
environment for Sony Ericsson. The company's low
end push is mirroring similar moves by both
Samsung and LG.
Weaker - Sony Ericsson enjoys a price premium

reflecting the strength of Sony's Walkman and
Cybershot brands, but with Apple bringing its own
brand strength to smart phones we see prices coming
under increased pressure. A growing low end mix
also provides pressure.
Steady - with Sony Ericsson implementing a new

ODM strategy, we look for the company to largely
offset potential margin pressure resulting from the
low end mix shift. While under more pressure, we
also look for prices to remain at a premium to the
market.
With tougher YoY comparisons than in the past and

increased competition we view Sony Ericsson as
being in a position were it will have to work hard to
maintain its current market position. The company
may have the most to lose as multimedia becomes
more of a rallying point for all competitors.
LG
Stronger - We expect strong growth well above the

market, although a bit short of LG's aggressive 2008
goal of +25% YoY. We're a bit more cautious as LG
has already been more aggressive in the low-end and
will see more competition. LG also has more
exposure to CDMA/EV-DO than others and a
greater dependence on the US, which increases
volatility.
Much Stronger - we believe RIM has only
scratched the surface on the consumer market,
leaving considerable upside possible as the smart
phone segment develops.
Weaker - recent performance (a 19% 3Q07 QoQ

price drop) shows LG's handset prices are extremely
dependent on mix and can be very volatile. A 3G
rebound can provide some near term relief, but long
term we a wary of the low end push.
Steady - while LG is subject to the same low end

mix risk of its closest competition, because of poor
performance in 2006 and early 2007 the company is
starting from a lower absolute level leaving room for
slight improvement.
Market Growth - given the company's market

niche, enterprise and high end email driven smart
phones, we expect prices to hold up well and be in
line or slightly better than the market.
Steady - RIM has managed the move into the

consumer market effectively and with volume
ramping significantly we're bullish on the
opportunity for steady margins and possible upside
as scale grows.
We're cautious that in order for LG to meet

aggressive shipment targets ASP and margins could
come under greater pressure than we currently
model. Results could also be more volatile than its
competitors given a heavier reliance on CDMA and
high customer concentration. A Motorola recovery
and a more aggressive Nokia in the US are also big
risks.
RIM's shares already enjoy a well deserved premium
earnings multiple, which we see as supportable
given the company's encouraging outlook. However,
the company's increased reliance on consumer for
growth raises risk and volatility in our opinion.
Research In Motion
16
Exhibit 18.
Exhibit 19.
Total Handset Revenue by Vendor
2003
2004
2005
Nokia
$27,767
$28,702
$34,179
Motorola
10,978
17,108
21,455
Samsung
10,812
15,836
17,604
LG
4,338
7,522
8,366
Sony Ericsson
5,476
7,703
9,112
RIM
187
629
1,185
Other
23,601
22,575
22,285
Total
$83,159 $100,074 $114,186
Growth
20.3%
14.1%
(Millions of $)
2008(E)
2009(E)
$55,115
$58,954
16,621
23,535
28,311
28,506
11,624
11,143
18,956
19,343
7,030
9,358
12,438
9,751
$150,095 $160,590
9.8%
7.0%
2006
$41,916
28,383
18,271
9,677
13,821
1,927
14,779
$128,774
12.8%
2007(E)
$49,505
17,759
24,488
11,202
17,496
3,918
12,270
$136,639
6.1%
2006
32.5%
22.0%
14.2%
7.5%
10.7%
1.5%
11.5%
100.0%
2007(E)
36.2%
13.0%
17.9%
8.2%
12.8%
2.9%
9.0%
100.0%
2008(E)
36.7%
11.1%
18.9%
7.7%
12.6%
4.7%
8.3%
100.0%
2009(E)
36.7%
14.7%
17.8%
6.9%
12.0%
5.8%
6.1%
100.0%
2005
$129
147
171
152
178
329
119
$141
-6.6%
2006
$121
131
154
152
185
350
94
$131
-7.3%
2007(E)
$114
112
150
138
167
344
69
$121
-7.4%
2008(E)
$110
109
138
119
157
346
66
$117
-3.4%
2009(E)
$109
123
129
103
149
337
46
$112
-4.0%
2005
$5,303
2,183
2,267
383
487
418
1,250
$12,291
7.3%
2006
$6,590
2,689
1,846
80
1,591
533
929
$14,258
16.0%
2007(E)
$10,131
-678
3,054
933
2,080
1,116
315
$16,951
18.9%
(Millions of $)
2008(E)
2009(E)
$11,496
$12,135
134
1,546
3,305
3,230
1,006
1,096
2,264
2,325
2,137
2,869
616
860
$20,958
$24,060
23.6%
14.8%
Exhibit 20.
Total Handset Revenue by Vendor - Market Share
2003
2004
2005
Nokia
33.4%
28.7%
29.9%
Motorola
13.2%
17.1%
18.8%
Samsung
13.0%
15.8%
15.4%
LG
5.2%
7.5%
7.3%
Sony Ericsson
6.6%
7.7%
8.0%
RIM
0.2%
0.6%
1.0%
Other
28.4%
22.6%
19.5%
Total
100.0%
100.0%
100.0%
Exhibit 21.
Handset ASP by Vendor
2003
2004
Nokia
$154
$138
Motorola
147
164
Samsung
194
183
LG
158
169
Sony Ericsson
201
181
RIM
296
299
Other
161
128
Total
$162
$151
Growth
-7.1%
Exhibit 22.
Handset Operating Income by Vendor
2003
2004
Nokia
$6,604
$4,714
Motorola
479
1,728
Samsung
2,037
2,462
LG
159
475
Sony Ericsson
-134
580
RIM
11
207
Other
1,369
1,293
Total
$10,524
$11,460
Growth
8.9%
17
Exhibit 23.
Handset Operating Margin by Vendor
2003
2004
Nokia
23.8%
16.4%
Motorola
4.4%
10.1%
Samsung
18.8%
15.6%
LG
3.7%
6.3%
Sony Ericsson
-2.4%
7.5%
RIM
5.7%
33.0%
Other
5.8%
5.7%
Total
12.7%
11.5%
2005
15.5%
10.2%
12.9%
4.6%
5.3%
35.3%
5.6%
10.8%
2006
15.7%
9.5%
10.1%
0.8%
11.5%
27.6%
6.3%
11.1%
2007(E)
20.5%
-3.8%
12.5%
8.3%
11.9%
28.5%
2.6%
12.4%
2008(E)
20.9%
0.8%
11.7%
8.7%
11.9%
30.4%
5.0%
14.0%
2009(E)
20.6%
6.6%
11.3%
9.8%
12.0%
30.7%
8.8%
15.0%
Handset Operating Income by Vendor - % Contribution

2003
2004
2005
2006
Nokia
62.7%
41.1%
43.1%
46.2%
Motorola
4.6%
15.1%
17.8%
18.9%
Samsung
19.4%
21.5%
18.4%
12.9%
LG
1.5%
4.1%
3.1%
0.6%
Sony Ericsson
-1.3%
5.1%
4.0%
11.2%
RIM
0.1%
1.8%
3.4%
3.7%
Other
13.0%
11.3%
10.2%
6.5%
Total
100.0%
100.0%
100.0%
100.0%
2007(E)
59.8%
-4.0%
18.0%
5.5%
12.3%
6.6%
1.9%
100.0%
2008(E)
54.9%
0.6%
15.8%
4.8%
10.8%
10.2%
2.9%
100.0%
2009(E)
50.4%
6.4%
13.4%
4.6%
9.7%
11.9%
3.6%
100.0%
Exhibit 24.
Nokia
The right mix in the right
places
Nokia remains the worlds No. 1 vendor of mobile handsets by a wide

margin, surviving Motorolas 2006 market share push without missing a step.
Samsung has overtaken Motorola by a slight margin to claim the No. 2 spot, but
it is in no position to push Nokia out of the No. 1 spot.
Nokia continues to execute well and with a refreshed and competitive portfolio,
there is probably nothing on the horizon to endanger its strong market position.
The company continues to enjoy the top spot in the biggest markets (India and
China) and is the only manufacturer committed to emerging markets as a
whole. As a result, Nokia is seeing a mix shift toward lower-tier lower-priced
phones, but its financial performance hasnt suffered given a portfolio filled
with newer, more cost-efficient platforms.
North America still a weak

spot
The lack of a focus on CDMA continues to put Nokia at a disadvantage in North

America, but with global growth opportunities for GSM very strong, we dont see
this as too much of a concern. We believe the company would make a stronger
push on this front in 2008 as it ramps its ODM CDMA relationships.
Demand outstripping supply
At the moment, demand has outstripped supply, which could limit Nokias
ability to experience near-term upside. However, with the industry seeing
component shortages across the supply chain, we believe Nokia is still first in
line to get its fair (and very large) share.
Nokia continues to have the most comprehensive and competitive handset
portfolio top to bottom, a testament to the companys scale advantage. Nokia
has closed the gap on form factor and fashion (particularly on the thin side) and
remains committed to designs that incorporate mass marketready functionality.
We dont see any big weak spots in the catalog, acknowledging CDMA isnt a
strength or focus area. Within the GSM and WCDMA portfolio, we give the
18
company high marks on its candy bar handsets, but it has improved the flip
phone and slider line-up as well.
Low-cost phones driving

unit shipments
We see no competitor that is currently in a good position to gain

meaningful share against Nokia in the low end, especially for ultra low-cost
handsets. Near-term volume drivers are the Nokia 1600 and the older 1100. But
the company has already embraced lower-cost single chip designs, with the
1200 and 1208 now ramping. These phones should become more important in
2008 from a volume perspective and help with margins. Longer term Nokias
margins could come under pressure from the mix shift (toward the low end) and
entry of some OEMs into the market, but in the near term we believe Nokia can
continue to push the low-end pedal without fear.
The mid- and high-end

markets are competitive
In the mid/high end Nokia faces more competition, but its deep GSM
portfolio and strong brand keep the company very competitive. The 6000 series
phones, such as the 6300 and 6500, dominate Nokias mid-tier offerings while
the company has expanded into the music space with its XpressMusic handsets
such as the 5310 showing positive traction. We also expect the Barracuda and
Luna to contribute as Nokia looks to extend its reach in the marketplace.
The higher-end N-Series has been a success with over 9 million shipped in
3Q07. The refreshed N-series has been particularly well received in Europe, with
new iterations of the N95 and new handsets such as the N81 and N82 expected
to ramp in 2008.
19
Competition tougher in the

mid/high end
Competition is much tougher in the mid/high end than in the low end, where
Nokias scale advantage comes into play. Samsung, Sony Ericsson and LG all
have solid portfolios and Motorolas portfolio is slowly improving. Apple, with the
iPhone, and Research In Motion, with the Curve and Pearl, are also keeping the
pressure on in the high-end consumer-focused smart phone segment.
Enterprise still developing
The enterprise market remains a focus for Nokia, although disappointing to

financial performance. The long-term opportunity makes it worth the effort, in
our opinion. The E61 (with Qwerty keyboard) and E65 are the key drivers in this
segment yet not really gaining much traction against a strong Blackberry line-up
as true email devices. Shipments of Nokias E-series have started to gain some
traction, mostly in Western Europe, but we believe there is still much to be done
here to be competitive with RIM.
A force in 3G WCDMA
Nokia is by far the dominant force in WCDMA in Europe, led by the popular
N-series portfolio and the value-oriented 6000 series. Although competition
continues to target Nokia directly, only Sony Ericsson has had much success in
Europe. Outside Europe, Nokias 3G position is less impressive. Nokia did
get into AT&Ts 3G portfolio in 2007, but it has yet to see the ramp we had
looked for. T-Mobile remains a solid customer for GSM that could help on 3G in
the U.S.
Exhibit 25.
160,000
45%
140,000
40%
30%
100,000
25%
80,000
20%
60,000
15%
40,000
Handset Market Share
35%
120,000
10%
Shipments
4Q08E
3Q08E
2Q08E
1Q08E
4Q07E
3Q07A
2Q07A
1Q07A
4Q06A
3Q06A
2Q06A
1Q06A
4Q05A
3Q05A
2Q05A
1Q05A
0%
4Q04A
0
3Q04A
5%
2Q04A
20,000
1Q04A
Handset Shipments (Thousands)
Nokia Handset Overview
Market Share
Exhibit 26.
Sampling of Nokia Phones
1200
GSM/GPRS
5310 XpressMusic
EDGE
6500 Classic
UMTS
E65
UMTS
N82
HSDPA
N95 8GB
HSDPA
Motorola
What a difference a year
makes
20
To say 2007 has been challenging for Motorola is an understatement. The

company has come from discussions of taking Nokia head-on to the need for a
complete overhaul of its portfolio, distribution strategy, and
management team. While Motorola is essentially tied with Samsung for the
No. 2 market spot in 2007, Samsung has more momentum ending the year.
With that said, we believe Motorola is showing signs of progress. Handset
shipments in 3Q07 were stronger than expected in several markets and we look
for the momentum to build in 2008 even as Motorola manages component
shortages and excess inventory in the U.S. The current major portfolio overhaul
should put the company on better ground in 2H08 and 2009.
Needs to close the gap in 3G

WCDMA
Motorolas goal is to deliver a well-stocked and diversified portfolio across four

key segments: mass market, feature phone, multimedia, and productivity. The
key area for improvement in our opinion is 3G WCDMA, where we have yet
to see a handset we consider a game changer. We also believe the company has
a poor showing in productivity, as it misses the target with a weak Q
portfolio in comparison to strong competition, particularly from market leader
RIM. We dont look for the company to jump back into the very low end, with
the emphasis instead on sustainable profitability and solving customer needs.
U.S. a safe haven
From a regional perspective, Motorola still has a strong position in the U.S.
leveraging a well-established brand name and solid position in CDMA EV-DO at
both Verizon and Sprint. Latin America also remains a relatively strong
area, but the rest of the world has come under considerable pressure. 2007
market share losses were significant in Europe (no 3G), MEA and Asia (given the
move away from the low end).
The RAZR brand has moved on to the RAZR2, a sleeker, improved version of the
RAZR. Although it is a solid handset, demand for the RAZR2 has been
mixed. Based on our checks, the units shipped in 3Q07 have sold through, yet
the targets for 4Q07 seem too high. As a result, we expect Motorola will lower
the price of the RAZR2 in order to kick-start shipments in 2008.
What will come in 2008?
On product introductions, we havent seen much yet and dont anticipate a lot of
activity in 1H08. We expect the majority of Motorolas new models that could
make a difference to ship in 2H08 and 2009. Motorola has downplayed the onehit wonder approach, so we dont look for another RAZR, just a solid and deeper
portfolio.
Of the phones that Motorola has already introduced, the U9 is a stylish music
phone that holds some promise. The ROKR E8 (Elba) is also interesting given its
innovative touch pad that would light certain keys depending upon the feature
being used by the user.
21
Deemphasizing the low end
With Motorola unwilling to sacrifice profitability for market share, management

has deemphasized the low end. As a result, the company has left the ultralow end for Nokia and positioned a refreshed W-series portfolio at higher lowend price points. This should lead to a more stable ASP environment for the
company in 2008 and 2009 and most likely an ASP increase as the mid- and
high-end portfolio improves.
Q phone not gaining traction

in enterprise
Motorola continues to look at the enterprise and mobile email markets as a

growth opportunity. Similar to Nokia, Motorola has had limited success. The
Q has been a solid device, but it is viewed primarily as a consumer product in a
very competitive smart phone space and not as an enterprise device. Regardless
of segment, the Q has not seen much traction in either category. The recent Q9
is a step up, but we still dont see it as a serious challenger to the entrenched
RIM Blackberry portfolio. There have been discussions about using HTC or
Compal for such devices in the future to broaden the portfolio.
Exhibit 27.
Motorola Handset Overview

25%
70,000
20%
60,000
50,000
15%
40,000
10%
30,000
20,000
80,000
5%
10,000
Shipments
4Q08E
3Q08E
2Q08E
1Q08E
4Q07E
3Q07A
2Q07A
1Q07A
4Q06A
3Q06A
2Q06A
1Q06A
4Q05A
3Q05A
2Q05A
1Q05A
4Q04A
3Q04A
2Q04A
0%
1Q04A
Market Share
Exhibit 28.
Sampling of Motorola Phones
W156
GSM
W206
GSM
MOTO U9
EDGE
RIZR Z9
HSDPA
Q9m
EV-DO
RAZR2 V9
HSDPA
Samsung
No. 2 reclaimed
22
With Motorola slipping, Samsung has climbed back into the No. 2 market
share spot, a considerable distance behind Nokia and ahead of Motorola by a
very slight margin. Recent momentum and a bit more focus on the low end
(>$50) than in the past clearly favor Samsung, which could help the company
distance itself from Motorola in 2008 at the No. 2 spot.
Flirting with the low end
Longer term, its difficult to judge whether Samsung can separate itself from the
pack and establish itself as a clear No. 2. The companys selective approach to
the low end can provide spurts of upside, but it isnt the type of aggressive
commitment that would give the company a true edge over others (namely Sony
Ericsson and LG) doing the same.
Where we are the most bullish on Samsung is in Western Europe, where
the company can maintain a solid business focused on mid- and high-tier
handsets and with 3G, and in North America, where it can leverage an edge in
CDMA. While attractive markets, these two areas dont provide the volume
opportunity that emerging markets do, by our analysis.
Ultra handsets leading the

way
Samsungs key models include the Ultra Edition II handsets, which shipped 5.7
million units in 3Q07, and the E250, which is expected to meaningfully
contribute during 4Q07 and 2008. Also in the mix for 2008 are cross-brand
initiatives with Armani (following in LGs Prada footsteps) and Seranata (with
Bang & Olufsen). Samsung is also looking to take advantage of the touch screen
rage with such handsets as the Croix (HSDPA, 5MP camera), SGH-700V (HSDPA,
3.2MP camera) and Armani phone (Wi-Fi, 3MP camera).
3G has room to grow
3G WCDMA has been mixed for the company, with the 5.5 million shipped in
3Q07 a solid contributor, but still leaving ample room to grow. Overall, we see
Samsung as well positioned in the U.S. at AT&T and with many European
carriers, although there is room for increased traction with European consumers.
We believe the company is planning new models for the European region to
better position it in the higher end of the market.
Culture changing
We note that the company has a new head for the handset unit who is taking a
more aggressive approach to cost cutting and market share gains. As such we
could see a more aggressive Samsung than we have seen in the past.
Exhibit 29.
Samsung Handset Overview

70,000
18%
16%
14%
50,000
12%
40,000
10%
30,000
8%
6%
20,000
4%
10,000
2%
Shipments
23
Market Share
4Q08E
3Q08E
2Q08E
1Q08E
4Q07E
3Q07A
2Q07A
1Q07A
4Q06A
3Q06A
2Q06A
1Q06A
4Q05A
3Q05A
2Q05A
1Q05A
4Q04A
3Q04A
2Q04A
0%
1Q04A
60,000
Exhibit 30.
Sampling of Samsung Phones
UpStage
EV-DO
Juke
CDMA
Blackjack II
HSDPA
SGH-U700
HSDPA
SGH-700V
HSDPA
Giorgio Armani
EDGE
Sony Ericsson
Still flexing its global brand
muscle
Sony Ericsson saw a sharp increase in its handset market share in 2007,
helped by continued strong demand for the companys signature Walkman and
Cybershot phones. Since its initial launch in August 2005, the Walkman line of
handsets has surpassed 45 million shipments. The Cybershot line, which was
launched in June 2006, has topped 13 million units. Both brands work well with
the companys focus on multimedia and Internet functionality.
Strong in the mid to high

end
Sony Ericssons portfolio is particularly strong in the mid to high end, which
has helped it gain traction across several regions, including the high-end Asian
markets and Europe. Key handsets include the mid-tier W580, two new HSDPA
models (W910 and K850), and the P1 smart phone. The W960 and K630 could
also contribute significantly in 2008.
In general, we are somewhat less enthused about Sony Ericssons new product
portfolio, yet consumers have responded fairly well. We also note a change in
leadership, which has yet to translate into a new strategya point to watch
that could have an impact on performance.
Low end more of a focus

than it has been
Strategically, Sony Ericsson has recently put more emphasis on emerging

markets and lower-priced handsets. The benefits of this have already been
seen with some traction in Latin America. Managing the growing low-end
exposure (which we would characterize as still testing the water) is critical as it
could weigh further on ASPs and margins (as it has recently). We have yet to
see what impact the companys low-end ODM deal with Sagem will yield.
Of the regions where we believe the company can gain traction, we note Latin
America (for low end) where the company is considered a top 3 brand name as
well as in its core European market. Similar to Nokia, the U.S. has been a
disappointment given the lack of CDMA products and brand exposure.
24
Exhibit 31.
Sony Ericsson Handset Overview
10%
35,000
30,000
8%
25,000
6%
20,000
15,000
4%
10,000
40,000
2%
5,000
Shipments
4Q08E
3Q08E
2Q08E
1Q08E
4Q07E
3Q07A
2Q07A
1Q07A
4Q06A
3Q06A
2Q06A
1Q06A
4Q05A
3Q05A
2Q05A
1Q05A
4Q04A
3Q04A
2Q04A
0%
1Q04A
Market Share
Exhibit 32.
Sampling of Sony Ericsson Phones
W580
GSM
W910
HSDPA
K770
UMTS
P1
UMTS
K850
HSDPA
W960
UMTS
LG Electronics
A solid performer
25
LG remains a solid performer, but has yet to truly break out. The company
saw strong CDMA demand in 3Q07 (up over 35% QoQ), while demand for 3G
WCDMA was weak (down 32% QoQ) largely due to product transitions with key
carriers such as AT&T and Hutchison. We expect a WCDMA rebound in 4Q07 and
look for the new product momentum to carry into 2008.
More aggressive than its

peers in the low end
LG remains fairly well positioned at the mid and high end, but these segments
remain crowded and are areas where differentiation is difficult to show. In
terms of the low end, LG has been more aggressive than its peers (with
the exception of Nokia) and has showed some traction (in Latin America and
India, for example) as users look to upgrade to more capable phones. However,
we believe the company lacks the scale needed to compete directly with
Nokia, leaving it in much the same position as Samsung and Sony Ericsson
watching for opportunities to strategically push forward.
3G WCDMA a priority
In the future, we expect 3G WCDMA shipments to increase (this is a priority)

and more growth from the emerging markets (picking their spots). The company
also has an opportunity to gain share in North America (already 30%-40% of its
units) in the near term with Motorola restructuring. Management is optimistic on
the companys positioning and targets shipments of 100 million units next year.
We are less optimistic.
Portfolio getting upgraded
WCDMA shipments should improve with the launch of several new handsets
including the Viewty, and new iterations of the Chocolate and Shine in early
2008. The Viewty has sold 350,000 units in just five weeks in Europe, indicating
strong early adopter demand for high-end 5MP touch screen phones and raises
LGs brand value in the marketplace with a suggested price of 550.
The Shine has also been a success, selling over five million units since it was
launched 13 months ago in South Korea and nine months ago internationally
and averaging sales of 500,000 each month before 4Q07 with sales of 1 million
in November. Other handsets to watch in 2008 include the Venus and Voyager
(at Verizon), Shine (at AT&T) and an AT&T version of the Prada phone expected.
Exhibit 33.
LG Handset Overview
8%
7%
25,000
6%
20,000
5%
4%
15,000
3%
10,000
2%
5,000
1%
Shipments
26
Market Share
4Q08E
3Q08E
2Q08E
1Q08E
4Q07E
3Q07A
2Q07A
1Q07A
4Q06A
3Q06A
2Q06A
1Q06A
4Q05A
3Q05A
2Q05A
1Q05A
4Q04A
3Q04A
2Q04A
0%
1Q04A
30,000
Exhibit 34.
Sampling of LG Phones
Rumor
CDMA
Chocolate
EV-DO
Shine
HSDPA
Venus
EV-DO
Voyager
EV-DO
Viewty
HSDPA
Research in Motion
Leading the smart phone
charge
Building off its commanding share in enterprise, Research in Motion is now

pushing forward in the consumer smart phone market. The companys
Pearl and Curve devices in particular are riding a wave of strong demand for
email and other multimedia functionality and have exceeded the companys
shipment targets. Enterprise also remains strong with the 8800 and the
crossover Curve is selling well there.
International expansion has

a long way to go
Outside North America, RIM is now well established in Europe with solid
relationships with major carriers and has partnered with Carphone Warehouse in
the U.K. After years of obstacles, RIM has finally entered the Chinese market
via Alcatel Shanghai and its deal with China Mobile. RIM is initially targeting
multinational companies and enterprises in China, but we expect it to make
strides in the consumer market as it gains traction. India also remains a
potential growth driver, with traction limited by RIMs current allocation of
internal resources. Again we look for the initial traction to come in enterprise.
iPhone a demand catalyst,

not competitive threat so far
Despite high-profile entrants in the smart phone market, RIMs primary

challenge at the moment is meeting demand, not fending off
challengers. Carriers continue to look at Blackberry devices and data services
as a strong avenue to boost their average revenue per user. And while the
iPhone is a competing device, it has also been a strong catalyst for RIM and the
overall smart phone market, highlighting the value of email and multimedia and
increasing traffic in stores.
Keeping up with feature

trends
We expect RIM to continue to segment the market with different features (such
as WLAN and GPS) addressing various segments and believe its product road
map will spur further growth and replacements. There is speculation of a
BlackBerry 9000 series targeting the consumer market, which is expected in
early 2008 with evolutionary improvements such as 3G HSDPA, an enhanced
user interface, updated browser and stronger multimedia capabilities.
We also except RIM to introduce a touch screen smart phone, but do not expect
it to displace its QWERTY-based smart phones. Outside of the 9000 series, we
27
expect new iterations of the 8000 series, Curve and Pearl to ramp in 2008 that
feature 3G, updated cameras, GPS and/or WLAN.
RIM should continue to see market share gains and solid margins for the
foreseeable future. Despite its growing focus on the consumer market where it
would face much stronger competition, its growing distribution and geographical
reach should make for sustainable gains.
Exhibit 35.
Shipments
4Q08E
3Q08E
2Q08E
1Q08E
Market Share
Exhibit 36.
Sampling of Reserch in Motion Phones
8820
EDGE, GPS, Wi-Fi
8830
EV-DO, GPS
28
Pearl 8120
EDGE, Wi-Fi
Pearl 8130
EV-DO, GPS
Curve 8310
EDGE, GPS
Curve 8320
EDGE, Wi-Fi
0.0%
4Q07E
0
3Q07A
0.4%
2Q07A
1,500
1Q07A
0.8%
4Q06A
3,000
3Q06A
1.2%
2Q06A
4,500
1Q06A
1.6%
4Q05A
6,000
3Q05A
2.0%
2Q05A
7,500
1Q05A
Research in Motion Handset Overview
Handset Shipments
In this section, we expand our worldwide handset forecast to highlight the
specific trends in each major region and broadly look at a mature vs. emerging
market split. The key trends presented include the growing importance of
emerging markets (particularly Asia and the MEA) in the global handset mix, an
expanding mobile carrier footprint crossing country boundaries, and the first
signs of 4G discussions in North America and Western Europe.
Handset Shipments by Region

Emerging markets drive
handset shipments
We start off emphasizing the importance of emerging markets to both

subscriber net additions and handset shipments. To contrast the
significantly different growth opportunities these two groups represent, we
highlight the strong 2007-2011 CAGR of 12.9% for handset shipment growth in
emerging markets against a modest 5.0% for mature markets. Over time this
creates a measurable change in mix, with emerging markets climbing from
63.4% of global handset shipments in 2007 to 69.8% of global
shipments in 2011.
The two key regional drivers in the emerging market growth are Asia Pacific and
MEA. In Asia Pacific, we note China, India and Indonesia, which are expected to
grow at a strong 2007-2011 CAGR of 13.0%, 21.5% and 14.0%, respectively. In
the MEA, we note a 12.8% 2007-2011 CAGR for Nigeria with nearly 25 million
handset shipments in 2011.
Emerging markets sensitive

to economic risk and
political factors
We caution that developing regions are more sensitive to economic

downturns, government regulatory control, and political unrest than
mature markets and therefore could see more volatility. However, this
uncertainty is a double-edged sword and could result in our assumptions proving
conservative (as they have in the past), particularly in the case of our
expectations for replacement purchases.
Mature markets sensitive to

oil prices and a credit
crunch
Macroeconomic factors could weigh on mature markets as well, including

the potential for far-reaching impact of the sub-prime banking concerns and
escalating oil prices. While we dont believe a recession would lead to consumers
shutting down their mobile service, we could see replacement purchases being
delayed. This is particularly important factor in the U.S. and Western Europe,
where replacement purchases drive overall shipments.
While a faltering economy could have global repercussions on shipments, were
firm believers that handset shipments would weather a slowdown better and
see less volatility than most technology markets. Simply put, mobile
communication has implanted itself as a mandatory requirement for many jobs
and an invaluable resource in our personal lives for staying in touch, providing
mobile entertainment, and aiding personal safety.
29
Exhibit 37.
Worldwide Handsets Shipments by Selected Countries
2001
2002
Latin America
Brazil
8,684
9,881
Mexico
10,222
8,549
Rest of Latin America
14,828
13,508
2003
2004
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
15,876
11,159
18,199
28,407
14,998
32,455
35,074
17,490
41,653
27,702
19,465
59,430
31,375
23,402
64,372
29,155
24,778
78,003
33,499
26,074
82,689
37,145
27,183
85,807
41,076
28,218
88,210
18.6%
20.3%
37.1%
7.0%
4.8%
8.2%
East Europe
Russia
Ukraine
Rest of East Europe
6,194
1,807
16,590
10,164
1,989
22,547
19,896
3,990
24,896
28,031
7,579
32,437
28,677
8,671
39,194
38,757
13,855
52,626
41,944
16,982
56,266
42,634
15,219
67,822
45,729
16,730
72,467
48,785
18,595
76,154
51,125
20,373
81,285
20.5%
43.6%
22.6%
5.1%
4.7%
9.6%
Asia Pacific - Emerging

China
India
Indonesia
Rest of Asia Pacific
59,427
2,371
2,976
5,114
61,849
5,001
5,137
11,841
62,297
17,794
7,155
11,410
75,126
24,147
11,303
33,990
90,314
33,278
18,091
52,159
122,554
65,167
25,576
62,401
158,647
100,932
33,666
69,734
190,586
133,068
40,317
85,483
221,737
165,293
46,589
98,765
240,644
191,869
52,397
109,438
258,907
220,298
56,808
118,908
26.3%
54.3%
47.3%
57.2%
13.0%
21.5%
14.0%
14.3%
MEA
Nigeria
Rest of MEA
388
22,810
1,144
25,501
1,699
37,248
6,321
51,914
10,210
83,475
13,172
93,028
15,372
103,733
18,241
115,700
20,662
132,892
23,457
148,954
24,875
173,108
73.4%
29.2%
12.8%
13.7%
151,412
177,111
25,699
17.0%
231,618
54,507
30.8%
346,710
115,092
49.7%
458,286
111,576
32.2%
593,733
135,447
29.6%
716,425
122,692
20.7%
841,006
124,582
17.4%
963,126
122,120
14.5%
1,060,428
97,302
10.1%
1,163,193
102,765
9.7%
32.6%
12.9%
Emerging Markets
Delta
Growth
2011(E) CAGR 03-07 CAGR 07-11
North America
64,283
80,905
80,784
101,988
122,226
142,790
153,509
165,190
177,085
185,384
190,338
17.4%
5.5%
West Europe
France
Germany
Italy
Spain
UK
Rest of West Europe
15,876
21,754
7,461
11,886
18,902
25,822
14,578
20,414
18,763
12,875
20,215
38,201
15,839
24,150
17,515
13,853
22,280
30,056
17,026
28,678
21,911
13,230
26,317
33,634
19,462
29,569
25,725
15,614
29,583
35,468
20,818
33,847
34,060
18,884
30,760
30,797
20,988
37,197
35,015
19,555
31,718
35,142
22,275
40,309
38,132
20,666
33,148
35,992
23,490
43,098
41,137
21,647
34,540
37,175
24,693
45,229
43,913
22,458
35,926
39,247
25,828
47,041
46,682
23,183
37,297
40,898
7.3%
11.4%
18.9%
9.0%
9.2%
4.0%
5.3%
6.0%
7.5%
4.3%
4.1%
3.9%
Asia Pacific - Mature

Japan
South Korea
Rest of Asia Pacific*
38,098
13,008
14,958
39,963
13,172
11,525
50,442
13,367
12,133
45,560
14,865
13,578
45,807
14,550
13,982
47,099
16,431
16,479
48,979
18,029
13,114
50,717
18,158
18,623
50,897
18,347
20,724
51,130
18,557
20,914
52,021
18,959
20,887
-0.7%
7.8%
2.0%
1.5%
1.3%
12.3%
232,048
270,611
38,563
16.6%
280,420
9,809
3.6%
316,786
36,366
13.0%
351,987
35,201
11.1%
391,965
39,978
11.4%
413,246
21,281
5.4%
443,210
29,964
7.3%
468,140
24,930
5.6%
487,452
19,312
4.1%
503,132
15,681
3.2%
10.2%
5.0%
Total
383,460
447,722
512,038
Delta
64,262
64,316
Growth
-6.7%
16.8%
14.4%
* Includes Australia, Hong Kong, New Zealand, and Taiwan
663,496
151,458
29.6%
810,273
146,777
22.1%
985,698
175,425
21.7%
1,129,671
143,973
14.6%
1,284,216
154,545
13.7%
1,431,266
147,050
11.5%
1,547,880
116,614
8.1%
1,666,325
118,445
7.7%
21.9%
10.2%
Mature Markets
Delta
Growth
30
Exhibit 38.
Worldwide Handset Shipments by Selected Countries (% of Total Shipments)
2001
2002
2003
2004
Latin America
Brazil
2.3%
2.2%
3.1%
4.3%
Mexico
2.7%
1.9%
2.2%
2.3%
3.9%
3.0%
3.6%
4.9%
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E)
4.3%
2.2%
5.1%
2.8%
2.0%
6.0%
2.8%
2.1%
5.7%
2.3%
1.9%
6.1%
2.3%
1.8%
5.8%
2.4%
1.8%
5.5%
2.5%
1.7%
5.3%
East Europe
Russia
Ukraine
Rest of East Europe
1.6%
0.5%
4.3%
2.3%
0.4%
5.0%
3.9%
0.8%
4.9%
4.2%
1.1%
4.9%
3.5%
1.1%
4.8%
3.9%
1.4%
5.3%
3.7%
1.5%
5.0%
3.3%
1.2%
5.3%
3.2%
1.2%
5.1%
3.2%
1.2%
4.9%
3.1%
1.2%
4.9%
15.5%
0.6%
0.8%
1.3%
13.8%
1.1%
1.1%
2.6%
12.2%
3.5%
1.4%
2.2%
11.3%
3.6%
1.7%
5.1%
11.1%
4.1%
2.2%
6.4%
12.4%
6.6%
2.6%
6.3%
14.0%
8.9%
3.0%
6.2%
14.8%
10.4%
3.1%
6.7%
15.5%
11.5%
3.3%
6.9%
15.5%
12.4%
3.4%
7.1%
15.5%
13.2%
3.4%
7.1%
0.1%
5.9%
0.3%
5.7%
0.3%
7.3%
1.0%
7.8%
1.3%
10.3%
1.3%
9.4%
1.4%
9.2%
1.4%
9.0%
1.4%
9.3%
1.5%
9.6%
1.5%
10.4%
Emerging Markets
39.5%
39.6%
45.2%
52.3%
56.6%
60.2%
63.4%
65.5%
67.3%
68.5%
69.8%
North America
16.8%
18.1%
15.8%
15.4%
15.1%
14.5%
13.6%
12.9%
12.4%
12.0%
11.4%
West Europe
France
Germany
Italy
Spain
UK
Rest of West Europe
4.1%
5.7%
1.9%
3.1%
4.9%
6.7%
3.3%
4.6%
4.2%
2.9%
4.5%
8.5%
3.1%
4.7%
3.4%
2.7%
4.4%
5.9%
2.6%
4.3%
3.3%
2.0%
4.0%
5.1%
2.4%
3.6%
3.2%
1.9%
3.7%
4.4%
2.1%
3.4%
3.5%
1.9%
3.1%
3.1%
1.9%
3.3%
3.1%
1.7%
2.8%
3.1%
1.7%
3.1%
3.0%
1.6%
2.6%
2.8%
1.6%
3.0%
2.9%
1.5%
2.4%
2.6%
1.6%
2.9%
2.8%
1.5%
2.3%
2.5%
1.5%
2.8%
2.8%
1.4%
2.2%
2.5%

Japan
South Korea
9.9%
3.4%
3.9%
8.9%
2.9%
2.6%
9.9%
2.6%
2.4%
6.9%
2.2%
2.0%
5.7%
1.8%
1.7%
4.8%
1.7%
1.7%
4.3%
1.6%
1.2%
3.9%
1.4%
1.5%
3.6%
1.3%
1.4%
3.3%
1.2%
1.4%
3.1%
1.1%
1.3%
60.5%
60.4%
54.8%
47.7%
43.4%
39.8%
36.6%
34.5%
32.7%
31.5%
30.2%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

China
India
Indonesia
MEA
Nigeria
Rest of MEA
Mature Markets
North America
165.2 million mobile
handsets to ship in 2008E
We believe handset shipments in North America will reach 165.2 million

units in 2008, up 7.6% from 2007, with most of the increase coming from
replacements. We expect shipments to continue to slowly increase over the next
several years, reaching 190.3 million units in 2011, representing a 20072011 CAGR of 5.5%. New subscriber growth is minimal (a 3.2% CAGR), showing
just how important the replacement market is in this region.
3G transition well under way
North America is well into the 3G transition with CDMA carriers Verizon
completing its EV-DO Rev. A network build and Sprint Nextel already completing
the majority of its EV-DO Rev. A network build. Both of these carriers are
already moving onto planning for Rev. B and 4G planning. AT&T has also already
widely deployed its 3G WCDMA/HSDPA network and should see wide deployment
of HSUPA in 2008.
In sizing the 3G market, we project 2008 EV-DO shipments of 66.1 million in
this region (out of total CDMA shipments of 101.9 million) with a 2007-2011
CAGR of 20.0%. WCDMA continues to trail EV-DO in absolute numbers, although
31
we saw a sharp ramp of the technology in 2007 at AT&T. We expect total

WCDMA shipments to reach 33.0 million in 2008 (out of a total
GSM/WCDMA market of 60.8 million) with a 2007-2011 CAGR of 48.4%.
T-Mobile soon to join the big

three with 3G
T-Mobile is the only major carrier yet to deploy commercial 3G service,

although not for lack of preparation. The carrier has earmarked about $2.7
billion for 3G infrastructure equipment over the next several years. At this point
T-Mobile is actively clearing spectrum for its WCDMA/HSPA build and should
launch commercial service in early 2008. T-Mobile started selling its first 3G
handset (Samsung T639) in October 2007.
With 3G well entrenched, the carrier focus at this point is on retiring older
2G technologies and preparing for 4G. Sprint Nextel is deemphasizing iDEN,
although the carrier continues to face a bit of a dilemma converting its iDEN
customers to CDMA (given the superior performance of push-to-talk over the
proprietary iDEN network). Over the long term, GSM/GPRS and CDMA 1xRTT are
also destined for lesser roles at AT&T, Verizon and Sprint.
Verizon chooses LTE for 4G
4G technology discussions are already heating up, with Verizon Wireless

already selecting LTE, which is a departure from the Qualcomm-promoted
path of UMB. In preparation for 4G, we expect Verizon to be a major player in
the FCCs upcoming spectrum auction in January and a possible launch its 4G
LTE network in 2010 (at the earliest).
Will Sprint back away from

WiMAX?
Sprint still favors mobile WiMAX as its 4G choice and claims it is on track
for a 2008 commercial launch. But with CEO Gary Forsees resignation in late
2007, many have questioned whether Sprints new leader Dan Hesse will be as
committed to the unproven technology. Fueling the fire is the recent decision by
the company (made prior to Mr. Hesses hiring) to end its partnership with
Clearwire to co-deploy WiMAX in the U.S.
With Sprint contractually obligated to certain coverage requirements in
2008, some level of commercial service is likely. We expect the first wave of
products supporting the network to be limited to PC cards and USB modems. At
this point, we are not building WiMAX handsets into the forecast and would look
for most that do ship to be multi-mode devices including CDMA.
32
Motorola safe in the No. 1

market share spot
Despite its well-documented troubles, Motorola continues to lead the North

American handset market by a wide margin, with an estimated market share
of approximately 36% in 2007, down a modest 3% points year over year
(compared to their overall decline of 8% points). The No. 2 and No. 3 vendors
Samsung (~19%, +2% YoY) and LG (~16%, +1% YoY) trail Motorola
by a wide margin, but are building on a strong base and are gaining share as
Motorola reorganizes.
Keep an eye on RIM and

Apple
Nokia (~8%, 6% YoY) is a distant No. 4, losing share year over year and yet to
gain much 3G footing, although this could change as WCDMA gains wider
deployment. Up-and-comers in this region include Research in Motion
(Blackberry) and Apple (iPhone), both making a strong push in the smart phone
market and gaining mindshare in the marketplace.
Exhibit 39.
Total Handset Shipments in North America
2001
2002
AMPS/TACS/NMT
1,152
235
GSM/GPRS/EDGE
5,172
9,951
TDMA
13,219
15,500
CDMA
37,173
46,849
EVDO
0
0
W-CDMA
0
0
PDC
0
0
iDEN
7,568
8,369
Total
64,283
80,905
Growth
-11.4%
25.9%
2003
142
11,198
7,786
52,043
0
0
0
9,614
80,784
-0.1%
2004
44
18,730
3,145
64,825
3,408
334
0
11,502
101,988
26.2%
2005
21
24,563
1,066
66,613
13,445
874
0
15,645
122,226
19.8%
2006
17
33,115
282
60,972
27,844
3,141
0
17,420
142,790
16.8%
2007(E)
0
31,623
0
47,434
50,658
14,583
0
9,211
153,509
7.5%
2008(E)
0
27,752
0
35,846
66,076
33,038
0
2,478
165,190
7.6%
2009(E)
0
18,417
0
21,250
86,772
49,761
0
885
177,085
7.2%
2010(E)
0
7,786
0
11,123
101,961
64,514
0
0
185,384
4.7%
2011(E) CAGR 07-11
0
NM
3,997
-40.4%
0
NM
10,469
-31.5%
105,067
20.0%
70,806
48.4%
0
NM
0
NM
190,338
5.5%
2.7%
Latin America
handsets to ship in 2008E
We expect handset shipments in Latin America to reach 131.9 million

units in 2008, up 10.7% from 2007. And by 2011, we look for shipments to
increase to 157.5 million, representing a solid 2007-2011 CAGR of 7.2%. The
current state of affairs in Latin America is very similar to that seen last year.
GSM is by far the dominant technology in this region, with 3G WCDMA yet to
gain much traction and CDMA and TDMA shipments declining. Network
transitions away from CDMA and the older TDMA standard in the past two years
have driven the GSM strength.
Lower handset prices still a

growth driver
New subscriber activity in this region remains fairly solid, helped by everdecreasing handset prices. Handset prices have come down faster than we
expected, with the lowest now below $20. With single chip baseband/radio
handsets yet to see wide deployment, prices will fall further, helping drive even
further subscriber penetration in this region. We are also seeing the larger
installed base help drive more replacement purchases.
3G in its early stages
Mobile carriers are yet to heavily push 3G adoption in this priceconscious region, but we are starting to see early stages of 3G deployments in
key markets. For example, America Movil has already started investing heavily
in 3G in several markets with its Brazilian unit, Claro, currently rolling out 3G
networks in Sao Paulo, Rio de Janeiro, Porto Alegre and the capital Braslia.
2009 and 2010 should see

good 3G traction
We see 2008 as a transitional year for 3G WCDMA, with stronger 3G

adoption coming in 2009 and 2010. As the market develops, we expect total
WCDMA shipments to grow from 5.3 million in 2008 to 30.7 million in 2011, or a
2007-2011 CAGR of 83.0%.
We note that demand in Latin America is perhaps more volatile than in
any other region, and history has shown that handset demand can be very
inconsistent from one quarter to another depending on carrier priorities. Key
factors include the involvement in regulatory bodies in competition as well as
unpredictable changes in subsidy policies in large markets such as Brazil which
could have a material impact on purchasing decisions.
Nokia No. 1; LG and Sony

Ericsson making a strong
push
33
From a vendor perspective, No. 1 Nokia (~31%, 1% YoY) and No. 2

Motorola (~28%, 3% YoY) continue to dominate handset shipments in
this region. However, both companies face a growing competitive threat,
with Sony Ericsson (~13%, +5% YoY) and LG (~12%, +4% YoY) showing
strong share gains YoY and Samsung (~8%, +2% YoY) solid gains.
Exhibit 40.
Total Handset Shipments in Latin America
2001
2002
AMPS/TACS/NMT
1,493
322
GSM/GPRS
2,666
4,772
TDMA
19,236
15,569
CDMA
10,338
11,276
EVDO
0
0
W-CDMA
0
0
PDC
0
0
iDEN
0
0
Total
33,734
31,938
Growth
5.5%
-5.3%
2003
188
14,335
17,096
13,615
0
0
0
0
45,234
41.6%
2004
93
35,503
13,160
27,104
0
0
0
0
75,860
67.7%
2005
82
62,648
10,140
21,326
21
0
0
0
94,216
24.2%
2006
77
79,829
4,812
21,319
559
0
0
0
106,596
13.1%
2007(E)
76
106,145
1,191
8,102
894
2,740
0
0
119,149
11.8%
2008(E)
0
117,818
792
6,333
1,715
5,277
0
0
131,935
10.7%
2009(E)
0
123,341
285
3,699
4,268
10,670
0
0
142,261
7.8%
2010(E)
0
122,060
0
1,802
5,855
20,418
0
0
150,135
5.5%
2011(E) CAGR 07-11
0
NM
119,231
2.9%
0
NM
788
-44.2%
6,773
65.9%
30,713
83.0%
0
NM
0
NM
157,505
7.2%
4.9%
Western Europe
handsets in 2008E
We expect handset shipments in Western Europe to reach 190.5 million

units in 2008, up 6.1% from 2007. Europe is a replacement-driven market,
which has stayed strong with the move to 3G. We project shipments in this
region to continue to show modest growth as 3G adoption increases reaching
220.9 million units in 2011, representing a 2007-2011 CAGR of 5.3%.
From a technology standpoint, Western Europe is uncomplicated, with the
pervasive GSM/GPRS technology steadily giving way to WCDMA and
HSPA traction. Most carriers at this point are well into their second and third
phase of 3G deployment, expanding network capacity to meet subscriber
demand (to support data intensive features such as video calling, music, and
streamed mobile TV). With that said, we highlight that many consumers are still
buying 3G handsets for their high-end features and styling (as the best handset
available) and not necessarily for the associated data services.
34
3G getting the upper hand
Carriers continue to shift their handset portfolios toward a higher 3G mix (in
some cases roughly half the handsets offered), and prices for unsubsidized 3G
handsets continue to come down. Given the strong support, we now expect
141.9 million 3G WCDMA handsets to ship in Europe in 2008, growing to
198.8 million in 2011. This implies a 2007-2011 CAGR of 19.5%.
Nokia No. 1, but competitive

pressures heating up
Nokia (~39%, +3% YoY) remains the clear leader in Europe, with the
strongest brand recognition and a deep GSM and 3G WCDMA portfolio that is
well tailored for this region. However, competitive pressures are increasing with
attractive handsets from Sony Ericsson (~16%, +4% YoY), Samsung (~18%,
+3% YoY) and LG (~5%, +1 YoY) putting pressure on the vendor in both
GSM/GPRS and 3G WCDMA markets. Without a distinguishing 3G portfolio,
Motorola (~12%, 5% YoY) has seen it share slide in this region and is unlikely
to see much of a recovery until possibly late 2008 or 2009.
The iPhone could drive

replacement rates higher, as
it did in the U.S.
We note the introduction of Apples iPhone in this region by T-Mobile in Germany

on November 9, 2007, by O2 in the U.K. on the same day, and by Orange in
France on November 29. We look for the iPhone to help push up
replacement rates in 2008 similar to what happened in the U.S. in 2H07.
Nokia, as well as the other top OEMs, is planning a new wave of touch screen
models in response, which only raises the design bar higher and should pull
more consumers into stores.
Exhibit 41.
Total Handset Shipments in Western Europe
2001
2002
AMPS/TACS/NMT
586
44
GSM/GPRS
101,115
124,863
TDMA
0
0
CDMA
0
0
EVDO
0
0
W-CDMA
0
139
PDC
0
0
iDEN
0
0
Total
101,701
125,046
Growth
-26.1%
23.0%
2003
10
123,197
0
0
0
486
0
0
123,694
-1.1%
2004
3
129,708
0
0
0
11,085
0
0
140,795
13.8%
2005
1
128,090
0
0
0
27,331
0
0
155,422
10.4%
2006
0
109,112
0
0
0
60,054
0
0
169,166
8.8%
2007(E)
0
82,084
0
0
0
97,531
0
0
179,616
6.2%
2008(E)
0
48,583
0
0
0
141,939
0
0
190,522
6.1%
2009(E)
0
38,207
0
0
0
162,881
0
0
201,087
5.5%
2010(E)
0
29,605
0
0
0
181,861
0
0
211,466
5.2%
2011(E) CAGR 07-11
0
NM
22,093
-28.0%
0
NM
0
NM
0
NM
198,835
19.5%
0
NM
0
NM
220,927
5.3%
4.5%
Eastern Europe
handsets in 2008E
We expect handset shipments in Eastern Europe to reach 127.7 million

units in 2008, up 9.1% from 2007. The strong growth is coming as more
replacement activity occurs and subscriber growth remains solid, particularly in
the larger countries such as Russia, Poland and the Ukraine. We look for
shipments to increase to 152.8 million units in 2011, representing a 2007-2011
CAGR of 7.3%.
Handset trends have little to

do with subscriber trends in
this region
Despite very strong new subscriber trends in Eastern Europe, handset

shipments have very little to do with subscriber trends in this region. We
will go into this in more detail later, but Eastern European subscriber figures are
inflated by a large number of multiple SIM card users. We believe as much as
30% of the subscriber base could reflect second and third SIM cards used to
avoid high roaming charges and not associated with a handset.
Aside from a few small pockets of CDMA, Eastern Europe is dominated by
GSM. We expect GSM to remain the dominant technology throughout our
forecast horizon, although 3G WCDMA could start to gain some traction in 2009
and 2010 after network builds pick up steam in 2008.
3G rollouts in 2008E
Russian GSM carriers MegaFon, Vimpelcom and MTS have expanded their
footprint in Eastern Europe and are gearing up for 3G rollouts in 2008. With
2008 as a starting point, we expect it will take several years for 3G to gain
traction with consumers.
Exhibit 42.
Total Handset Shipments in Eastern Europe
2001
2002
AMPS/TACS/NMT
211
36
GSM/GPRS
24,280
34,499
EDGE
0
0
TDMA
92
80
CDMA
8
86
EVDO
0
0
W-CDMA
0
0
PDC
0
0
iDEN
0
0
Total
24,591
34,700
Growth
45.5%
41.1%
35
2003
10
48,466
0
76
230
0
0
0
0
48,782
40.6%
2004
6
67,778
0
41
222
0
0
0
0
68,047
39.5%
2005
6
76,104
0
10
422
0
0
0
0
76,542
12.5%
2006
7
104,734
0
0
498
0
0
0
0
105,238
37.5%
2007(E)
7
111,556
0
0
749
0
2,880
0
0
115,192
9.5%
2008(E)
0
119,140
0
0
880
0
5,655
0
0
125,675
9.1%
2009(E)
0
122,278
0
0
1,044
0
11,604
0
0
134,926
7.4%
2010(E)
0
120,712
0
0
1,292
0
21,530
0
0
143,534
6.4%
2011(E) CAGR 07-11
0
NM
113,060
0.3%
0
NM
0
NM
1,528
19.5%
0
NM
38,196
90.8%
0
NM
0
NM
152,784
7.3%
6.4%
Asia Pacific
537.0 million mobile handset
shipments in 2008E
Asia Pacific remains the single most important contributor to our handset
forecast, with India and China the two most important countries in the region.
With these two countries as the foundation for growth, we project handset
shipments in Asia Pacific will reach 537.0 million units in 2008, up 21.2%
from 2007. As Asia Pacific matures, we are starting to see a bigger replacement
market, which is driving both growth and interest in higher-tier handsets. With
this in mind, we expect shipments to reach 746.8 million units in 2011,
representing a 2007-2011 CAGR of 13.9%.
GSM well penetrated, but

other technology has good
support as well
Similar to North America, Asia Pacific has a diverse mix of 2G and 3G

technologies. GSM continues to have the highest penetration of any one
technology and includes wide availability in the most important countries
including India, China, and Indonesia. CDMA has a large presence in the region
as well, with large deployments in China, South Korea, Japan and India.
3G WCDMA and EV-DO networks are already well established in Japan,
South Korea, Taiwan and Australia, but have yet to be deployed in the two
flagship countries, China and India. Commercial 3G service in China is unlikely
until maybe 2H08 or possibly 2009, while 3G in India could materialize in 2008
although regulatory approval is a stumbling block here as well.
China waiting for TD-SCDMA

to be ready
The 3G delays in China appear to be rooted in the still-emerging TD-SCDMA

technology, Chinas home-grown 3G spin. Our checks show that the TD-SCDMA
standard is still not ready for commercial adoption, with more time needed to
resolve technical issues. Until these issues are resolved, its unlikely any 3G
licenses, TD-SCDMA or the more mature WCDMA and EV-DO versions, will be
awarded. In this connection, China Mobile has reportedly cut its orders on 3G
handsets (for trials), as chipsets in the current marketplace are unable to meet
its specifications.
3G not likely to drive much

shipment upside
Even after 3G is launched, we dont see it as a huge catalyst for incremental

subscriber growth or handset sales. 2G GSM and CDMA sales have remained
strong and not seen any demand lull in anticipation of 3G. As such, once 3G is
launched, we expect a gradual mix shift toward 3G and a likely small
increase in handset ASP.
To put the near-term 3G handset opportunities in perspective, China Mobile is
expected to initiate bidding for the first batch of about 300,000-400,000 TDSCDMA mobile phones in early 2008. The handsets will be mainly used for
testing and optimizing TD-SCDMA networks in preparation for large-scale
sourcing.
36
India seeing strong carrier

commitment
In India, the government recently allowed carriers to hold licenses for both
CDMA and GSM. As a result, BSNL is looking to invest in a CDMA network while
continuing to expand its GSM network and Reliance plans to roll out GSM
services nationwide, augmenting its CDMA network. The wider availability of
both technologies bodes well for increased penetration in this region and
overall handset shipment strength.
Mobile number portability

could spur shipments late in
2008
Another driver in this country is mobile number portability, which is expected

to hit India in 4Q08, with initial implementation on a trial basis in major urban
markets. This could drive potential upside to our handset estimates.
Nokia No. 1 and competition

limited to certain markets
Nokia (~43%, +3% YoY) has a very strong position in Asia Pacific, led
by its dominant position in India and strong position in China. Asia Pacific has
been Motorolas (~7%, 11% YoY) most challenging region, with the
company seeing its largest share decrease here of all the regions. Samsung
(~14%, +4% YoY) is a distant No. 2 in this region and Sony Ericsson (~7%,
+1% YoY) and LG (~6%, 1% YoY) have solid positions but are no threat to
Nokia in any of the emerging markets.
Chinese vendors gaining

share
Led by Lenovo and ZTE, domestic Chinese vendors as a group are gaining
share in China and will use this as a base for slow and steady international
expansion, primarily in Southeast Asia and India.
Exhibit 43.
Total Handset Shipments in Asia Pacific
2001
2002
AMPS/TACS/NMT
30
9
GSM/GPRS
85,643
87,738
TDMA
0
0
CDMA
19,830
29,134
EVDO
0
134
W-CDMA
27
228
PDC
30,423
31,247
iDEN
0
0
Total
135,953
148,488
Growth
7.6%
9.2%
2003
9
92,224
0
42,761
4,584
2,776
32,243
0
174,598
17.6%
2004
3
121,858
0
48,063
7,646
10,204
30,796
0
218,570
25.2%
2005
3
166,438
0
41,970
13,409
22,795
23,565
0
268,181
22.7%
2006
3
218,601
0
57,980
28,457
37,349
13,317
0
355,707
32.6%
2007(E)
0
278,710
0
42,095
55,388
61,591
5,317
0
443,101
24.6%
2008(E)
0
336,669
0
26,848
77,321
93,967
2,148
0
536,952
21.2%
2009(E)
0
353,184
0
13,069
99,576
155,588
934
0
622,351
15.9%
2010(E)
0
304,803
0
5,480
114,387
260,281
0
0
684,950
10.1%
2011(E) CAGR 07-11
0
NM
275,565
-0.3%
0
NM
2,240
-52.0%
123,967
22.3%
345,016
53.8%
0
NM
0
NM
746,787
13.9%
9.0%
Middle East and Africa

133.9 million mobile handset
shipments in 2008E
We expect handset shipments in Middle East and Africa to reach 133.9

million in 2008, up 12.5% from 2007. The key to our forecast in this region
remains new subscriber growth, which we believe is sustainable at a double-digit
pace throughout our forecast horizon. We look for shipments to increase to
198.0 million units in 2011, representing a 2007-2011 CAGR of 13.5%.
MEA enjoys a dynamic and competitive carrier landscape, which we view
as a positive influence on both subscriber growth and handset shipments and
reduces risk of under investment. Several multi-national carriers have emerged
such as Orascom, MTN and Zain dominating market share. However, the
attractive growth profile of MEA has lured larger European carriers such as
Vodafone (looking at Telkom SAs 50% stake in Vodacom) and France Telecom,
which is already present in 12 African countries (recently acquired a 51% stake
in Telkom Kenya and won a fixed, mobile and internet services license in Niger).
A lot of 2G growth still

possible
From a technology standpoint, we expect growth in this region to come still

primarily from 2G technologies, particularly GSM, although there is a
smattering of CDMA in this region. With handset prices continuing to fall (sub$20 GSM handsets and $20 CDMA handsets already) and competition driving
service prices lower, we are comfortable that mobile services will reach more
and more low-income users driving meaningful 2G handset shipments growth.
3G WCDMA ramp already

under way
Were also already seeing a meaningful amount of 3G WCDMA shipment

growth in this region. Some comes from 3G over 2G network use (in the more
affluent countries) and some from initial commercial service from several
carriers. Vodacom already has commercial services in South Africa and MTN has
also conducted trials for its 3G network in Nigeria. Zain is expected to launch
GSM and 3G services in Saudi Arabia in 1H08.
3G WCDMA adoption should continue to increase meaningfully over the next few
years and we are building a fairly steep 3G ramp with a 2007-2011 CAGR of
78.8%. Most of the 3G traction will continue to come from the small number of
37
affluent Middle East countries, where the 3G ramp mirrors that of the more
mature Western Europe and Asia Pacific markets.
Nokia No. 1 and no one

ready to threaten its
dominance
MEA is one of Nokias strongest regions with the company accounting for
more than half the shipments. Nokia is particularly well positioned in Africa and
should benefit from the strong growth and low subscriber penetration. Motorola
has pulled back sharply in the region as it restructures its operations and
deemphasizes the low end.
Exhibit 44.
Total Handset Shipments in the Middle East and Africa by Technology
2001
2002
2003
2004
AMPS/TACS/NMT
163
40
10
3
GSM/GPRS
22,093
25,779
37,774
57,099
TDMA
298
292
292
161
CDMA
645
534
871
972
EVDO
0
0
0
0
W-CDMA
0
0
0
0
PDC
0
0
0
0
iDEN
0
0
0
0
Total
23,199
26,644
38,947
58,235
Growth
-9.9%
14.9%
46.2%
49.5%
2005
2
91,441
69
2,011
23
139
0
0
93,686
60.9%
2006
1
102,791
28
2,352
101
927
0
0
106,200
13.4%
2007(E)
0
111,815
14
2,859
248
4,169
0
0
119,105
12.2%
2008(E)
0
120,681
0
3,215
536
9,510
0
0
133,942
12.5%
2009(E)
0
135,128
0
3,532
1,075
13,820
0
0
153,555
14.6%
2010(E)
0
142,929
0
3,103
2,241
24,138
0
0
172,411
12.3%
2011(E) CAGR 07-11
0
NM
150,072
7.6%
0
-100.0%
2,772
-0.8%
3,762
97.3%
41,379
77.5%
0
NM
0
NM
197,984
13.5%
14.8%
Handset Shipments by Technology

3G transition hits the tipping
point; GSM foundation still
strong
In this section, we present our worldwide handset forecast by technology. The

key technology trends in this forecast include the growing importance of 3G
technologies (EV-DO and WCDMA/HSPA), the decline of mainstream 2G
technologies (GSM and CDMA), and the disappearance of legacy technologies
(TDMA, iDEN and PDC). We expect all technologies except EV-DO and
WCDMA/HSPA to decline over time with the growth in EV-DO primarily
coming from CDMA subscribers and WCDMA coming from GSM subscribers.
GSM 60.0% of 2008E

shipments and 41.0% of
2011E shipments
GSM/GPRS/EDGE handsets continue to be the dominant technology,

accounting for 770.6 million handsets, or approximately 60% of total
shipments, in 2008. We expect GSM to remain the dominant technology until
WCDMA overtakes it in 2011. By then we project the GSM/GPRS/EDGE
contribution to fall to 684.0 million units or only 41.0% of total shipments (a
delta of 19.0% from 2008).
We do not split EDGE capability out within our GSM forecast. Although there is a
distinction in the internal technology of EDGE handsets, we dont believe
consumers see EDGE as a check box feature.
GSM has a global base with the incremental growth primarily coming from
emerging markets: Latin America, the Middle East & Africa and Asia. Even with
3G starting to emerge in these regions, we dont anticipate much GSM
displacement given the strong new subscriber growth, which is primarily at the
low end of the market. In the more mature and less price-sensitive European
and North American markets, we see 3G displacing GSM in relative importance.
38
2G CDMA 5.7% of 2008E

shipments and only 1.1% of
2011E shipments, but
In the case of CDMA, we expect shipments of 73.1 million in 2008, or

5.7% of total shipments, down from 101.2 million in 2007. By 2011 we
expect CDMA shipments to decline to only 17.8 million, or 1.1% of total
shipments. This represents a 2007-2011 CAGR of 35.2%.
3G EV-DO and WCDMA is

ramping and filling the 2G
CDMA void
Although CDMA is declining much faster than GSM, the fall doesnt
represent a huge loss for CDMA, as Qualcomm is enabling a faster
transition to CDMAs next generation 3G technology EV-DO and EV-DO
Rev. A technologies. However, certain carriers have chosen to disengage from
CDMA (for example Vivo in Brazil) and move to the economies of GSM networks,
weighing on our forward CDMA/EV-DO projections, particularly in Latin America
and possibly further down the road in India (Reliance) and the U.S. (Verizon).
We are generally keeping our near-term expectations for CDMA-based handsets
within the forecast range given by Qualcomm, although our WCDMA estimates
are more aggressive and the company does not provide EV-DO detail (our
estimates are a rough take on the market).
Older technologies TDMA (primarily in Latin America), iDEN (primarily U.S.),
PDC (Japan), and analog (various rural markets) still have a small user base
spread out throughout the world. We expect a relatively sharp subscriber
drop-off in all these legacy technologies (although there is not much to
lose) as carriers no longer actively support the technologies.
TDMA, iDEN, and PDC

phasing out
We are eliminating analog handsets from our 2008 estimates and TDMA, PDC,
and iDEN from 2010, although these technologies could see an earlier end. In
most cases, we expect carriers to actively purge their older technology
subscribers with financial penalties, as AT&T has done in the U.S. with TDMA.
Exhibits 45-46 present our handset shipment forecast by technology.
Exhibit 45.
Total Handset Shipments by Technology
2001
2002
AMPS/TACS/NMT
3,636
686
GSM/GPRS/EDGE
240,968
287,601
TDMA
32,844
31,440
CDMA
67,994
87,879
EVDO
0
134
WCDMA/HSPA
27
367
PDC
30,423
31,247
iDEN
7,568
8,369
Total
383,460
447,722
Growth
-6.7%
16.8%
39
2003
369
327,195
25,249
109,521
4,584
3,263
32,243
9,614
512,038
14.4%
2004
151
430,676
16,508
141,186
11,054
21,623
30,796
11,502
663,496
29.6%
2005
115
549,284
11,284
132,343
26,898
51,139
23,565
15,645
810,273
22.1%
2006
105
648,180
5,121
143,121
56,960
101,472
13,317
17,420
985,698
21.7%
2007(E)
84
721,933
1,206
101,238
107,188
183,495
5,317
9,211
1,129,671
14.6%
2008(E)
0
770,643
792
73,121
145,648
289,386
2,148
2,478
1,284,216
13.7%
2009(E)
0
790,555
285
42,594
191,691
404,323
934
885
1,431,266
11.5%
2010(E)
0
727,895
0
22,799
224,444
572,741
0
0
1,547,880
8.1%
2011(E) CAGR 03-07 CAGR 07-11
0
-31.0%
NM
684,017
21.9%
-1.3%
0
-53.3%
NM
17,796
-1.9%
-35.2%
239,568
119.9%
22.3%
724,944
173.8%
41.0%
0
-36.3%
NM
0
-1.1%
-100.0%
1,666,325
21.9%
10.2%
7.7%
Exhibit 46.
Total Handset Shipments by Technology (% of Total Market)
2001
2002
2003
2004
AMPS/TACS/NMT
0.9%
0.2%
0.1%
0.0%
GSM/GPRS/EDGE
62.8%
64.2%
63.9%
64.9%
TDMA
8.6%
7.0%
4.9%
2.5%
CDMA
17.7%
19.6%
21.4%
21.3%
EVDO
0.0%
0.0%
0.9%
1.7%
WCDMA/HSPA
0.0%
0.1%
0.6%
3.3%
PDC
7.9%
7.0%
6.3%
4.6%
iDEN
2.0%
1.9%
1.9%
1.7%
Total
100.0%
100.0%
100.0%
100.0%
2005
0.0%
67.8%
1.4%
16.3%
3.3%
6.3%
2.9%
1.9%
100.0%
2006
0.0%
65.8%
0.5%
14.5%
5.8%
10.3%
1.4%
1.8%
100.0%
2007(E)
0.0%
63.9%
0.1%
9.0%
9.5%
16.2%
0.5%
0.8%
100.0%
2008(E)
0.0%
60.0%
0.1%
5.7%
11.3%
22.5%
0.2%
0.2%
100.0%
2009(E)
0.0%
55.2%
0.0%
3.0%
13.4%
28.2%
0.1%
0.1%
100.0%
2010(E)
0.0%
47.0%
0.0%
1.5%
14.5%
37.0%
0.0%
0.0%
100.0%
2011(E)
0.0%
41.0%
0.0%
1.1%
14.4%
43.5%
0.0%
0.0%
100.0%
3G seeing a sharp ramp
We have adjusted our projections for WCDMA and EV-DO reflecting the current
positive trends for both. As these markets have matured, our bullish stance
on 3G adoption has not changed and been supported in quarterly results
ahead of Qualcomms expectations. At this point, 3G WCDMA has reached
critical mass in mature markets and the focus has moved on to
emerging markets. 3G EV-DO has already displaced CDMA as mainstream in
almost all CDMA markets.
Handset prices continue to

come down
Both 3G technologies have been helped by continued price declines for 3G

chipsets, which has enabled lower-priced handsets. This should only gain
momentum in 2H08 as the first wave of single chip 3G baseband/radio
solutions ships commercially, allowing handset prices to fall further. At this
point the low end of the market is sub-$200, but we should see a $100 handset
with the single chip transition.
3G going global, although at

a modest pace in emerging
markets
While the 3G buildout continues to expand, it is still not a priority in most

emerging markets (although the capability is often installed in greenfield 2G
expansions). Therefore, we are still projecting only modest 3G penetration
in Latin America, Eastern Europe, and the Middle East and Africa over
the next few years.
At this point, we are not building 4G, whether that be WiMAX, LTE, or
UMB, handsets into the forecast. Mobile WiMAX could emerge in 2008 and
UMB and LTE in 2009 or 2010, but in all cases we are likely to see small
shipment levels (100,000s initially). Most 4G devices will likely be multi-mode to
allow roaming between more widely deployed 3G EV-DO and WCDMA networks.
WCDMA
289.4 million WCDMA units
in 2008E; 724.9 million units
in 2011E
We project the WCDMA/HSPA market will reach 289.4 million units, or

22.5% of total shipments, in 2008, up from 183.5 million in 2007. Growth is
slowing as the market expands, but this transition still reflects the largest
opportunity for handset vendors and carriers. We look for shipments to
grow to 724.9 million units, or 43.5% of shipments, in 2011. This represents a
gain of 21.0% in market share (from 2008) and a 2007-2011 CAGR of 41.0%.
Our projections for 3G WCDMA anticipate a seamless transition to
HSDPA/HSUPA/HSPA+. LTE (4G) would be the next logical step although this
transition is not likely until 2010 at the earliest.
40
Exhibit 47.
Worldwide WCDMA/HSPA Handset Shipments by Region
2001
2002
2003
North America
0
0
0
Latin America
0
0
0
West Europe
0
139
486
East Europe
0
0
0
Asia Pacific
27
228
2,776
MEA
0
0
0
Total
27
367
3,263
Growth
NM
NM
789.8%
2004
334
0
11,085
0
10,204
0
21,623
562.7%
2005
874
0
27,331
0
22,795
139
51,139
136.5%
2006
3,141
0
60,054
0
37,349
927
101,472
98.4%
2007(E)
14,583
2,740
97,531
2,880
61,591
4,169
183,495
80.8%
2008(E)
33,038
5,277
141,939
5,655
93,967
9,510
289,386
57.7%
2009(E)
49,761
10,670
162,881
11,604
155,588
13,820
404,323
39.7%
2010(E)
64,514
20,418
181,861
21,530
260,281
24,138
572,741
41.7%
2011(E) CAGR 03-07 CAGR 07-11
70,806
NM
48.4%
30,713
NM
83.0%
198,835
276.3%
19.5%
38,196
NM
90.8%
345,016
117.0%
53.8%
41,379
NM
77.5%
724,944
173.8%
41.0%
26.6%
EV-DO
145.6 million units in 2008E;
239.6 million units in 2011E
We project the CDMA EV-DO market will reach 145.6 million units in
2008, up 35.9% from shipments of 107.2 million in 2007. We look for
shipments to grow to 239.6 million units in 2011, representing a 2007-2011
CAGR of 22.3%. In general the transition to EV-DO is further along than
WCDMA, but doesnt represent much of an upgrade opportunity.
Our projections for 3G EV-DO anticipate a seamless transition to Rev. A and
Rev. B (still to come). With EV-DO Rev. A upgrades largely completed in
developed markets such as the U.S. and Japan, we expect the focus of
carriers to shift to aggressively transitioning their subscribers to EV-DO from
CDMA. UMB would be the next logical step proposed by Qualcomm (triggering
the 4G transition for CDMA carriers), although some propose the 4G transition
could see CDMA carriers and GSM carriers move to a common LTE platform such
as Verizons announcement.
Exhibit 48.
Worldwide CDMA EV-DO Handset Shipments by Region
2001
2002
2003
North America
0
0
0
Latin America
0
0
0
West Europe
0
0
0
East Europe
0
0
0
Asia Pacific
0
134
4,584
MEA
0
0
0
Total
0
134
4,584
Growth
NM
NM
NM
41
2004
3,408
0
0
0
7,646
0
11,054
141.1%
2005
13,445
21
0
0
13,409
23
26,898
143.3%
2006
27,844
559
0
0
28,457
101
56,960
111.8%
2007(E)
50,658
894
0
0
55,388
248
107,188
88.2%
2008(E)
66,076
1,715
0
0
77,321
536
145,648
35.9%
2009(E)
86,772
4,268
0
0
99,576
1,075
191,691
31.6%
2010(E)
101,961
5,855
0
0
114,387
2,241
224,444
17.1%
2011(E) CAGR 03-07 CAGR 07-11
105,067
NM
20.0%
6,773
NM
65.9%
0
NM
NM
0
NM
NM
123,967
86.4%
22.3%
3,762
NM
97.3%
239,568
119.9%
22.3%
6.7%
Exhibit 49.
2002
2003
2004
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E) CAGR 03-07 CAGR 07-11
367
134
500
3,263
4,584
7,847
21,623
11,054
32,677
51,139
26,898
78,037
101,472
56,960
158,432
183,495
107,188
290,682
289,386
145,648
435,034
404,323
191,691
596,013
572,741
224,444
797,186
724,944
239,568
964,512
173.8%
119.9%
146.7%
41.0%
22.3%
35.0%
0
0
0
0
27
0
27
0
0
139
0
228
0
367
0
0
486
0
2,776
0
3,263
334
0
11,085
0
10,204
0
21,623
874
0
27,331
0
22,795
139
51,139
3,141
0
60,054
0
37,349
927
101,472
14,583
2,740
97,531
2,880
61,591
4,169
183,495
33,038
5,277
141,939
5,655
93,967
9,510
289,386
49,761
10,670
162,881
11,604
155,588
13,820
404,323
64,514
20,418
181,861
21,530
260,281
24,138
572,741
70,806
30,713
198,835
38,196
345,016
41,379
724,944
NM
NM
276.3%
NM
117.0%
NM
173.8%
48.4%
83.0%
19.5%
90.8%
53.8%
77.5%
41.0%
0
0
0
0
0
0
0
0
0
0
0
134
0
134
0
0
0
0
4,584
0
4,584
3,408
0
0
0
7,646
0
11,054
13,445
21
0
0
13,409
23
26,898
27,844
559
0
0
28,457
101
56,960
50,658
894
0
0
55,388
248
107,188
66,076
1,715
0
0
77,321
536
145,648
86,772
4,268
0
0
99,576
1,075
191,691
101,961
5,855
0
0
114,387
2,241
224,444
105,067
6,773
0
0
123,967
3,762
239,568
NM
NM
NM
NM
86.4%
NM
119.9%
20.0%
65.9%
NM
NM
22.3%
97.3%
22.3%
0
0
0
0
0
0
0
0
0
139
0
361
0
500
0
0
486
0
7,361
0
7,847
3,742
0
11,085
0
17,850
0
32,677
14,319
21
27,331
0
36,204
162
78,037
30,986
559
60,054
0
65,806
1,028
158,432
65,241
3,634
97,531
2,880
116,979
4,417
290,682
99,114
6,993
141,939
5,655
171,288
10,046
435,034
136,533
14,937
162,881
11,604
255,164
14,895
596,013
166,475
26,274
181,861
21,530
374,668
26,379
797,186
175,873
37,486
198,835
38,196
468,983
45,140
964,512
NM
NM
276.3%
NM
99.7%
NM
146.7%
28.1%
79.2%
19.5%
90.8%
41.5%
78.8%
35.0%
Worldwide 3G Handset Shipment Snapshot

2001
3G Phones
WCDMA/HSPA
27
EV-DO
0
Total
27
WCDMA/HSPA Phones
North America
Latin America
West Europe
East Europe
Asia Pacific
MEA
Total
EV-DO Phones
North America
Latin America
West Europe
East Europe
Asia Pacific
MEA
Total
3G Total
North America
Latin America
West Europe
East Europe
Asia Pacific
MEA
Total
Exhibit 50.
Worldwide 3G Handset Shipment Snapshot
2001
2002
Shipment Growth
WCDMA/HSPA
NA
1258.1%
EV-DO
NA
NA
Overall
1752.9%
NA
% of 3G Market
WCDMA/HSPA
EV-DO
Total
% of 3G Market
North America
Latin America
West Europe
East Europe
Asia Pacific
MEA
Total
2003
2004
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E)
789.8%
3331.0%
1468.4%
562.7%
141.1%
316.4%
136.5%
143.3%
138.8%
98.4%
111.8%
103.0%
80.8%
88.2%
83.5%
57.7%
35.9%
49.7%
39.7%
31.6%
37.0%
41.7%
17.1%
33.8%
26.6%
6.7%
21.0%
NA
NA
NA
73.3%
26.7%
100.0%
41.6%
58.4%
100.0%
66.2%
33.8%
100.0%
65.5%
34.5%
100.0%
64.0%
36.0%
100.0%
63.1%
36.9%
100.0%
66.5%
33.5%
100.0%
67.8%
32.2%
100.0%
71.8%
28.2%
100.0%
75.2%
24.8%
100.0%
NA
NA
NA
NA
NA
NA
NA
0.0%
0.0%
27.8%
0.0%
72.2%
0.0%
100.0%
0.0%
0.0%
6.2%
0.0%
93.8%
0.0%
100.0%
11.5%
0.0%
33.9%
0.0%
54.6%
0.0%
100.0%
18.3%
0.0%
35.0%
0.0%
46.4%
0.2%
100.0%
19.6%
0.4%
37.9%
0.0%
41.5%
0.6%
100.0%
22.4%
1.3%
33.6%
1.0%
40.2%
1.5%
100.0%
22.8%
1.6%
32.6%
1.3%
39.4%
2.3%
100.0%
22.9%
2.5%
27.3%
1.9%
42.8%
2.5%
100.0%
20.9%
3.3%
22.8%
2.7%
47.0%
3.3%
100.0%
18.2%
3.9%
20.6%
4.0%
48.6%
4.7%
100.0%
Smart Phone Shipments

42
Due to the growing importance of the smart phone segment, we have included
our first smart phone forecast in this report. We expect 154.0 million smart
phones to ship in 2008 and maintain high growth through our forecast period.
We expect a CAGR of 37.7% from 2007 to 2011. In 2011, we project 403.9

million smart phone devices to ship.
We define a smart phone as a converged voice and data device with an
advanced operating system that is used for voice purposes and data operation
such as the Palm Treo and Nokia N-Series. Although somewhat different in
presentation, we also include cellular PDAs. A cellular PDA is typically used for
data purposes and two-handed operation such as the BlackBerry 8800 and
Curve, Motorola Q and Samsung Blackjack, but can be used as a primary voice
device as well.
Smart phone not only for

enterprise any more
Several trends are driving demand for data-oriented devices, including the
adoption of 3G and mobile broadband, robust growth in and diversity of
data services and demand for more multimedia functionality. We also note
that in general, smart phones and cellular PDAs have become more user friendly
with thinner designs, larger and attractive color screens (some touch screens),
more memory, and generally improved multimedia capability (camera, music
and video) and operating systems (RIM, Symbian, Windows Mobile, etc.).
Carriers also making a big

push
Historically smart phones targeted the enterprise and high-end early adopters,
who either required the services or were able to carry the cost (not just device
but services as well). As service charges dropped (email under $10 per month)
and functionality improved, the appeal of these devices has reached a
broader audience now targeting the mainstream consumer. Looking to boost
revenue and margins, carriers have heavily subsidized and promoted data
devices driving adoption even further (primarily as voice handset upgrades)
and pushing up ARPU (from email, messaging, multimedia, Internet).
RIM is entrenched in
enterprise
From a vendor perspective, RIM is entrenched as the leading smart phone

vendor for enterprise and it has a growing consumer presence. The
companys Pearl continues to surpass expectations and has driven ramping
consumer interest for mobile email and the Curve has been a crossover hit with
both consumers and enterprise. While there is significant room for the company
to grow in North America, the Blackberry foundation is gaining momentum in
international markets as well.
Other top-tier vendors with exposure include Nokia (E-series), Motorola (Q)
and Samsung (BlackJack), but are viewed mostly as consumer plays and yet to
deliver a strategy that can displace RIM in the enterprise or the high-end
prosumer. All three are making strong efforts to become more relevant in this
segment and we believe at some point a breakthrough would be made.
Apple iPhone changing the

consumer game?
43
Other players include Apple (iPhone) and HTC, which has a deep portfolio of
devices sold under various brand names including its own. The iPhone in
particular has raised awareness for smart phones and their practicality for
users seeking a complete and robust multimedia experience. Apple looks for 10
million iPhones to ship cumulatively by the end of 2008. HTC has made strides
in Europe and the U.S. and has strong carrier agreements with AT&T (Tilt),
Orange and O2. HTCs Touch has sold over one million units since its launch in
June in Europe and the company estimated it shipped 11 million units in 2007
with growth to expected to surpass 20% in 2008.
Exhibit 51.
Worldwide Smart Phone/PDA Handset Shipments
2004
2005
Smart phones
16,135
46,917
Wireless Cellular PDAs
3,402
7,021
Total
19,537
53,938
Growth
176.1%
Source: CIBC World Markets, Gartner
2006
74,531
9,534
84,064
55.9%
2007(E)
94,654
17,351
112,005
33.2%
2008(E)
122,104
31,926
154,030
37.5%
2009(E)
159,956
59,383
219,339
42.4%
2010(E)
196,746
105,108
301,854
37.6%
2011(E) CAGR 03-07 CAGR 07-11
226,257
NM
24.3%
177,633
NM
78.9%
403,890
NM
37.7%
33.8%
Exhibit 52.
Worldwide Smart Phone/PDA Handset Shipments Growth

2004
2005
2006
Smart phones
N/A
190.8%
58.9%
N/A
106.4%
35.8%
Total
176.1%
55.9%
2007(E)
27.0%
82.0%
33.2%
2008(E)
29.0%
84.0%
37.5%
2009(E)
31.0%
86.0%
42.4%
2010(E)
23.0%
77.0%
37.6%
2011(E)
15.0%
69.0%
33.8%
Exhibit 53.
Worldwide Smart Phone/PDA Handset Shipments (% of Total Market)

2004
2005
2006
2007(E)
Smart phones
2.4%
5.8%
7.6%
8.3%
0.5%
0.9%
1.0%
1.5%
Total
2.9%
6.7%
8.5%
9.9%
2008(E)
9.5%
2.5%
12.0%
2009(E)
11.2%
4.1%
15.3%
2010(E)
12.7%
6.8%
19.5%
2011(E)
13.6%
10.7%
24.2%
Data Card Shipments

Data/USB cards go
mainstream with 3G
Were also including our first data/USB card and embedded laptop module
forecast in this report. Data cards have been solid drivers for 3G and
mobile broadband adoption in the past few years, particularly in Europe
and the U.S., as carriers launched their 3G network deployments with an
aggressive data card push. Momentum is rising as plan prices decline and
coverage becomes more consistent.

We believe data card shipments for mobile computing applications exceeded 5

million in 2006 and 8 million in 2007 and we project shipments of 9.8 million
in 2008. From 2007 to 2011 we model a CAGR of 36.8%, with the market
reaching 31.4 million devices in 2011.
Our forecast could prove to be conservative, with market research firm ABI
Research projecting shipments will exceed 65 million in 2012, with machine-tomachine shipments adding another 90 million that year. Machine-to-machine
applications are not explicitly built into our forecast.
Several catalysts driving

growth
44
Data card demand catalysts include network transitions from WCDMA to HSDPA
and HSUPA as well as from EV-DO Rev. A to EV-DO Rev. B. driving upgrades in
the enterprise. We also see room for further service price reductions to drive
demand, especially in the untapped consumer market. A wild card that could
drive embedded demand is Qualcomms new Gobi platform, which merges an
HSPA and EV-DO solution into one design and should start to ramp in 2Q08.
Novatel and Sierra lead a

competitive field
Briefly touching on vendor trends, we believe both Novatel Wireless and

Sierra Wireless are well positioned to benefit from the proliferation of
3G and mobile broadband adoption. Both companies have deep product
portfolios and strong exposure to the most advanced data markets, North
America and Western Europe. With that said, this is a very competitive market,
including top vendors like Sony Ericsson and Ericsson (in embedded), Option,
Pantech, Huawei, and ZTE.
Exhibit 54.
Worldwide Data/USB Card and Embedded Modem Shipments
2004
2005
2006
2007(E)
PC Card/USB Modem
1,472
3,391
6,675
8,878
Embedded Laptop
12
72
228
923
Total
1,484
3,463
6,903
9,801
Growth
133.4%
99.3%
42.0%
Source: CIBC World Markets, Gartner
2008(E)
11,363
2,031
13,395
36.7%
2009(E)
14,204
3,779
17,983
34.3%
2010(E)
17,471
6,688
24,159
34.3%
2011(E) CAGR 03-07 CAGR 07-11
20,092
NM
22.7%
11,303
NM
87.0%
NM
31,395
36.8%
29.9%
Exhibit 55.
Worldwide Data/USB Card and Embedded Modem Shipment Growth

2004
2005
2006
2007(E)
PC Card/USB Modem
N/A
130.4%
96.8%
33.0%
Embedded Laptop
N/A
500.0%
216.7%
305.0%
Total
133.4%
99.3%
42.0%
2008(E)
28.0%
120.0%
36.7%
2009(E)
25.0%
86.0%
34.3%
2010(E)
23.0%
77.0%
34.3%
2011(E)
15.0%
69.0%
29.9%
2009(E)
79.0%
21.0%
100.0%
2010(E)
72.3%
27.7%
100.0%
2011(E)
64.0%
36.0%
100.0%
Exhibit 56.
Worldwide Data/USB Card and Embedded Modem Shipments (% of Total Market)

2004
2005
2006
2007(E)
2008(E)
PC Card/USB Modem
99.2%
97.9%
96.7%
90.6%
84.8%
Embedded Laptop
0.8%
2.1%
3.3%
9.4%
15.2%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
Mobile Subscribers
In this section, we present our worldwide subscriber forecast by the same six
regions. We have seen a prolonged period of very strong new subscriber
growth driven primarily by gains in Asia Pacific and MEA, but there has been
growth even in the most mature and fully penetrated markets.
45
Subs ramping from 3.6

billion in 2008E to 4.7 billion
in 2011E
We now project 2008 worldwide subscribers of 3.6 billion, up 15% from 3.1
billion in 2007. The largest contributors to growth remain India and China. By
2011 we see carriers making sold progress on the next two billion with total
subs of 4.7 billion. Included in this number is the assumption that many users in
mature markets will have multiple active accounts for voice and data.
Net additions should decline

starting in 2008
We now expect 2008 will be the first year since 2002 to show a decline in
net adds. This is one year later than what we projected last year. Despite the
absolute decline in net adds in 2008 and thereafter, we highlight that overall
new subscriber growth is still relatively strong in every year ranging from 20.3%
in 2007 to a low of 7.9% in 2011, and a 2007-2011 CAGR of 10.9%. The 20072011 CAGR of 10.9% compares to a CAGR of 22.7% in 2007-2011, a period that
saw penetration rates soar in all emerging regions (Latin America, Eastern
Europe, MEA and Asia Pacific).
Exhibit 57.
Worldwide Mobile Subscriber Net Adds

600,000
500,000
40%
'03-'07 CAGR
of 22.0%
30%
Thousands of Users
400,000
20%
300,000
10%
'07-'11 CAGR
of -10.0%
200,000
0%
100,000
-10%
-20%
2001
2002
2003
2004
2005
2006
2007(E)
2008(E) 2009(E) 2010(E)
2011(E)
Source: CIBC World Markets Corp. and Global Mobile
Subscriber Regional Trends

Exhibits 58-60 present our worldwide subscriber forecast by region, with total
subscribers, net subscriber additions, and percent contribution broken out. Later
in the section we provide our estimate for population and mobile penetration by
country.
Exhibit 58.
Worldwide Subscribers by Region
2001
2002
North America
138,281
151,147
Latin America
84,555
100,337
West Europe
282,772
301,437
East Europe
49,412
75,006
Asia Pacific
329,506
433,226
MEA
59,774
80,077
Total
944,299 1,141,229
Growth
30.1%
20.9%
Source: CIBC World Markets, Global Mobile
46
2003
170,322
124,671
327,901
108,279
541,044
108,161
1,380,377
21.0%
2004
193,371
173,013
357,928
160,609
666,624
150,873
1,702,418
23.3%
2005
223,958
241,743
392,001
203,744
814,777
225,772
2,101,996
23.5%
2006
250,738
308,840
427,407
249,346
1,039,824
326,547
2,602,702
23.8%
2007(E)
271,303
374,273
452,680
284,179
1,333,633
415,851
3,131,919
20.3%
2008(E)
284,527
425,805
472,133
311,651
1,608,267
499,075
3,601,457
15.0%
2009(E)
294,088
460,262
486,734
334,413
1,859,808
577,174
4,012,479
11.4%
2010(E)
300,911
484,676
497,451
354,456
2,094,682
650,416
4,382,592
9.2%
(Thousands)
2011(E) CAGR 03-07 CAGR 07-11
307,233
12.3%
3.2%
507,282
31.6%
7.9%
507,240
8.4%
2.9%
373,692
27.3%
7.1%
2,315,172
25.3%
14.8%
718,615
40.0%
14.7%
4,729,234
22.7%
10.9%
7.9%
Exhibit 59.
Worldwide Net Subscriber Adds by Region
2001
2002
North America
21,344
12,867
Latin America
21,248
15,782
West Europe
38,844
18,665
East Europe
21,643
25,594
Asia Pacific
96,964
103,719
MEA
18,329
20,303
Total
218,371
196,930
Growth
-11.5%
-9.8%
2003
19,175
24,334
26,464
33,273
107,819
28,084
239,149
21.4%
2004
23,048
48,342
30,028
52,330
125,580
42,712
322,041
34.7%
2005
30,588
68,730
34,073
43,136
148,152
74,899
399,578
24.1%
2006
26,779
67,097
35,405
45,602
225,047
100,775
500,706
25.3%
2007(E)
20,565
65,433
25,274
34,833
293,809
89,304
529,217
5.7%
2008(E)
13,224
51,532
19,453
27,472
274,634
83,224
469,539
-11.3%
2009(E)
9,561
34,458
14,600
22,762
251,541
78,099
411,021
-12.5%
2010(E)
6,824
24,413
10,717
20,043
234,874
73,242
370,113
-10.0%
(Thousands)
2011(E) CAGR 03-07 CAGR 07-11
6,322
1.8%
-25.5%
22,607
28.1%
-23.3%
9,789
-1.1%
-21.1%
19,236
1.2%
-13.8%
220,490
28.5%
-6.9%
68,199
33.5%
-6.5%
346,642
22.0%
-10.0%
-6.3%
Exhibit 60.
Worldwide Subscribers by Region (% of Total Subscribers)
2001
2002
2003
North America
14.6%
13.2%
12.3%
Latin America
9.0%
8.8%
9.0%
West Europe
29.9%
26.4%
23.8%
East Europe
5.2%
6.6%
7.8%
Asia Pacific
34.9%
38.0%
39.2%
MEA
6.3%
7.0%
7.8%
Total
100.0%
100.0%
100.0%
China No. 1 in total subs;

India No. 1 in net adds
2004
11.4%
10.2%
21.0%
9.4%
39.2%
8.9%
100.0%
2005
10.7%
11.5%
18.6%
9.7%
38.8%
10.7%
100.0%
2006
9.6%
11.9%
16.4%
9.6%
40.0%
12.5%
100.0%
2007(E)
8.7%
12.0%
14.5%
9.1%
42.6%
13.3%
100.0%
2008(E)
7.9%
11.8%
13.1%
8.7%
44.7%
13.9%
100.0%
2009(E)
7.3%
11.5%
12.1%
8.3%
46.4%
14.4%
100.0%
2010(E)
6.9%
11.1%
11.4%
8.1%
47.8%
14.8%
100.0%
2011(E)
6.5%
10.7%
10.7%
7.9%
49.0%
15.2%
100.0%
Exhibits 61-62 present a snapshot of the top 10 countries from a mobile

subscriber and net addition perspective for 2008 and 2011. A quick look at these
tables highlights the ongoing importance of China in the overall market.
Even with the very strong growth we expect in India, India doesnt come
close to matching China in total subscribers at any point in our forecast.
However, India is closing the gap as mobile subscribers roughly double from
322.9 million in 2007 to 604.4 million in 2011. Over this same period, we expect
China to grow from 601.2 million subscribers to 782.5 million.
The makeup of the top ten subscriber listing doesnt change from 2008 to 2011,
although the order shifts slightly. This segmentation is primarily dependent on
population size and given the relative prosperity of most large population
countries, it is unlikely this list will change dramatically. The makeup of the top
ten net addition listing is also relatively stable.
47
Exhibit 61.
Top Ten Countries - Mobile Subscibers 2008(E)

Rank
Country
2008(E) Subs
1
China
601,173
2
India
322,856
3
US
263,505
4
Russia
126,389
5
Brazil
124,033
6
Indonesia
105,713
7
Japan
104,347
8
Pakistan
101,986
9
Germany
93,935
10
Italy
88,467
ROW
1,669,052
Total
3,601,457
(Thousands)
% of Total
16.7%
9.0%
7.3%
3.5%
3.4%
2.9%
2.9%
2.8%
2.6%
2.5%
46.3%
100.0%
Top Ten Countries - Mobile Subscibers 2011(E)

Rank
Country
2011(E) Subs
1
China
782,538
2
India
604,449
3
US
282,951
4
Pakistan
159,026
5
Indonesia
154,994
6
Russia
151,652
7
Brazil
139,222
8
Japan
112,742
9
Germany
101,971
10
Italy
99,511
ROW
2,140,178
Total
4,729,234
(Thousands)
% of Total
16.5%
12.8%
6.0%
3.4%
3.3%
3.2%
2.9%
2.4%
2.2%
2.1%
45.3%
100.0%
(Thousands)
% of Total
20.6%
15.9%
5.1%
4.2%
3.2%
3.2%
2.6%
2.4%
2.1%
2.0%
38.6%
100.0%
Top Ten Countries - Mobile Subs Net Adds 2011(E)

Rank
Country
2011(E) Net Adds
1
India
92,248
2
China
55,272
3
Pakistan
17,292
4
Indonesia
14,728
5
Bangladesh
12,508
6
Vietnam
11,661
7
Nigeria
9,195
8
Russia
8,042
9
Iran
6,637
10
US
5,276
ROW
113,785
Total
346,642
(Thousands)
% of Total
26.6%
15.9%
5.0%
4.2%
3.6%
3.4%
2.7%
2.3%
1.9%
1.5%
32.8%
100.0%
Exhibit 62.
Top Ten Countries - Mobile Subs Net Adds 2008(E)

Rank
Country
2008(E) Net Adds
1
India
96,918
2
China
74,779
3
Pakistan
24,075
4
Indonesia
19,666
5
Bangladesh
15,241
6
Vietnam
14,887
7
US
12,038
8
Nigeria
11,093
9
Russia
10,062
10
Argentina
9,468
ROW
181,311
Total
469,539
Developed vs. Emerging Markets
48
Emerging markets subs

growing at a 13.7% 07-11E
CAGR
Although it will come as no surprise and follows the same trends highlighted in
the handset section, we highlight the growing importance of emerging markets
to both total subscribers and to net additions. Based on our estimates,
emerging market subscribers will see a 2007-2011 CAGR of 13.7%,
which compares to 2.9% for mature markets.
and accounting for 78.1%

of subs in 2011E
We also highlight that emerging markets are expected to grow from

70.5% of the global mobile subscriber base in 2007 to 78.1% in 2011.
Over the same period, we expect the emerging market contribution to net
additions to grow from 89.5% to 94.3%, as growth opportunities in mature
markets becomes increasingly difficult to find.
Exhibit 63.
Worldwide Subscribers by Selected Countries
2001
2002
Latin America
Brazil
28,606
34,768
Mexico
21,757
25,302
34,192
40,266
2003
2004
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E) CAGR 03-07
46,125
29,034
49,512
64,845
37,354
70,814
86,950
46,626
108,167
101,033
56,765
151,042
115,379
67,679
191,214
124,033
76,552
225,219
131,103
82,340
246,820
135,298
86,879
262,498
139,222
91,206
276,855
25.8%
23.6%
40.2%
4.8%
7.7%
9.7%
East Europe
Russia
Ukraine
Rest of East Europe
China
India
Indonesia
Pakistan
Vietnam
MEA
Nigeria
Rest of MEA
Emerging Markets
Net Adds
Growth
(Thousands)
CAGR 07-11
8,124
2,331
38,957
17,800
3,705
53,501
36,450
6,549
65,280
62,294
13,801
84,514
87,233
18,040
98,471
103,310
28,411
117,625
116,327
34,989
132,863
126,389
40,443
144,819
135,465
44,245
154,703
143,610
47,585
163,260
151,652
50,773
171,266
33.7%
52.0%
19.4%
6.9%
9.8%
6.6%
144,767
5,479
6,499
1,097
1,252
32,716
206,616
10,480
11,441
1,946
1,727
49,564
257,549
28,274
18,596
3,410
2,749
66,767
317,223
48,746
24,878
7,909
4,634
90,769
375,814
77,637
41,725
21,647
7,801
110,792
445,754
137,370
60,208
48,543
17,339
141,162
526,394
225,938
86,048
77,911
30,949
187,159
601,173
322,856
105,713
101,986
45,836
224,492
666,605
418,736
123,760
122,607
60,623
255,704
727,266
512,202
140,266
141,734
72,835
284,274
782,538
604,449
154,994
159,026
84,496
309,782
19.6%
68.1%
46.7%
118.6%
83.2%
29.4%
10.4%
27.9%
15.8%
19.5%
28.5%
13.4%
421
59,353
1,506
78,571
3,160
105,001
9,386
141,487
18,376
207,396
28,976
297,572
39,711
376,139
50,804
448,270
61,306
515,868
71,276
579,141
80,470
638,145
88.3%
37.6%
19.3%
14.1%
385,551
140,615
57.4%
537,194
151,643
39.3%
718,455
181,261
33.7%
978,654
260,199
36.2%
1,306,675
328,021
33.5%
1,735,109
428,433
32.8%
2,208,701
473,593
27.3%
2,638,587
429,886
19.5%
3,019,884
381,296
14.5%
3,368,124
348,241
11.5%
3,694,874
326,750
9.7%
32.4%
27.1%
13.7%
-8.9%
% of total Subs
40.8%
47.1%
52.0%
57.5%
62.2%
66.7%
70.5%
73.3%
75.3%
76.9%
78.1%
North America
138,281
151,147
170,322
193,371
223,958
250,738
271,303
284,527
294,088
300,911
307,233
12.3%
3.2%
West Europe
France
Germany
Italy
Spain
UK
Rest of West Europe
35,922
54,138
49,682
28,888
44,942
69,200
36,850
56,686
52,050
33,097
49,876
72,878
39,792
62,130
55,512
37,021
53,203
80,244
42,493
68,441
61,324
38,033
59,303
88,334
47,138
74,056
68,039
42,238
65,758
94,772
51,442
81,242
77,605
46,339
69,557
101,221
53,037
88,786
83,751
48,285
72,061
106,760
54,628
93,935
88,467
49,879
74,439
110,786
55,994
97,581
92,448
50,926
76,003
113,783
56,890
99,874
96,053
51,690
77,219
115,726
57,686
101,971
99,511
52,388
78,222
117,461
7.4%
9.3%
10.8%
6.9%
7.9%
7.4%
2.1%
3.5%
4.4%
2.1%
2.1%
2.4%

Japan
South Korea
67,101
29,047
41,548
73,514
32,343
45,594
79,847
33,420
50,433
85,484
36,588
50,394
90,259
38,332
50,770
94,936
40,197
54,315
100,244
42,951
56,039
104,347
44,573
57,290
107,766
45,759
58,249
110,401
46,928
58,776
112,742
48,054
59,091
5.9%
6.5%
2.7%
3.0%
2.8%
1.3%
Mature Markets
Net Adds
Growth
558,748
77,756
16.2%
604,035
45,287
8.1%
661,922
57,888
9.6%
723,764
61,842
9.3%
795,320
71,556
9.9%
867,593
72,273
9.1%
923,218
55,625
6.4%
962,870
39,653
4.3%
992,595
29,725
3.1%
1,014,468
21,873
2.2%
1,034,360
19,892
2.0%
8.7%
-1.0%
2.9%
-22.7%
% of total Subs
59.2%
52.9%
48.0%
42.5%
37.8%
33.3%
29.5%
26.7%
24.7%
23.1%
21.9%
Total
944,299 1,141,229 1,380,377
Net Adds
218,371
196,930
239,149
Growth
30.1%
20.9%
21.0%
1,702,418
322,041
23.3%
2,101,996
399,578
23.5%
2,602,702
500,706
23.8%
3,131,919
529,217
20.3%
3,601,457
469,539
15.0%
4,012,479
411,021
11.4%
4,382,592
370,113
9.2%
4,729,234
346,642
7.9%
22.7%
22.0%
10.9%
-10.0%
49
Exhibit 64.
Worldwide Subscribers by Selected Countries (% of Total Subscribers)
2001
2002
2003
2004
Latin America
Brazil
3.0%
3.0%
3.3%
3.8%
Mexico
2.3%
2.2%
2.1%
2.2%
3.6%
3.5%
3.6%
4.2%
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E)
4.1%
2.2%
5.1%
3.9%
2.2%
5.8%
3.7%
2.2%
6.1%
3.4%
2.1%
6.3%
3.3%
2.1%
6.2%
3.1%
2.0%
6.0%
2.9%
1.9%
5.9%
East Europe
Russia
Ukraine
Rest of East Europe
0.9%
0.2%
4.1%
1.6%
0.3%
4.7%
2.6%
0.5%
4.7%
3.7%
0.8%
5.0%
4.2%
0.9%
4.7%
4.0%
1.1%
4.5%
3.7%
1.1%
4.2%
3.5%
1.1%
4.0%
3.4%
1.1%
3.9%
3.3%
1.1%
3.7%
3.2%
1.1%
3.6%
15.3%
0.6%
0.7%
0.1%
0.1%
3.5%
18.1%
0.9%
1.0%
0.2%
0.2%
4.3%
18.7%
2.0%
1.3%
0.2%
0.2%
4.8%
18.6%
2.9%
1.5%
0.5%
0.3%
5.3%
17.9%
3.7%
2.0%
1.0%
0.4%
5.3%
17.1%
5.3%
2.3%
1.9%
0.7%
5.4%
16.8%
7.2%
2.7%
2.5%
1.0%
6.0%
16.7%
9.0%
2.9%
2.8%
1.3%
6.2%
16.6%
10.4%
3.1%
3.1%
1.5%
6.4%
16.6%
11.7%
3.2%
3.2%
1.7%
6.5%
16.5%
12.8%
3.3%
3.4%
1.8%
6.6%
0.0%
6.3%
0.1%
6.9%
0.2%
7.6%
0.6%
8.3%
0.9%
9.9%
1.1%
11.4%
1.3%
12.0%
1.4%
12.4%
1.5%
12.9%
1.6%
13.2%
1.7%
13.5%
Emerging Markets
40.8%
47.1%
52.0%
57.5%
62.2%
66.7%
70.5%
73.3%
75.3%
76.9%
78.1%
North America

China
India
Indonesia
Pakistan
Vietnam
MEA
Nigeria
Rest of MEA
14.6%
13.2%
12.3%
11.4%
10.7%
9.6%
8.7%
7.9%
7.3%
6.9%
6.5%
West Europe
France
Germany
Italy
Spain
UK
Rest of West Europe
3.8%
5.7%
5.3%
3.1%
4.8%
7.3%
3.2%
5.0%
4.6%
2.9%
4.4%
6.4%
2.9%
4.5%
4.0%
2.7%
3.9%
5.8%
2.5%
4.0%
3.6%
2.2%
3.5%
5.2%
2.2%
3.5%
3.2%
2.0%
3.1%
4.5%
2.0%
3.1%
3.0%
1.8%
2.7%
3.9%
1.7%
2.8%
2.7%
1.5%
2.3%
3.4%
1.5%
2.6%
2.5%
1.4%
2.1%
3.1%
1.4%
2.4%
2.3%
1.3%
1.9%
2.8%
1.3%
2.3%
2.2%
1.2%
1.8%
2.6%
1.2%
2.2%
2.1%
1.1%
1.7%
2.5%

Japan
South Korea
7.1%
3.1%
4.4%
6.4%
2.8%
4.0%
5.8%
2.4%
3.7%
5.0%
2.1%
3.0%
4.3%
1.8%
2.4%
3.6%
1.5%
2.1%
3.2%
1.4%
1.8%
2.9%
1.2%
1.6%
2.7%
1.1%
1.5%
2.5%
1.1%
1.3%
2.4%
1.0%
1.2%
59.2%
52.9%
48.0%
42.5%
37.8%
33.3%
29.5%
26.7%
24.7%
23.1%
21.9%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Mature Markets
50
Exhibit 65.
(Thousands)
CAGR 07-11
Worldwide Subscriber Net Adds by Selected Countries

2001
2002
2003
Latin America
Brazil
5,967
6,162
11,356
Mexico
7,672
3,545
3,732
7,609
6,075
9,246
2004
2005
2006
2007(E)
2008(E)
2009(E)
2010(E)
18,721
8,320
21,302
22,105
9,272
37,353
14,082
10,139
42,875
14,347
10,914
40,172
8,653
8,873
34,005
7,070
5,787
21,600
4,195
4,539
15,679
3,924
4,327
14,357
6.0%
30.8%
44.4%
-27.7%
-20.7%
-22.7%
East Europe
Russia
Ukraine
Rest of East Europe
4,915
1,460
15,267
9,676
1,374
14,544
18,650
2,844
11,779
25,844
7,252
19,234
24,939
4,239
13,958
16,076
10,372
19,154
13,017
6,578
15,238
10,062
5,454
11,956
9,076
3,802
9,884
8,145
3,340
8,558
8,042
3,188
8,006
-8.6%
23.3%
6.6%
-15.6%
-24.7%
-18.2%

China
India
Indonesia
Pakistan
Vietnam
59,427
2,371
2,829
709
508
13,550
61,849
5,001
4,942
849
475
16,848
50,933
17,794
7,155
1,463
1,022
17,203
59,674
20,471
6,282
4,499
1,886
24,002
58,592
28,891
16,847
13,738
3,166
20,023
69,940
59,733
18,483
26,896
9,538
30,370
80,640
88,568
25,839
29,368
13,611
45,996
74,779
96,918
19,666
24,075
14,887
37,334
65,432
95,879
18,046
20,622
14,786
31,212
60,661
93,466
16,506
19,127
12,212
28,570
55,272
92,248
14,728
17,292
11,661
25,508
12.2%
49.4%
37.9%
111.7%
91.0%
27.9%
-9.0%
1.0%
-13.1%
-12.4%
-3.8%
-13.7%
MEA
Nigeria
Rest of MEA
384
17,945
1,085
19,218
1,654
26,430
6,226
36,486
8,990
65,908
10,599
90,176
10,736
78,568
11,093
72,131
10,502
67,598
9,970
63,273
9,195
59,004
59.6%
31.3%
-3.8%
-6.9%
140,615
151,643
7.8%
181,261
19.5%
260,199
43.5%
328,021
26.1%
428,433
30.6%
473,593
10.5%
429,886
-9.2%
381,296
-11.3%
348,241
-8.7%
326,750
-6.2%
27.1%
-8.9%
Emerging Markets
Growth
2011(E) CAGR 03-07
21,344
12,867
19,175
23,048
30,588
26,779
20,565
13,224
9,561
6,824
6,322
1.8%
-25.5%
West Europe
France
Germany
Italy
Spain
UK
Rest of West Europe
6,870
5,803
7,461
4,599
4,880
9,230
927
2,549
2,368
4,209
4,934
3,678
2,942
5,444
3,462
3,924
3,327
7,366
2,701
6,311
5,813
1,013
6,100
8,090
4,646
5,615
6,715
4,204
6,455
6,439
4,304
7,187
9,566
4,101
3,799
6,448
1,595
7,543
6,146
1,946
2,504
5,539
1,591
5,150
4,715
1,593
2,378
4,026
1,366
3,646
3,981
1,047
1,563
2,997
896
2,293
3,605
764
1,216
1,943
796
2,097
3,458
698
1,004
1,735
-14.2%
8.5%
15.4%
-16.1%
-6.9%
-6.9%
-15.9%
-27.4%
-13.4%
-22.6%
-20.4%
-25.2%

Japan
South Korea
9,095
2,315
6,159
6,413
3,296
4,046
6,333
1,077
4,838
5,637
3,168
-39
4,775
1,744
376
4,677
1,865
3,546
5,308
2,754
1,724
4,103
1,622
1,251
3,419
1,186
959
2,636
1,169
527
2,341
1,126
315
-4.3%
26.5%
-22.7%
-18.5%
-20.0%
-34.6%
77,756
45,287
-41.8%
57,888
27.8%
61,842
6.8%
71,556
15.7%
72,273
1.0%
55,625
-23.0%
39,653
-28.7%
29,725
-25.0%
21,873
-26.4%
19,892
-9.1%
-1.0%
-22.7%
Total
218,371
196,930
239,149
Growth
-9.8%
21.4%
322,041
34.7%
399,578
24.1%
500,706
25.3%
529,217
5.7%
469,539
-11.3%
411,021
-12.5%
370,113
-10.0%
346,642
-6.3%
22.0%
-10.0%
North America
Mature Markets
Growth
51
Exhibit 66.
Worldwide Subscribers by Selected Countries - Percent Contribution to Worldwide Net Adds
2001
2002
2003
2004
2005
Latin America
Brazil
2.7%
3.1%
4.7%
5.8%
5.5%
Mexico
3.5%
1.8%
1.6%
2.6%
2.3%
3.5%
3.1%
3.9%
6.6%
9.3%
2006
2007(E)
2008(E)
2009(E)
2010(E)
2011(E)
2.8%
2.0%
8.6%
2.7%
2.1%
7.6%
1.8%
1.9%
7.2%
1.7%
1.4%
5.3%
1.1%
1.2%
4.2%
1.1%
1.2%
4.1%
East Europe
Russia
Ukraine
Rest of East Europe
China
India
Indonesia
Pakistan
Vietnam
MEA
Nigeria
Rest of MEA
Emerging Markets
2.3%
0.7%
7.0%
4.9%
0.7%
7.4%
7.8%
1.2%
4.9%
8.0%
2.3%
6.0%
6.2%
1.1%
3.5%
3.2%
2.1%
3.8%
2.5%
1.2%
2.9%
2.1%
1.2%
2.5%
2.2%
0.9%
2.4%
2.2%
0.9%
2.3%
2.3%
0.9%
2.3%
27.2%
1.1%
1.3%
0.3%
0.2%
6.2%
31.4%
2.5%
2.5%
0.4%
0.2%
8.6%
21.3%
7.4%
3.0%
0.6%
0.4%
7.2%
18.5%
6.4%
2.0%
1.4%
0.6%
7.5%
14.7%
7.2%
4.2%
3.4%
0.8%
5.0%
14.0%
11.9%
3.7%
5.4%
1.9%
6.1%
15.2%
16.7%
4.9%
5.5%
2.6%
8.7%
15.9%
20.6%
4.2%
5.1%
3.2%
8.0%
15.9%
23.3%
4.4%
5.0%
3.6%
7.6%
16.4%
25.3%
4.5%
5.2%
3.3%
7.7%
15.9%
26.6%
4.2%
5.0%
3.4%
7.4%
0.2%
8.2%
0.6%
9.8%
0.7%
11.1%
1.9%
11.3%
2.2%
16.5%
2.1%
18.0%
2.0%
14.8%
2.4%
15.4%
2.6%
16.4%
2.7%
17.1%
2.7%
17.0%
64.4%
77.0%
75.8%
80.8%
82.1%
85.6%
89.5%
91.6%
92.8%
94.1%
94.3%
North America
9.8%
6.5%
8.0%
7.2%
7.7%
5.3%
3.9%
2.8%
2.3%
1.8%
1.8%
West Europe
France
Germany
Italy
Spain
UK
Rest of West Europe
3.1%
2.7%
3.4%
2.1%
2.2%
4.2%
0.5%
1.3%
1.2%
2.1%
2.5%
1.9%
1.2%
2.3%
1.4%
1.6%
1.4%
3.1%
0.8%
2.0%
1.8%
0.3%
1.9%
2.5%
1.2%
1.4%
1.7%
1.1%
1.6%
1.6%
0.9%
1.4%
1.9%
0.8%
0.8%
1.3%
0.3%
1.4%
1.2%
0.4%
0.5%
1.0%
0.3%
1.1%
1.0%
0.3%
0.5%
0.9%
0.3%
0.9%
1.0%
0.3%
0.4%
0.7%
0.2%
0.6%
1.0%
0.2%
0.3%
0.5%
0.2%
0.6%
1.0%
0.2%
0.3%
0.5%

Japan
South Korea
4.2%
1.1%
2.8%
3.3%
1.7%
2.1%
2.6%
0.5%
2.0%
1.8%
1.0%
0.0%
1.2%
0.4%
0.1%
0.9%
0.4%
0.7%
1.0%
0.5%
0.3%
0.9%
0.3%
0.3%
0.8%
0.3%
0.2%
0.7%
0.3%
0.1%
0.7%
0.3%
0.1%
35.6%
23.0%
24.2%
19.2%
17.9%
14.4%
10.5%
8.4%
7.2%
5.9%
5.7%
Total
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Mature Markets
Penetration Rates
52
Global penetration to reach

68.1% by 2011E
Over the next several years we expect a steady increase in the worldwide
penetration rate, from 47.4% in 2007 to 68.1% in 2011, with increases in
all regions. Over this period, we expect Western Europe to see its calculated
penetration (not explicitly adjusted for multiple SIM cards outside of Eastern
Europe) to increase to 123.1% in 2011, North America to 89.3%, Latin America
to 80.9%, Eastern Europe to 108.9%, Asia Pacific to 61.0%, and MEA to 50.4%.
Western Europe fully

penetrated
Based on the simple calculation of total subscribers divided by total population,

more than a few countries have penetration rates of over 100%. Western
Europe as a singular region is by far the most penetrated region in the
world, with a calculated penetration rate for 2007 of 112.5%. Carriers continue
to find ways to entice new subscriptions in Western Europe and given the past
success we expect more subs to be squeezed out over the next several years.
After Western Europe, Eastern Europe is the most penetrated region at 83.2%,
with North America close behind at 81.3%. Latin America is at the 65.4%
penetration level. Asia Pacific and MEA remain the lowest penetrated
regions and best opportunity for growth at 36.7% and 31.6%, respectively.
We note that the issue of duplicate SIM cards is more noticeable in Eastern
Europe than in any other region.
Emerging market
penetration should reach
62.0%, mature market
104.7%, but
From 2007 to 2011, we expect the penetration rate to increase from 39.2% to
62.0% in emerging markets, a delta of 22.8%. Over that same period we expect
the penetration rate in mature markets to increase from 95.6% to 104.7%, a
delta of 9.1%.
multiple accounts mask

true penetration
Several legitimate factors could be contributing to the unusually high

penetration in specific regions. For example, we believe both North America and
Western Europe enjoy a heavier penetration into teens, pre-teens and the
elderly compared to other markets.
Exhibit 67.
Penetration Rate By Region
2001
North America
43.5%
Latin America
16.0%
Western Europe
71.8%
Eastern Europe
14.4%
Asia Pacific
9.5%
MEA
5.2%
Worldwide
15.2%
2002
47.2%
18.8%
76.6%
22.0%
12.4%
6.8%
18.2%
2003
52.5%
22.8%
83.2%
31.8%
15.4%
9.0%
21.8%
2004
59.3%
31.6%
90.6%
47.2%
18.9%
12.2%
26.7%
2005
68.1%
43.5%
98.6%
59.8%
22.9%
17.9%
32.6%
2006
75.7%
54.8%
106.9%
73.0%
28.9%
25.3%
39.9%
2007(E)
81.3%
65.4%
112.5%
83.2%
36.7%
31.6%
47.4%
2008(E)
84.6%
73.3%
116.7%
91.1%
43.8%
37.2%
53.9%
2009(E)
86.8%
78.0%
119.6%
97.7%
50.1%
42.2%
59.3%
2010(E)
88.1%
80.9%
121.5%
103.4%
55.8%
46.6%
64.0%
2011(E)
89.3%
80.9%
123.1%
108.9%
61.0%
50.4%
68.1%
Penetration Rate Emerging Markets vs. Mature Markets

2001
2002
2003
2004
Emerging Markets
7.3%
10.1%
13.3%
18.1%
Mature Markets
59.5%
64.1%
69.9%
76.2%
2005
23.8%
83.2%
2006
31.2%
90.3%
2007(E)
39.2%
95.6%
2008(E)
46.2%
99.1%
2009(E)
52.2%
101.6%
2010(E)
57.4%
103.3%
2011(E)
62.0%
104.7%
Exhibit 68.
We believe the main reason for the high penetration rate is multiple SIM
accounts. Two common reasons for multiple accounts include business and
personal accounts, as well as accounts for voice and data devices.
Handsets with dual SIM card functionality may alleviate this situation. Regions
with a large percentage of prepaid accounts (Europe and Asia) are also
vulnerable as its difficult to determine when a subscriber is no longer active.
Some countries are

overstated by more than
30% Eastern Europe the
biggest offender
Although carriers vet their subscriber base regularly, we believe every region to
some extent has an overcounting problem. That said we believe the calculated
penetration rate in various countries could be as much as 20%-30% higher than
the actual per person penetration rate.
We note that in North America the practice of double SIM cards is very
uncommon. CDMA handsets in the U.S. do not use SIM cards and unlocked
GSM handsets are rare in the U.S. As a result, the calculated penetration rate
for North America is close to a true representation of the penetration rate. We
53
believe the main reasons for multiple accounts in the U.S. are business and
personal accounts and voice and data-centric accounts (growing in importance).
In this scenario, both accounts are likely active and generating service revenue.
Outside the U.S. it is common for GSM handset users to have multiple
SIM cards (mostly prepaid) to avoid unusually high roaming charges when they
travel. This is particularly true in areas where countries are closely grouped and
travel across borders is common, such as in parts of Western Europe, or within
countries where roaming charges are unusually high from region to region, such
as in Russia. In this scenario unused or seldom-used SIM cards become a
meaningful problem in counting mobile subscribers.
Multiple SIM card effect

taken into account in our
handset forecast
Although we are aware of this SIM card effect, we have decided not to try to
estimate the true real subscriber figures for every country. To avoid keeping a
second set of estimates and unneeded confusion, we are for the most part
sticking to what the reported figures would be by official institutions (which
include multiple SIM card users). We have taken this into consideration when
estimating replacement rates that drive our handset shipments estimates.
The one exception is in Eastern Europe, which is particularly vulnerable to
the multiple SIM card problems. Without cuts our subscriber forecast would
reach absurdly high penetration levels. Therefore, we have cut our estimates
accordingly, with the biggest change coming from Russia. In subsequent
forecasts we may have to do the same for most countries in Western Europe.
Multiple SIM card users are also common in portions of Latin America and Asia,
but penetration rate even with this adder is still relatively low.
North America
subscribers in 2008E
The mature North America market continues to show solid subscriber trends
helped by lower service prices, strong promotional activity by carriers, and an
accelerating 3G data market for PC cards/USB modems. We project this region
to reach 271.3 million mobile subscribers in 2007 and 284.5 million in
2008. We expect 56.5 million net adds from 2007 to 2011, representing a CAGR
of 3.2% and the market reaching 307.2 million subs in 2011.
With the U.S. and Canada (less than 10% of the size of the U.S.) being the only
contributors to North America subscriber totals this region is fairly homogenous
in terms of subscriber constitution and overall trends, although it is one of the
more diverse regions from a technology standpoint. The penetration rate in
Canada is behind the U.S. giving it slightly better long term growth prospects,
but in general the two countries are similar in market dynamics.
Subs moving to 3G
54
Outside of merger related restructuring still under way at Sprint Nextel and
AT&T, most of the network activity in North America has been focused
on the 3G transition. Verizon and Sprint Nextel have already moved to EV-DO
Rev. A and AT&T to HSUPA. Given the strong focus on 3G, we expect a steady
subscriber switch over to the newer EV-DO and WCDMA technologies and move
away from the older GSM and CDMA 2G technologies.
Exhibit 69.
North America Mobile Subscribers
Country
2001
2002
127,590
139,218
US
Canada
10,691
11,929
Total
138,281
151,147
Net Adds
21,344
12,867
Growth
18.3%
9.3%
2003
156,893
13,429
170,322
19,175
12.7%
2004
179,200
14,171
193,371
23,048
13.5%
2005
207,355
16,603
223,958
30,588
15.8%
2006
232,197
18,540
250,738
26,779
12.0%
2007(E)
251,467
19,836
271,303
20,565
8.2%
2008(E)
263,505
21,022
284,527
13,224
4.9%
2009(E)
271,924
22,163
294,088
9,561
3.4%
2010(E)
277,675
23,236
300,911
6,824
2.3%
(Thousands)
2011(E) CAGR 07-11
282,951
3.0%
24,282
5.2%
307,233
3.2%
6,322
-25.5%
2.1%
Exhibit 70.
North American Mobile Subscriber Penetration By Country

Country
2001
2002
2003
2004
2005
US
44.6%
48.3%
53.7%
61.0%
70.0%
Canada
33.8%
37.4%
41.7%
43.6%
50.9%
Total
43.5%
47.2%
52.5%
59.3%
68.1%
2006
77.8%
56.6%
75.7%
2007(E)
83.6%
60.3%
81.3%
2008(E)
86.9%
63.6%
84.6%
2009(E)
89.0%
66.8%
86.8%
2010(E)
90.1%
69.8%
88.1%
2011(E)
91.1%
72.6%
89.3%
Latin America
Latin American has shown very strong mobile subscriber trends over the last
several years, but we believe this region peaked from a net adds perspective in
2006 (2007 is close, but looks to be down) and will gradually decline going
forward. Carriers in general have focused more on profitability in this region and
eased on promotional activity. We now project this region to reach 374.3
million mobile subscribers in 2007 and 425.8 million in 2008. We expect
198.4 million net mobile subscriber adds from 2007 to 2011, representing a
CAGR of 7.9% and the market reaching 507.3 million subscribers in 2011.
65% penetration rate leaves

room for more
Latin America still has a middle of the road penetration rate for mobile voice
services. This region passed the 50% level in 2006 and is expected to reach
65.4% in 2007 a far distance from the over 100% seen in Western Europe.
Growth is moderating, but there is still enough room that new subscriber growth
can be a meaningful as handsets get cheaper and service prices come down.
3G services will also start to gain some momentum over the next several years
as carriers look for new growth avenues. WCDMA should be the primary
beneficiary in the region and could see some meaningful uptake in 2008 as 3G
becomes a competitive differentiator.
Argentina, Brazil and Mexico

the key markets
55
Latin America is highly dependent on Argentina (10.3M net adds in 2007),

Brazil (14.3M) and Mexico (10.7M) for the majority of new subscribers. These
three countries account for 54.3% of 2007 net additions in this region and
52.4% of 2008 net additions. By 2011, the importance of these three countries
moderates slightly to 48.1%, but the large population bases mean they will
continue to be the regions foundation.
Exhibit 71.
Latin America Mobile Subscribers
Country
2001
2002
Argentina
6,719
6,423
Bolivia
766
1,091
Brazil
28,606
34,768
Chile
4,979
6,028
Columbia
3,265
4,597
Costa Rica
289
427
Cuba
15
22
Dominican Republic
1,270
1,695
Ecuador
859
1,561
El Salvador
858
825
Guatemala
1,009
1,386
Honduras
238
326
Jamaica
635
1,175
Mexico
21,757
25,302
Nicaragua
158
237
Panama
546
676
Paraguay
1,113
1,210
Peru
1,665
2,164
Puerto Rico
1,471
1,567
Trinidad
180
350
Uruguay
403
484
Venezuela
6,476
6,427
1,279
1,598
Total
84,555
100,337
Net Adds
21,248
15,782
Growth
33.6%
18.7%
2003
7,325
1,425
46,125
7,425
6,019
779
36
2,094
2,358
1,045
1,875
354
1,473
29,034
449
880
1,317
2,772
1,859
500
490
7,003
2,034
124,671
24,334
24.3%
2004
12,923
1,834
64,845
9,460
10,401
915
54
2,710
3,544
1,570
2,730
635
2,187
37,354
738
1,236
1,255
3,908
1,721
645
592
9,049
2,707
173,013
48,342
38.8%
2005
21,434
2,534
86,950
11,270
21,847
1,100
119
3,134
6,246
2,333
4,117
1,261
2,568
46,626
1,120
1,690
1,778
5,583
2,064
697
1,155
12,677
3,439
241,743
68,730
39.7%
2006
30,024
2,751
101,033
13,063
29,763
1,409
159
4,476
8,442
3,571
6,184
2,290
2,226
56,765
1,808
1,921
3,156
8,772
2,133
757
2,115
18,782
7,241
308,840
67,097
27.8%
2007(E)
40,284
3,466
115,379
14,727
32,114
1,975
202
5,597
10,189
5,025
8,686
3,556
2,580
67,679
2,569
2,382
4,423
12,710
2,302
815
3,294
25,043
9,274
374,273
65,433
21.2%
2008(E)
49,752
3,952
124,033
15,849
33,944
2,418
253
6,432
11,683
6,122
10,878
4,857
2,747
76,552
3,357
2,677
5,574
15,898
2,455
861
4,276
30,011
11,224
425,805
51,532
13.8%
2009(E)
55,167
4,319
131,103
16,452
35,608
2,738
315
7,063
12,788
6,916
12,204
5,629
2,819
82,340
4,101
2,945
6,142
18,634
2,598
902
4,852
31,472
13,153
460,262
34,458
8.1%
2010(E)
58,130
4,661
135,298
16,809
36,640
2,898
390
7,662
13,566
7,696
13,385
6,030
2,880
86,879
4,463
3,190
6,527
20,955
2,736
944
5,291
32,612
15,033
484,676
24,413
5.3%
2008(E)
123.4%
42.8%
65.3%
97.2%
75.8%
59.6%
2.2%
66.7%
78.7%
87.4%
69.9%
65.1%
95.2%
67.4%
58.5%
84.1%
82.6%
52.5%
61.3%
76.4%
122.3%
112.4%
88.6%
73.3%
2009(E)
135.5%
46.0%
68.2%
99.9%
78.1%
66.9%
2.7%
71.8%
84.4%
96.7%
76.3%
73.4%
96.3%
71.0%
69.6%
90.9%
88.5%
60.6%
64.5%
79.6%
138.0%
115.5%
102.8%
78.0%
(Thousands)
2011(E) CAGR 07-11
60,746
10.8%
4,988
9.5%
139,222
4.8%
17,162
3.9%
37,630
4.0%
3,052
11.5%
464
23.1%
8,122
9.8%
14,190
8.6%
8,427
13.8%
14,536
13.7%
6,413
15.9%
2,938
3.3%
91,206
7.7%
4,775
16.8%
3,423
9.5%
6,892
11.7%
23,155
16.2%
2,870
5.7%
983
4.8%
5,715
14.8%
33,688
7.7%
16,687
15.8%
507,282
7.9%
22,607
-23.3%
4.7%
Exhibit 72.
Latin America Mobile Subscriber Penetration By Country
Country
2001
2002
2003
Argentina
17.9%
17.0%
18.9%
Bolivia
9.2%
12.9%
16.6%
Brazil
16.4%
19.8%
25.3%
Chile
32.5%
38.9%
47.4%
Columbia
8.1%
11.2%
14.4%
Costa Rica
7.7%
11.1%
20.0%
Cuba
0.1%
0.2%
0.3%
Dominican Republic
14.8%
19.4%
24.0%
Ecuador
6.5%
11.6%
17.2%
El Salvador
13.8%
13.0%
16.1%
Guatemala
7.8%
10.4%
13.5%
Honduras
3.7%
5.0%
5.3%
Jamaica
23.8%
43.8%
54.7%
Mexico
21.4%
24.5%
27.7%
Nicaragua
3.2%
4.7%
8.8%
Panama
19.2%
23.5%
29.7%
Paraguay
19.4%
20.6%
21.8%
Peru
6.1%
7.7%
9.8%
Puerto Rico
37.4%
39.6%
47.8%
Trinidad
15.4%
30.1%
45.3%
Uruguay
12.0%
14.3%
14.4%
Venezuela
27.1%
26.5%
28.4%
11.6%
14.3%
17.5%
Total
16.0%
18.8%
22.8%
56
2004
33.4%
21.4%
35.6%
60.4%
25.0%
23.5%
0.5%
30.4%
25.9%
32.3%
22.3%
9.5%
80.1%
35.6%
14.4%
41.7%
20.8%
13.8%
44.0%
58.6%
17.4%
36.7%
22.2%
31.8%
2005
54.8%
29.0%
47.3%
71.2%
51.5%
28.0%
1.0%
34.5%
44.7%
35.3%
28.8%
18.4%
92.8%
43.6%
21.2%
56.0%
28.6%
19.3%
52.5%
63.0%
33.6%
50.4%
28.0%
43.5%
2006
76.0%
30.9%
54.3%
81.7%
68.9%
35.5%
1.4%
48.3%
59.2%
53.0%
42.0%
32.5%
79.3%
52.0%
33.3%
62.6%
49.4%
29.9%
53.9%
68.0%
61.2%
73.2%
58.3%
54.8%
2007(E)
100.9%
38.3%
61.4%
91.2%
73.0%
49.2%
1.8%
59.2%
70.0%
73.2%
57.4%
49.0%
90.6%
60.8%
46.1%
76.2%
67.4%
42.6%
57.8%
72.8%
94.8%
95.7%
74.0%
65.4%
2010(E)
141.3%
48.7%
69.7%
101.1%
79.0%
70.1%
3.4%
76.4%
87.8%
105.5%
81.4%
76.5%
97.0%
73.5%
73.6%
96.7%
91.4%
67.0%
67.5%
82.8%
149.5%
117.4%
116.3%
80.9%
2011(E)
143.3%
49.4%
69.4%
100.1%
76.8%
71.6%
4.0%
76.3%
86.5%
108.8%
81.3%
74.8%
94.9%
72.6%
72.4%
98.4%
88.8%
70.6%
69.5%
84.7%
158.6%
114.2%
125.3%
80.9%
Western Europe
Western Europe has the highest penetration of any region with few new
subscriber areas to tap. We project this region to reach 452.7 million mobile
subscribers in 2007 and 472.1 million in 2008. We expect 79.8 million net
mobile subscriber adds from 2007 to 2011, representing a CAGR of 2.9% and
the market reaching 507.2 million subscribers in 2011.

With few new subscriber growth opportunities yet to tap, we project the
slowest new subscriber growth for Western Europe of all the regions
presented in this forecast. At this point we believe the best opportunity is tied to
multiple accounts, with data the primary driver. The growth that does
materialize will mainly come from France, Germany, Italy, Spain and the U.K.,
given the wide disparity in population size between this group and the rest of
Western Europe.
While there shouldnt be much new subscriber activity in this region, we expect
an active switch-over of the subscriber base from a technology perspective.
Over the next several years we expect fewer and fewer 2G GSM subscribers and
an increasing number of 3G WCDMA subscribers.
Exhibit 73.
West Europe Mobile Subscribers
Country
2001
2002
Andorra
37
46
Austria
6,572
6,680
Belgium
7,200
7,297
Cyprus
398
490
Denmark
3,837
3,809
Faroe Islands
26
31
Finland
4,255
4,502
France
35,922
36,850
Germany
54,138
56,686
Greece
7,300
8,574
Iceland
251
262
Ireland
2,902
3,063
Italy
49,682
52,050
Jersey
61
72
Luxembourg
408
474
Malta
230
265
Netherlands
11,777
11,593
Norway
3,378
3,502
Portugal
7,998
8,529
Spain
28,888
33,097
Sweden
7,228
7,849
Switzerland
5,242
5,710
UK
44,942
49,876
Other
102
129
Total
282,772
301,437
Net Adds
38,844
18,665
Growth
15.9%
6.6%
57
2003
2004
2005
2006
52
7,264
7,831
642
4,687
38
4,562
39,792
62,130
9,711
270
3,403
55,512
79
537
286
13,183
3,559
9,335
37,021
8,519
6,141
53,203
143
327,901
26,464
8.8%
56
7,898
8,536
766
5,177
48
4,928
42,493
68,441
10,545
294
3,631
61,324
82
585
307
14,966
4,083
9,917
38,033
9,805
6,558
59,303
154
357,928
30,028
9.2%
59
8,423
8,864
980
5,427
43
5,385
47,138
74,056
11,439
301
4,165
68,039
100
623
333
16,438
4,517
10,800
42,238
10,022
6,682
65,758
173
392,001
34,073
9.5%
71
9,243
9,562
1,109
5,732
50
5,594
51,442
81,242
12,921
325
4,606
77,605
101
636
346
15,929
4,944
11,918
46,339
10,461
7,406
69,557
266
427,407
35,405
9.0%
2007(E)
73
9,631
10,193
1,200
6,018
50
5,841
53,037
88,786
14,338
329
4,795
83,751
106
648
375
17,141
5,090
12,323
48,285
10,536
7,784
72,061
289
452,680
25,274
5.9%
2008(E)
75
9,922
10,698
1,281
6,215
51
6,028
54,628
93,935
15,442
333
4,959
88,467
109
656
387
17,832
5,215
12,619
49,879
10,586
8,071
74,439
308
472,133
19,453
4.3%
2009(E)
76
10,125
11,065
1,331
6,364
51
6,152
55,994
97,581
16,360
335
5,097
92,448
110
660
398
18,345
5,308
12,808
50,926
10,619
8,253
76,003
326
486,734
14,600
3.1%
2010(E)
78
10,323
11,375
1,361
6,487
51
6,273
56,890
99,874
16,962
336
5,131
96,053
111
660
407
18,488
5,380
12,926
51,690
10,633
8,401
77,219
342
497,451
10,717
2.2%
(Thousands)
2011(E) CAGR 07-11
79
2.0%
10,509
2.2%
11,671
3.4%
1,389
3.7%
6,591
2.3%
51
0.3%
6,379
2.2%
57,686
2.1%
101,971
3.5%
17,522
5.1%
336
0.5%
5,154
1.8%
99,511
4.4%
112
1.3%
660
0.5%
415
2.6%
18,614
2.1%
5,440
1.7%
13,018
1.4%
52,388
2.1%
10,644
0.3%
8,523
2.3%
78,222
2.1%
355
5.3%
507,240
2.9%
9,789
-21.1%
2.0%
Exhibit 74.
Western Europe Mobile Subscriber Penetration by Country
2001
2002
2003
2004
Andorra
54.3%
67.4%
74.9%
79.6%
Austria
80.6%
81.8%
88.7%
96.6%
Belgium
70.2%
71.0%
76.1%
82.5%
Cyprus
52.2%
63.9%
83.2%
98.8%
Denmark
71.7%
70.9%
87.1%
95.6%
Faroe Islands
56.4%
66.7%
82.4%
102.5%
Finland
82.2%
86.9%
87.9%
94.5%
France
60.3%
61.7%
66.0%
70.3%
Germany
65.2%
68.1%
75.4%
83.0%
Greece
68.7%
80.5%
91.0%
99.0%
Iceland
90.3%
93.8%
96.1%
104.5%
Ireland
75.6%
78.9%
86.7%
91.5%
Italy
86.1%
90.2%
95.7%
105.6%
Jersey
70.2%
82.3%
87.8%
90.4%
Luxembourg
92.0%
105.7%
118.3%
126.5%
Malta
58.2%
66.7%
71.4%
77.3%
Netherlands
73.1%
72.1%
81.6%
91.7%
Norway
75.0%
77.4%
78.3%
89.3%
Portugal
79.4%
84.6%
92.4%
97.6%
Spain
69.6%
82.6%
92.1%
94.4%
Sweden
81.4%
88.4%
96.0%
109.1%
Switzerland
72.0%
78.2%
83.9%
88.0%
UK
75.3%
83.4%
88.5%
98.4%
Other
51.4%
64.8%
71.7%
76.4%
Total
71.8%
76.6%
83.2%
90.6%
2005
84.2%
102.4%
85.1%
125.5%
99.7%
92.2%
102.7%
77.5%
89.3%
106.8%
106.2%
104.3%
116.5%
109.6%
133.8%
83.3%
100.1%
98.1%
105.6%
104.2%
110.9%
89.1%
108.5%
85.6%
98.6%
2006
100.4%
111.7%
91.3%
141.2%
104.6%
104.8%
106.0%
84.1%
97.4%
119.9%
114.1%
114.6%
132.1%
110.7%
135.8%
86.1%
96.5%
106.8%
115.8%
113.7%
115.0%
98.2%
114.0%
130.8%
106.9%
2007(E)
102.5%
115.7%
96.7%
151.9%
109.2%
105.9%
110.0%
86.2%
105.8%
132.3%
114.9%
118.6%
141.7%
115.0%
137.5%
92.7%
103.2%
109.3%
119.1%
117.7%
115.2%
102.6%
117.4%
141.3%
112.5%
2008(E)
104.4%
118.5%
100.9%
161.2%
112.1%
106.2%
112.9%
88.3%
111.3%
141.6%
115.3%
122.0%
148.8%
117.7%
138.4%
95.2%
106.7%
111.3%
121.2%
120.9%
115.0%
105.8%
120.6%
149.6%
116.7%
2009(E)
105.9%
120.2%
103.8%
166.5%
114.1%
105.8%
114.5%
89.9%
114.9%
149.1%
115.5%
124.6%
154.5%
118.0%
138.5%
97.2%
109.1%
112.6%
122.3%
122.7%
114.7%
107.5%
122.4%
157.2%
119.6%
2010(E)
107.3%
121.8%
106.0%
169.3%
115.6%
105.1%
116.0%
90.8%
116.9%
153.7%
114.9%
124.7%
159.6%
118.2%
137.7%
99.0%
109.3%
113.5%
122.7%
123.8%
114.1%
108.8%
123.6%
164.0%
121.5%
2011(E)
108.3%
123.3%
108.1%
171.6%
116.8%
104.5%
117.3%
91.5%
118.6%
157.8%
114.3%
124.5%
164.4%
118.2%
136.9%
100.2%
109.4%
114.0%
122.8%
124.7%
113.6%
109.7%
124.5%
169.5%
123.1%
Eastern Europe
Eastern Europe continues to show strong subscriber growth, although we believe

much of the growth is coming from multiple SIM card purchases to avoid high
roaming charges. Of all the regions we forecast, Eastern Europe is the most
susceptible to the multiple SIM card overcounting problem. As a result we
continue to cap the number of mobile subscribers in this region.
We now project Eastern Europe to reach 284.2 million mobile subscribers in
2007 and 311.7 million in 2008. We expect 124.3 million net mobile
subscriber adds from 2007 to 2011, representing a CAGR of 7.1% and the
market reaching 373.7 million subscribers in 2011. We believe net additions
peaked in 2006 and will continue to moderate going forward.
58
2009 is the first real

opportunity for 3G
From a technology perspective, Eastern Europe is a GSM dominated region

yet to start a meaningful transition to 3G WCDMA. This should change in 2008
as licenses get awarded and carriers start to build out their networks. With that
in mind we look at 2008 as a transitional year and 2009 as the first real
opportunity for 3G subscribers to ramp sharply.
Russia and Ukraine the key

countries
Russia (13.0M net adds in 2007) and the Ukraine (6.6M) are the two most
important countries driving net additions in this region. These two
countries represent roughly 56% of net adds in 2007 and 2008 and could see
their importance grow slightly over the next several years. Poland and Romania
are also important given their size, although penetration rates are a bit higher in
these countries.
Exhibit 75.
East Europe Mobile Subscribers
Country
2001
2002
371
850
Albania
Belarus
138
464
Bosnia Herzegovina
440
794
Bulgaria
1,615
2,672
1,741
2,315
Croatia
Czech Republic
6,947
8,601
Estonia
729
910
269
451
Georgia
Hungary
4,968
6,562
517
890
Latvia
Lithuania
1,003
1,625
Macedonia
222
356
235
354
Moldova
Montenegro/Serbia
2,036
2,939
10,115
14,030
Poland
Romania
3,876
4,926
Russia
8,124
17,800
Slovakia
2,226
3,011
Slovenia
1,509
1,749
Ukraine
2,331
3,705
Total
49,412
75,006
Net Adds
21,643
25,594
Growth
77.9%
51.8%
2003
1,034
1,132
1,096
3,313
2,478
9,622
1,039
680
7,355
1,056
2,181
608
495
3,335
17,390
7,058
36,450
3,680
1,726
6,549
108,279
33,273
44.4%
2004
1,213
2,436
1,320
4,932
2,760
10,694
1,277
958
8,122
1,589
3,267
988
798
4,862
23,022
10,210
62,294
4,190
1,876
13,801
160,609
52,330
48.3%
2005
1,465
4,125
1,766
5,322
3,417
10,975
1,351
1,417
8,724
1,812
3,432
1,284
1,097
6,329
26,249
13,399
87,233
4,519
1,789
18,040
203,744
43,136
26.9%
2006
1,818
6,019
1,881
7,021
4,477
11,178
1,409
1,977
9,358
2,241
3,775
1,417
1,427
7,340
32,146
17,455
103,310
4,892
1,795
28,411
249,346
45,602
22.4%
2007(E)
2,169
7,519
2,086
7,786
5,036
11,385
1,465
2,311
9,832
2,523
3,945
1,539
1,694
8,366
37,128
20,958
116,327
5,304
1,818
34,989
284,179
34,833
14.0%
2008(E)
2,454
8,555
2,258
8,204
5,449
11,572
1,513
2,583
10,195
2,627
4,060
1,653
1,923
9,280
41,138
23,928
126,389
5,584
1,842
40,443
311,651
27,472
9.7%
2009(E)
2,671
9,355
2,389
8,526
5,786
11,697
1,549
2,825
10,492
2,694
4,124
1,747
2,135
10,054
44,643
26,401
135,465
5,754
1,862
44,245
334,413
22,762
7.3%
2010(E)
2,835
10,050
2,512
8,717
6,067
11,793
1,581
3,061
10,754
2,758
4,140
1,837
2,340
10,625
47,858
28,626
143,610
5,828
1,879
47,585
354,456
20,043
6.0%
(Thousands)
2011(E) CAGR 07-11
2,976
8.2%
10,673
9.1%
2,618
5.8%
8,889
3.4%
6,316
5.8%
11,842
1.0%
1,608
2.4%
3,283
9.2%
10,957
2.7%
2,819
2.8%
4,153
1.3%
1,922
5.7%
2,539
10.7%
11,181
7.5%
50,968
8.2%
30,745
10.1%
151,652
6.9%
5,887
2.6%
1,892
1.0%
50,773
9.8%
373,692
7.1%
19,236
-13.8%
5.4%
Exhibit 76.
Eastern Europe Mobile Subscriber Penetration By Country
Country
2001
2002
2003
2004
Albania
10.6%
24.0%
28.9%
33.7%
Belarus
1.3%
4.5%
11.0%
23.6%
Bosnia Herzegovina
11.2%
20.0%
27.5%
33.0%
Bulgaria
21.0%
35.1%
44.0%
65.4%
Croatia
40.2%
52.7%
56.0%
62.4%
Czech Republic
67.6%
83.9%
93.9%
104.2%
Estonia
54.0%
65.7%
77.0%
94.6%
Georgia
5.4%
10.1%
13.8%
19.4%
Hungary
49.2%
65.1%
73.2%
80.4%
Latvia
21.7%
37.6%
44.9%
67.6%
Lithuania
27.8%
45.1%
60.7%
90.9%
Macedonia
10.8%
17.3%
29.5%
47.7%
Moldova
5.3%
8.0%
11.1%
18.0%
Montenegro
19.1%
27.5%
31.3%
45.6%
Poland
26.2%
36.3%
45.0%
59.5%
Romania
17.3%
22.1%
31.7%
45.7%
Russia
5.6%
12.3%
25.2%
43.1%
Slovakia
41.1%
55.5%
67.8%
77.2%
Slovenia
78.2%
90.5%
89.2%
95.9%
Ukraine
4.8%
7.7%
13.6%
28.7%
Total
14.4%
22.0%
31.8%
47.2%
59
2005
40.4%
40.0%
41.6%
70.6%
76.7%
107.0%
99.6%
28.7%
86.4%
77.2%
95.5%
61.7%
24.6%
59.4%
67.9%
60.0%
60.4%
83.1%
91.1%
37.5%
59.8%
2006
49.7%
58.3%
41.8%
93.1%
99.6%
108.9%
103.4%
40.1%
92.7%
95.4%
105.1%
67.8%
32.0%
68.9%
83.1%
78.2%
71.5%
89.9%
86.6%
59.1%
73.0%
2007(E)
58.8%
72.8%
44.9%
103.3%
111.2%
111.0%
107.0%
46.8%
97.3%
107.4%
109.8%
73.4%
37.9%
78.5%
96.0%
93.9%
80.5%
97.3%
83.4%
72.8%
83.2%
2008(E)
66.0%
82.9%
47.1%
108.8%
119.3%
112.8%
109.9%
52.4%
100.9%
111.9%
113.0%
78.5%
43.0%
87.1%
106.4%
107.2%
87.5%
102.3%
80.6%
84.2%
91.1%
2009(E)
71.3%
90.6%
48.8%
113.1%
125.7%
114.0%
112.1%
57.2%
103.9%
114.7%
114.8%
82.6%
47.6%
94.3%
115.5%
118.3%
93.7%
105.3%
80.6%
92.1%
97.7%
2010(E)
75.0%
97.4%
49.3%
115.6%
130.8%
114.9%
113.8%
62.0%
106.5%
117.4%
115.2%
86.5%
52.1%
99.7%
123.8%
128.2%
99.4%
106.6%
79.8%
99.0%
103.4%
2011(E)
78.2%
103.4%
49.3%
117.9%
135.1%
115.4%
115.2%
66.5%
108.5%
120.0%
115.6%
90.1%
56.4%
104.9%
131.8%
137.7%
104.9%
107.5%
78.9%
105.7%
108.9%
Asia Pacific
1.61 billion mobile
Asia Pacific remains the core of the mobile subscriber forecast with China and
India dominating both total subscriber levels and net adds. Subscriber trends in
both countries have been stronger than we anticipated and we are raising our
estimates accordingly. We now project Asia Pacific to reach 1.33 billion mobile
subscribers in 2007 and 1.61 billion in 2008.
We expect an impressive 982 million net mobile subscribers adds from 2007 to
2011, representing a four-year CAGR of 14.8% with the market reaching 2.32
billion subscribers in 2011. The key to meeting these numbers is rural expansion
in both China and India where the tele-density is still low. This also means that
much of the growth in this region will still come from 2G GSM.
India net adds pass China in

2007E
We now expect Chinas wireless subscriber base to reach 526.4 million in

2007 and 601.2 million in 2008, up a strong 80.6 million in 2007 and 74.8
million in 2008. In India, we expect the wireless subscriber base to reach
225.9 million in 2007 and 322.9 million in 2008, up a strong 88.6 million in
2007 and 96.9 million in 2008. We project a solid 10.4% 2007-2011 CAGR for
China and a 27.9% CAGR for India. Based on these projections, India should
surpass China as the most important driver of new subscribers in 2007.
Exhibit 77.
China and India Net Subscriber Additions

200,000
180,000
160,000
Thousands of Users
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2001
2002
2003
2004
2005
China
Source: Company reports, CIBC World Markets Corp. and Global Mobile
60
2006
2007(E) 2008(E) 2009(E) 2010(E) 2011(E)
India
Exhibit 78.
2001
11,815
635
144,767
5,702
5,479
6,499
67,101
29,047
7,429
2,392
1,097
11,096
2,859
21,640
7,945
1,252
2,752
329,506
96,964
41.7%
2002
13,182
1,094
206,616
6,119
10,480
11,441
73,514
32,343
8,631
2,388
1,946
15,252
3,244
23,905
17,459
1,727
3,885
433,226
103,719
31.5%
2003
15,170
1,849
257,549
7,194
28,274
18,596
79,847
33,420
11,037
2,778
3,410
22,563
3,477
25,290
22,425
2,749
5,416
541,044
107,819
24.9%
2004
17,477
3,958
317,223
7,773
48,746
24,878
85,484
36,588
14,030
3,132
7,909
32,656
3,854
22,011
27,435
4,634
8,836
666,624
125,580
23.2%
2005
18,831
10,290
375,814
7,764
77,637
41,725
90,259
38,332
18,712
3,609
21,647
36,915
4,319
20,566
30,579
7,801
9,978
814,777
148,152
22.2%
2006
20,184
21,299
445,754
8,062
137,370
60,208
94,936
40,197
19,594
4,111
48,543
43,011
4,673
21,958
40,275
17,339
12,310
1,039,824
225,047
27.6%
2007(E)
20,860
35,007
526,394
8,173
225,938
86,048
100,244
42,951
22,964
4,301
77,911
54,237
5,417
22,705
52,317
30,949
17,216
1,333,633
293,809
28.3%
2008(E)
21,361
50,248
601,173
8,263
322,856
105,713
104,347
44,573
25,156
4,442
101,986
61,450
5,857
23,224
60,360
45,836
21,420
1,608,267
274,634
20.6%
2009(E)
21,745
64,370
666,605
8,348
418,736
123,760
107,766
45,759
26,625
4,545
122,607
66,674
6,082
23,611
66,372
60,623
25,581
1,859,808
251,541
15.6%
2010(E)
21,954
78,172
727,266
8,433
512,202
140,266
110,401
46,928
27,477
4,631
141,734
71,208
6,209
23,758
71,500
72,835
29,709
2,094,682
234,874
12.6%
(Thousands)
2011(E) CAGR 07-11
22,064
1.4%
90,679
26.9%
782,538
10.4%
8,490
1.0%
604,449
27.9%
154,994
15.8%
112,742
3.0%
48,054
2.8%
28,246
5.3%
4,700
2.2%
159,026
19.5%
74,932
8.4%
6,327
4.0%
23,836
1.2%
76,176
9.8%
84,496
28.5%
33,423
18.0%
2,315,172
14.8%
220,490
-6.9%
10.5%
233,358
AP w/o Japan and Korea
AP Net Adds w/o Japan and Korea
85,554
Growth
57.9%
327,369
94,011
40.3%
427,777
100,409
30.7%
544,553
116,775
27.3%
686,185
141,633
26.0%
904,690
218,505
31.8%
1,190,438
285,748
31.6%
1,459,347
268,909
22.6%
1,706,283
246,937
16.9%
1,937,352
231,069
13.5%
2,154,376
217,023
11.2%
16.0%
-6.6%
2010(E)
107.6%
50.7%
54.8%
114.0%
44.3%
54.3%
86.8%
95.3%
105.6%
113.3%
82.5%
76.5%
148.4%
102.6%
107.3%
84.0%
16.5%
55.8%
2011(E)
107.5%
57.8%
58.6%
114.8%
51.5%
59.0%
88.6%
97.2%
106.4%
114.4%
90.5%
79.2%
151.2%
102.5%
113.7%
96.5%
18.4%
61.0%
Asia Pacific Mobile Subscribers

Country
Australia
Bangladesh
China
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
New Zealand
Pakistan
Philippines
Singapore
Taiwan
Thailand
Vietnam
Others
Total
Net Adds
Growth
Exhibit 79.
Asia Pacific Mobile Subscriber Penetration By Country
Country
2001
2002
2003
2004
Australia
61.0%
67.4%
76.9%
88.6%
Bangladesh
0.5%
0.8%
1.3%
2.9%
China
11.4%
16.1%
20.0%
24.6%
Hong Kong
83.4%
83.8%
97.3%
105.1%
India
0.5%
1.0%
2.7%
4.6%
Indonesia
2.8%
4.9%
7.9%
10.6%
Japan
52.9%
57.9%
62.8%
67.2%
Korea
60.6%
66.9%
69.9%
76.1%
Malaysia
33.4%
38.1%
47.8%
60.8%
New Zealand
61.9%
61.1%
70.3%
79.3%
Pakistan
0.8%
1.3%
2.3%
5.2%
Philippines
13.4%
18.0%
26.7%
38.6%
Singapore
69.2%
77.5%
83.1%
92.1%
Taiwan
96.7%
106.0%
111.9%
97.4%
Thailand
12.9%
28.0%
34.9%
42.7%
Vietnam
1.6%
2.1%
3.4%
5.7%
Others
1.6%
2.3%
3.1%
5.1%
Total
9.5%
12.4%
15.4%
18.9%
2005
94.9%
7.3%
29.1%
105.0%
7.3%
17.5%
71.0%
79.4%
79.4%
90.8%
14.1%
42.9%
103.2%
90.6%
47.3%
9.5%
5.7%
22.9%
2006
101.2%
14.8%
34.3%
109.0%
12.7%
24.8%
74.6%
82.9%
81.5%
102.9%
30.8%
49.2%
111.7%
96.4%
61.9%
20.8%
7.0%
28.9%
2007(E)
104.0%
24.0%
40.3%
110.5%
20.5%
34.9%
78.8%
88.3%
93.7%
107.0%
48.4%
61.1%
129.4%
99.3%
80.0%
36.8%
9.7%
36.7%
2008(E)
105.9%
33.8%
45.8%
111.7%
28.9%
42.2%
82.0%
91.2%
100.6%
109.9%
62.0%
68.1%
140.0%
101.1%
91.7%
54.0%
12.0%
43.8%
2009(E)
107.2%
42.5%
50.5%
112.9%
36.8%
48.6%
84.7%
93.3%
104.3%
111.8%
72.9%
72.7%
145.3%
102.4%
100.2%
70.7%
14.3%
50.1%
Middle East and Africa

61
We project the Middle East and Africa region to reach 415.9 million mobile
subscribers in 2007 and 499.1 million in 2008. Given its large population
and low penetration rate this region is the second most important (behind Asia
Pacific) in terms of growth prospects. If current trends continue, we look for
392.1 million net mobile subscriber adds from 2007 to 2011, representing a
CAGR of 14.7% with the market reaching 718.6 million subscribers in 2011.
As noted, this region remains the lowest penetrated region at an estimated

31.6% for 2007, but given its size it has now passed North America, Latin
America and Eastern Europe in the number of mobile subscribers. If growth
continues at its current rate, this region will surpass Western Europe in size
during 2008 and then trail only the very large Asia Pacific region in the number
of mobile subscribers.
MEA remains the lowest

penetrated region
The most important countries in this region from a net addition perspective
include Nigeria (10.7M in 2007) and Turkey (7.1M), although Algeria, Egypt,
and Iran are also large contributors. Of this group Nigeria, Egypt and Iran still
have low subscriber penetration rates and should continue to drive net adds
throughout the forecast period.
Although we are bullish on the opportunity in this region, we continue to caution
that subscriber growth could be volatile. This region is susceptible to political
unrest and has a wide disparity in the types of economies involved.
Wide disparity in the

economies in this region
Exhibit 80.
Middle East and Africa Mobile Subscribers
Country
2001
2002
Algeria
95
451
Egypt
3,399
4,327
Morocco
4,723
6,005
Nigeria
421
1,506
South Africa
9,478
11,609
Tunisia
391
576
Other Africa
6,375
10,594
Total Africa
24,882
35,068
(Thousands)
2011(E) CAGR 07-11
44,133
12.7%
39,217
14.6%
28,404
9.8%
80,470
19.3%
49,935
6.1%
11,404
6.7%
212,442
20.4%
466,005
15.9%
2003
1,449
5,652
7,333
3,160
15,006
1,845
16,619
51,065
2004
4,856
7,472
9,081
9,386
19,434
3,757
25,399
79,385
2005
13,484
12,586
12,823
18,376
29,678
5,658
35,323
127,928
2006
20,989
17,716
15,877
28,976
35,480
7,339
69,119
195,495
2007(E)
27,369
22,730
19,574
39,711
39,347
8,814
101,059
258,605
2008(E)
32,707
27,192
22,627
50,804
42,574
9,713
130,217
315,835
2009(E)
37,220
31,455
25,146
61,306
45,512
10,345
158,504
369,486
2010(E)
41,054
35,652
27,259
71,276
48,015
10,882
185,539
419,675
2,092
5,797
5,040
23,331
2,320
6,429
45,009
3,341
6,363
7,240
28,537
2,941
8,674
57,096
3,725
6,920
9,150
34,120
3,688
13,885
71,488
8,525
7,849
13,512
43,588
4,500
19,870
97,844
14,329
8,419
20,068
51,659
5,500
31,077
131,052
20,118
8,642
23,741
58,685
5,858
40,203
157,246
27,320
8,829
27,058
64,893
6,098
49,042
183,240
34,423
8,985
29,782
70,604
6,268
57,625
207,687
41,480
9,126
32,041
75,688
6,369
66,038
230,741
48,117
9,226
34,123
80,532
6,451
74,160
252,610
24.4%
1.6%
9.5%
8.2%
2.4%
16.5%
12.6%
Total MEA
59,774
80,077
Net Adds
18,329
20,303
Growth
44.2%
34.0%
108,161
28,084
35.1%
150,873
42,712
39.5%
225,772
74,899
49.6%
326,547
100,775
44.6%
415,851
89,304
27.3%
499,075
83,224
20.0%
577,174
78,099
15.6%
650,416
73,242
12.7%
718,615
68,199
10.5%
14.7%
-6.5%
MEA Mobile Subscriber Penetration By Country

Country
2001
2002
Algeria
0.3%
1.4%
Egypt
4.9%
6.1%
Morocco
15.4%
19.3%
Nigeria
0.3%
1.2%
South Africa
21.7%
26.6%
Tunisia
4.0%
5.9%
Other Africa
1.3%
2.0%
2003
4.4%
7.6%
23.1%
2.4%
35.1%
18.6%
3.1%
2004
15.1%
9.8%
28.2%
6.8%
45.5%
37.7%
4.7%
2005
41.3%
16.1%
39.3%
12.9%
68.8%
56.3%
6.4%
2006
63.3%
22.3%
47.9%
19.8%
81.4%
72.4%
12.2%
2007(E)
81.4%
28.0%
58.3%
26.4%
89.4%
86.3%
17.5%
2008(E)
96.0%
32.9%
66.4%
32.9%
95.8%
94.3%
22.2%
2009(E)
107.7%
37.4%
72.8%
38.6%
101.3%
99.6%
26.4%
2010(E)
117.1%
41.6%
77.8%
43.6%
105.9%
104.0%
30.3%
2011(E)
124.2%
44.9%
80.0%
47.9%
109.0%
108.1%
34.0%
Iran
Israel
Saudi Arabia
Turkey
United Arab Emirates
Other Middle Eastern Markets
Iran
Israel
Saudi Arabia
Turkey
United Arab Emirates
Other Middle East
Total Middle East
1,555
5,148
2,987
18,983
1,850
4,370
34,892
Exhibit 81.
Total
62
2.4%
86.7%
13.1%
28.5%
76.3%
2.5%
3.2%
96.1%
21.4%
34.7%
94.2%
3.6%
4.9%
105.5%
29.8%
41.9%
116.9%
4.7%
5.4%
105.6%
35.5%
48.1%
146.1%
7.3%
12.1%
117.9%
50.9%
60.5%
175.7%
10.3%
20.2%
124.5%
73.5%
70.8%
211.8%
15.7%
28.0%
125.8%
84.6%
79.3%
222.5%
19.8%
37.5%
126.4%
93.8%
86.4%
228.4%
23.6%
46.7%
126.6%
100.4%
92.7%
231.5%
27.1%
55.6%
126.6%
105.0%
98.0%
231.9%
30.4%
63.8%
126.0%
108.8%
102.9%
231.7%
33.3%
5.2%
6.8%
9.0%
12.2%
17.9%
25.3%
31.6%
37.2%
42.2%
46.6%
50.4%
Subscriber Technology Trends

GSM dominates; CDMAs
reach grows with WCDMA
Exhibits 82-84 present our mobile subscriber forecast from a network technology
perspective. General trendwise there is no change. Over the next several years
we expect fewer and fewer subscribers with 2G technology (TDMA, GSM,
and CDMA) and increasing numbers of 3G subscribers (EV-DO and
WCDMA/HSPA), effectively mirroring the trends we highlighted earlier in the
handset section.
4G on the radar, but were

not splitting it out yet
At this point we are not splitting out mobile WiMAX subscribers, although
we could see a small ramp in 2008 and 2009 proving the viability of the
technology. We are also not splitting out 4G LTE or UMB subscribers,
which could see some adoption in 2010 or 2011.
GSM 77.1% and 2G CDMA

13.4% of 2008E subs
GSM remains the dominant technology accounting for 2.78 billion

mobile subscribers in 2008, or 77.1% of the overall market. The
CDMA/EV-DO subscriber base has compressed some and is expected to account
for 482.3 million total subscribers in 2008 or approximately 13.4% of the global
market. However, if WCDMA (the GSM 3G path) is included in the CDMA
category total CDMA subscribers jumps to 804.9 million or approximately 22.3%
of the global market.
3G 35.5% of total subs in

2011E
The strongest growth for individual technologies is coming from the 3G

technologies, WCDMA (a 2007-2011 CAGR of 61.9%) and EV-DO (a 20072011 CAGR of 50.2%). With GSM carriers transitioning to 3G WCDMA, CDMA
based technologies could account for over 35.5% of total subscribers in 2011.
The growth in 3G is coming at the expense of declines in dying technologies
(analog, TDMA, and PDC) and as GSM/GPRS and CDMA subscribers are
upgraded to 3G technology.
Exhibit 82.
Worldwide Subscribers by Technology
2001
2002
AMPS/TACS/NMT
47,598
33,029
GSM/GPRS/EDGE
629,649
791,654
TDMA
90,464
104,991
CDMA/EVDO
110,540
140,064
CDMA
110,540
139,894
EVDO
0
170
WCDMA/HSPA
27
250
PDC
56,837
60,050
iDEN
9,183
11,190
Total
944,299 1,141,229
Growth
30.1%
20.9%
63
2003
27,183
988,112
108,552
177,948
173,510
4,438
2,661
61,817
14,105
1,380,377
21.0%
2004
21,710
1,251,588
98,966
232,383
220,363
12,020
22,396
57,859
17,515
1,702,418
23.3%
2005
14,832
1,579,111
106,752
273,546
248,907
24,638
48,533
59,388
19,835
2,101,996
23.5%
2006
6,833
2,007,455
64,745
372,967
320,475
52,492
97,071
32,006
21,625
2,602,702
23.8%
2007(E)
2,187
2,472,385
25,187
423,753
338,017
85,736
180,881
10,690
16,834
3,131,919
20.3%
2008(E)
283
2,775,105
9,794
482,313
341,161
141,152
322,577
2,801
8,585
3,601,457
15.0%
2009(E)
0
2,926,363
2,301
539,446
300,726
238,719
539,802
744
3,823
4,012,479
11.4%
2010(E)
0
2,938,482
0
586,051
238,369
347,682
856,554
0
1,505
4,382,592
9.2%
(Thousands)
2011(E) CAGR 03-07 CAGR 07-11
0
-46.7%
NM
2,854,919
25.8%
3.7%
0
-30.6%
NM
630,360
24.2%
10.4%
193,758
18.1%
-13.0%
436,602
109.6%
50.2%
1,243,955
187.1%
61.9%
0
-35.5%
NM
0
4.5%
NM
4,729,234
22.7%
10.9%
7.9%
Exhibit 83.
Worldwide Net Subscriber Adds by Technology
2001
2002
AMPS/TACS/NMT
-18,656
-14,569
GSM/GPRS/EDGE
174,538
162,006
TDMA
21,441
14,527
CDMA/EVDO
32,705
29,524
CDMA
32,705
29,354
EVDO
0
170
WCDMA/HSPA
27
223
PDC
6,038
3,213
iDEN
2,278
2,007
Total
218,371
196,930
Growth
-11.5%
-9.8%
2003
-5,846
196,457
3,561
37,884
33,616
4,268
2,411
1,767
2,915
239,149
21.4%
2004
-5,472
263,477
-9,585
54,435
46,853
7,582
19,735
-3,958
3,410
322,041
34.7%
2005
-6,879
327,522
7,786
41,163
28,545
12,619
26,136
1,529
2,320
399,578
24.1%
2006
-7,998
428,344
-42,007
99,421
71,568
27,853
48,538
-27,382
1,790
500,706
25.3%
2007(E)
-4,646
464,930
-39,557
50,786
17,542
33,244
83,810
-21,315
-4,791
529,217
5.7%
2008(E)
-1,905
302,720
-15,394
58,560
3,144
55,417
141,696
-7,889
-8,250
469,539
-11.3%
2009(E)
-283
151,258
-7,492
57,133
-40,434
97,567
217,224
-2,058
-4,761
411,021
-12.5%
2010(E)
0
12,119
-2,301
46,605
-62,358
108,963
316,753
-744
-2,319
370,113
-10.0%
(Thousands)
2011(E) CAGR 03-07 CAGR 07-11
0
-5.6%
NM
-83,564
24.0%
NM
0
NM
-100.0%
44,309
7.6%
-3.4%
-44,611
-15.0%
NM
88,920
67.1%
27.9%
387,401
142.8%
46.6%
0
NM
NM
-1,505
NM
-25.1%
346,642
22.0%
-10.0%
-6.3%
Exhibit 84.
Worldwide Subscribers by Technology (% of Total Subscribers)
2001
2002
2003
2004
AMPS/TACS/NMT
5.0%
2.9%
2.0%
1.3%
GSM/GPRS/EDGE
66.7%
69.4%
71.6%
73.5%
TDMA
9.6%
9.2%
7.9%
5.8%
CDMA/EVDO
11.7%
12.3%
12.9%
13.7%
CDMA
11.7%
12.3%
12.6%
12.9%
EVDO
0.0%
0.0%
0.3%
0.7%
WCDMA/HSPA
0.0%
0.0%
0.2%
1.3%
PDC
6.0%
5.3%
4.5%
3.4%
iDEN
1.0%
1.0%
1.0%
1.0%
Total
100.0%
100.0%
100.0%
100.0%
64
2005
0.7%
75.1%
5.1%
13.0%
11.8%
1.2%
2.3%
2.8%
0.9%
100.0%
2006
0.3%
77.1%
2.5%
14.3%
12.3%
2.0%
3.7%
1.2%
0.8%
100.0%
2007(E)
0.1%
78.9%
0.8%
13.5%
10.8%
2.7%
5.8%
0.3%
0.5%
100.0%
2008(E)
0.0%
77.1%
0.3%
13.4%
9.5%
3.9%
9.0%
0.1%
0.2%
100.0%
2009(E)
0.0%
72.9%
0.1%
13.4%
7.5%
5.9%
13.5%
0.0%
0.1%
100.0%
2010(E)
0.0%
67.0%
0.0%
13.4%
5.4%
7.9%
19.5%
0.0%
0.0%
100.0%
2011(E)
0.0%
60.4%
0.0%
13.3%
4.1%
9.2%
26.3%
0.0%
0.0%
100.0%
IMPORTANT DISCLOSURES:
Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report, or
at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein
accurately reflect such research analyst's personal views about the company and securities that are the subject of this
report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii)
no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific
recommendations or views expressed by such research analyst in this report.
Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from
revenues generated by various CIBC World Markets businesses, including the CIBC World Markets Investment Banking
Department within the Corporate and Leveraged Finance Division. Research analysts do not receive compensation based
upon revenues from specific investment banking transactions. CIBC World Markets generally prohibits any research
analyst and any member of his or her household from executing trades in the securities of a company that such research
analyst covers. Additionally, CIBC World Markets generally prohibits any research analyst from serving as an officer,
director or advisory board member of a company that such analyst covers.
In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report,
CIBC World Markets may have a long position of less than 1% or a short position or deal as principal in the securities
discussed herein, related securities or in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures
set forth below, may at times give rise to potential conflicts of interest.
65
Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered
by CIBC World Markets:
Stock Prices as of 01/10/2008:
Alvarion (1) (ALVR-OTC, US$8.61, Sector Performer)
AT&T, Inc. (T-NYSE, US$38.82, Sector Outperformer)
Brightpoint Inc. (1, 2f) (CELL-NASDAQ, US$13.97, Sector Outperformer)
Ceragon Networks (1, 2a, 2b, 2d, 2f) (CRNT-NASDAQ, US$10.89, Sector Performer)
China GrenTech Corp. (1, 2a, 2b, 2c, 2d, 2e, 2f) (GRRF-NASDAQ, US$6.86, Sector Performer)
Google Inc. (1) (GOOG-OTC, US$644.50, Sector Outperformer)
Harris Stratex Networks, Inc. (1) (HSTX-NASDAQ, US$16.97, Sector Outperformer - Speculative)
LM Ericsson AB (1) (ERIC-OTC, US$22.16, Sector Performer)
Microsoft Corporation (1) (MSFT-OTC, US$33.99, Sector Performer)
Motorola, Inc. (2f) (MOT-NYSE, US$14.62, Sector Outperformer)
NAVTEQ Corporation (NVT-NYSE, US$74.51, Not Rated)
Nokia Corporation (NOK-NYSE, US$34.62, Sector Performer)
Nortel Networks Corporation (2a, 2d, 2g, 7, 9) (NT-NYSE, US$12.14, Sector Performer)
Novatel Wireless Inc. (1) (NVTL-OTC, US$13.93, Sector Outperformer)
Powerwave Technologies, Inc. (1) (PWAV-OTC, US$3.30, Sector Performer)
Qiao Xing Mobile Communication (2a, 2b, 2c, 2d, 2e, 2f) (QXM-NYSE, US$8.00, Sector Performer)
Qualcomm (1) (QCOM-OTC, US$38.04, Sector Outperformer)
Research In Motion Ltd. (1, 7) (RIMM-NASDAQ, US$98.11, Sector Performer)
RF Micro Devices, Inc. (1) (RFMD-OTC, US$4.96, Sector Outperformer)
Sierra Wireless Inc. (1, 2a, 2b, 2c, 2e, 2g) (SWIR-NASDAQ, US$13.68, Sector Outperformer)
Skyworks Solutions, Inc. (1) (SWKS-OTC, US$7.94, Sector Outperformer)
Sprint Nextel (S-NYSE, US$12.42, Sector Performer)
Texas Instruments (TXN-NYSE, US$30.18, Sector Performer)
Verizon (VZ-NYSE, US$42.81, Sector Performer)
Companies Mentioned in this Report that Are Not Covered by CIBC World Markets:
Airspan Networks Inc. (AIRN-NASDAQ, US$1.23, Not Rated)
Alcatel-Lucent (ALU-NYSE, US$6.57, Not Rated)
America Movil (AMX-NYSE, US$59.27, Not Rated)
Anadigics, Inc. (ANAD-OTC, US$9.20, Not Rated)
Anaren Microwave (ANEN-OTC, US$14.73, Not Rated)
Apple Computer (AAPL-OTC, US$176.25, Not Rated)
Carphone Warehouse Group (CPW.L-OTC, US$308.00, Not Rated)
China Mobile (CHL-NYSE, US$87.56, Not Rated)
Clearwire (CLWR-NASDAQ, US$21.56, Not Rated)
Compal Communications (8078-TW, [TWD]77.20, Not Rated)
Deutsche Telekom (DT-NYSE, US$22.78, Not Rated)
France Telecom (FTE-NYSE, US$38.12, Not Rated)
High Tech Computer Corp (2498-TW, [TWD]556.00, Not Rated)
Hutchison Telecommunications (HTX-NYSE, US$22.01, Not Rated)
Lenovo Group (LNVGY-PN, US$20.80, Not Rated)
LG Electronics (066570-KS, [KRW]104000.00, Not Rated)
MTN Group (MTN-SA, R4740.00, Not Rated)
66
Companies Mentioned in this Report that Are Not Covered by CIBC World Markets:
(Continued)
O2 Plc (OOM-NYSE, p199.50, Not Rated)
Option N.V. (OPTI-BR, 17.45, Not Rated)
Orange plc (OGE-L, p635.50, Not Rated)
Palm, Inc. (PALM-OTC, US$5.41, Not Rated)
Pantech Co. (025930-KS, [KRW]1230.00, Not Rated)
Reliance Communications Ltd (RLCM-BO, [INR]455.50, Not Rated)
SAGEM (SAGM-PA, 15.53, Not Rated)
Samsung Electric (005930-KS, [KRW]539000.00, Not Rated)
Sony (SNE-NYSE, US$56.07, Not Rated)
TriQuint Semiconductor, Inc. (TQNT-OTC, US$5.39, Not Rated)
UTStarcom Inc. (UTSI-OTC, US$2.87, Not Rated)
Vodafone (VOD-NYSE, US$37.02, Not Rated)
Vyyo Incorporated (VYYO-OTC, US$2.42, Not Rated)
WJ Communications (WJCI-OTC, US$0.72, Not Rated)
Zhongxing Teleco (ZTE) (63-SZ, [CNY]23.40, Not Rated)
ZTE Corporation (763-HK, [HKD]41.00, Not Rated)
Important disclosure footnotes that correspond to the footnotes in this table may be found in the "Key to
Important Disclosure Footnotes" section of this report.
67
Key to Important Disclosure Footnotes:

1
2a
2b
2c
2d
2e
2f
2g
3a
3b
3c
4a
4b
4c
5a
5b
6a
6b
7
8
9
10
CIBC World Markets Corp. makes a market in the securities of this company.
This company is a client for which a CIBC World Markets company has performed investment banking services
in the past 12 months.
CIBC World Markets Corp. has managed or co-managed a public offering of securities for this company in the
past 12 months.
CIBC World Markets Inc. has managed or co-managed a public offering of securities for this company in the
past 12 months.
CIBC World Markets Corp. has received compensation for investment banking services from this company in
the past 12 months.
CIBC World Markets Inc. has received compensation for investment banking services from this company in the
past 12 months.
CIBC World Markets Corp. expects to receive or intends to seek compensation for investment banking services
from this company in the next 3 months.
CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services
from this company in the next 3 months.
This company is a client for which a CIBC World Markets company has performed non-investment banking,
securities-related services in the past 12 months.
CIBC World Markets Corp. has received compensation for non-investment banking, securities-related services
from this company in the past 12 months.
CIBC World Markets Inc. has received compensation for non-investment banking, securities-related services
from this company in the past 12 months.
This company is a client for which a CIBC World Markets company has performed non-investment banking,
non-securities-related services in the past 12 months.
CIBC World Markets Corp. has received compensation for non-investment banking, non-securities-related
services from this company in the past 12 months.
CIBC World Markets Inc. has received compensation for non-investment banking, non-securities-related
services from this company in the past 12 months.
The CIBC World Markets Corp. analyst(s) who covers this company also has a long position in its common
equity securities.
A member of the household of a CIBC World Markets Corp. research analyst who covers this company has a
long position in the common equity securities of this company.
The CIBC World Markets Inc. fundamental analyst(s) who covers this company also has a long position in its
common equity securities.
A member of the household of a CIBC World Markets Inc. fundamental research analyst who covers this
company has a long position in the common equity securities of this company.
CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1%
or more of a class of equity securities issued by this company.
A partner, director or officer of CIBC World Markets Inc. or any analyst involved in the preparation of this
research report has provided services to this company for remuneration in the past 12 months.
A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"), the parent company
to CIBC World Markets Inc. and CIBC World Markets Corp., or a member of his/her household is an officer,
director or advisory board member of this company or one of its subsidiaries.
11
12
Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC
World Markets Corp., has a significant credit relationship with this company.
The equity securities of this company are restricted voting shares.
The equity securities of this company are subordinate voting shares.
13
14
The equity securities of this company are non-voting shares.

The equity securities of this company are limited voting shares.
68
CIBC World Markets Price Chart

For price and performance information charts required under NYSE and NASD rules, please visit CIBC on the web at
http://www.cibcwm.com/research/sec2711 or write to CIBC World Markets Corp., 300 Madison Avenue, 7th Floor, New
York, NY 10017-6204, Attn: Research Disclosure Chart Request.
CIBC World Markets' Stock Rating System

Abbreviation
Rating
Description
SO
Sector Outperformer
Stock is expected to outperform the sector during the next 12-18 months.
SP
Sector Performer
Stock is expected to perform in line with the sector during the next 12-18 months.
SU
Sector Underperformer
Stock is expected to underperform the sector during the next 12-18 months.
NR
Not Rated
CIBC World Markets does not maintain an investment recommendation on the stock.
Restricted
CIBC World Markets is restricted*** from rating the stock.
Stock Ratings
Sector Weightings**
O
Overweight
Market Weight
Sector is expected to outperform the broader market averages.

Sector is expected to equal the performance of the broader market averages.
Underweight
Sector is expected to underperform the broader market averages.
NA
None
Sector rating is not applicable.
**Broader market averages refer to the S&P 500 in the U.S. and the S&P/TSX Composite in Canada.
"Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues.
***Restricted due to a potential conflict of interest.
Ratings Distribution*: CIBC World Markets' Coverage Universe

(as of 09 Jan 2008)
Count
Percent
Sector Outperformer (Buy)
382
42.0%
Sector Performer (Hold/Neutral)
458
50.3%
53
5.8%
Sector Underperformer (Sell)
0.7%
Restricted

Restricted
Inv. Banking Relationships
Count
Percent
203
53.1%
236
51.5%
30
56.6%
100.0%
Ratings Distribution: Communication Technology Coverage Universe

(as of 09 Jan 2008)
Count
Percent
Count
Percent
13
46.4%
Inv. Banking Relationships

38.5%
15
53.6%
53.3%
0.0%
0.0%
Restricted
0.0%
Restricted
0.0%
Communication Technology Sector includes the following tickers: ALLT, ALVR, ARRS, AUDC, CELL, CRNT, CSCO, CTV, ERIC, FFIV,
GRRF, HSTX, JNPR, MOT, NOK, NT, NVTL, PWAV, QCOM, QXM, RDWR, RFMD, RIMM, RVBD, RVSN, STV, SWIR, SWKS.
*Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets do
not correlate to buy, hold and sell recommendations, for the purposes of complying with NYSE and NASD rules, CIBC World Markets
has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector Performer, and sell ratings to
securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.
69
Legal Disclaimer
This report is issued and approved for distribution by (i) in the United States, CIBC World Markets Corp., a member
of the New York Stock Exchange ("NYSE"), NASD and SIPC, (ii) in Canada, CIBC World Markets Inc., a member of the
Investment Dealers Association ("IDA"), the Toronto Stock Exchange, the TSX Venture Exchange and CIPF, (iii) in the
United Kingdom, CIBC World Markets plc, which is regulated by the Financial Services Authority ("FSA"), and (iv) in
Australia, CIBC World Markets Australia Limited, a member of the Australian Stock Exchange and regulated by the ASIC
(collectively, "CIBC World Markets"). This report is provided, for informational purposes only, to institutional investor
clients of CIBC World Markets in the United States and Canada and retail clients of CIBC World Markets in Canada, and
does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such
offer or solicitation would be prohibited. This document and any of the products and information contained herein are
not intended for the use of private investors in the United Kingdom. Such investors will not be able to enter into
agreements or purchase products mentioned herein from CIBC World Markets plc. The comments and views expressed
in this document are meant for the general interests of clients of CIBC World Markets Australia Limited.
The securities mentioned in this report may not be suitable for all types of investors. This report does not take into
account the investment objectives, financial situation or specific needs of any particular client of CIBC World Markets.
Recipients should consider this report as only a single factor in making an investment decision and should not rely solely
on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of
the merits and risks of investments. The analyst writing the report is not a person or company with actual, implied or
apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with
respect to any security recommended in this report, the recipient should consider whether such recommendation is
appropriate given the recipient's particular investment needs, objectives and financial circumstances. CIBC World
Markets suggests that, prior to acting on any of the recommendations herein, Canadian retail clients of CIBC World
Markets contact one of our client advisers in your jurisdiction to discuss your particular circumstances. Non-client
recipients of this report who are not institutional investor clients of CIBC World Markets should consult with an
independent financial advisor prior to making any investment decision based on this report or for any necessary
explanation of its contents. CIBC World Markets will not treat non-client recipients as its clients solely by virtue of their
receiving this report.
Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is
made regarding future performance of any security mentioned in this report. The price of the securities mentioned in
this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors
may realize losses on investments in such securities, including the loss of investment principal. CIBC World Markets
accepts no liability for any loss arising from the use of information contained in this report, except to the extent that
liability may arise under specific statutes or regulations applicable to CIBC World Markets.
Information, opinions and statistical data contained in this report were obtained or derived from sources believed to
be reliable, but CIBC World Markets does not represent that any such information, opinion or statistical data is accurate
or complete (with the exception of information contained in the Important Disclosures section of this report provided by
CIBC World Markets or individual research analysts), and they should not be relied upon as such. All estimates, opinions
and recommendations expressed herein constitute judgments as of the date of this report and are subject to change
without notice.
Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can
change, any reference in this report to the impact of taxation should not be construed as offering tax advice on the tax
consequences of investments. As with any investment having potential tax implications, clients should consult with their
own independent tax adviser.
This report may provide addresses of, or contain hyperlinks to, Internet web sites. CIBC World Markets has not
reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such
address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked thirdparty web sites is not in any way incorporated into this document. Recipients who choose to access such third-party web
sites or follow such hyperlinks do so at their own risk.
Although each company issuing this report is a wholly owned subsidiary of Canadian Imperial Bank of Commerce
("CIBC"), each is solely responsible for its contractual obligations and commitments, and any securities products offered
or recommended to or purchased or sold in any client accounts (i) will not be insured by the Federal Deposit Insurance
Corporation ("FDIC"), the Canada Deposit Insurance Corporation or other similar deposit insurance, (ii) will not be
deposits or other obligations of CIBC, (iii) will not be endorsed or guaranteed by CIBC, and (iv) will be subject to
investment risks, including possible loss of the principal invested. The CIBC trademark is used under license.
2008 CIBC World Markets Corp. and CIBC World Markets Inc. All rights reserved. Unauthorized use,
distribution, duplication or disclosure without the prior written permission of CIBC World Markets is prohibited by law and
may result in prosecution.
70

CIBC 2008 Handset Guide

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Equity Research

2008 Handset Market Guidebook

Market Fundamentals Strong: Raising Estimates

All figures in US dollars, unless otherwise stated.

Find CIBC research on Bloomberg, Reuters, firstcall.com

2008 Handset Market Guidebook - January 10, 2008

2008 Handset Market Guidebook - January 10, 2008

1.13B handsets to ship in

Market growth of 14.6% in

Our revised shipment estimates imply year-over-year (YoY) handset growth of

Growth slowing but at a

ASP still dropping, but not a

Revenue growth a step

QCOMs WCDMA targets

We continue to see a meaningful transition toward 3G, with mature markets

4 billion subs around the

Emerging markets more

2008 Handset Market Guidebook - January 10, 2008

Chinas top spot safe, but

We expect India to surpass China as the most important driver of new

Motorolas our top pick the

RIM to sustain gains through

Nokia - more gains will be

Nokia remains the industry benchmark, with an estimated 2007 market

Samsung retakes the No. 2

Derivatives on the strong unit trends include component suppliers Qualcomm,

Brightpoint, Novatel and

Other well-positioned players include distributor/logistics provider Brightpoint

Wireless Communication Vendors

Large Cap Wireless Equipment Vendors

Wireless Data Products

2008 Handset Market Guidebook - January 10, 2008

2008 Handset Market Guidebook - January 10, 2008

Handset Industry Outlook

Emerging markets include Latin America, Eastern Europe, MEA, and

Raising our 2008 worldwide

CAGR dropping to 10.2% for

Worldwide Mobile Handset Shipments

Source: Company reports and CIBC World Markets Corp.

2008 Handset Market Guidebook - January 10, 2008

China and India are the

79.2% of handset shipments

As weve already noted, it is increasingly difficult to find new subscribers in the

Replacement rate to reach

We also see the rate of replacement purchases increasing. We calculate

2008 Handset Market Guidebook - January 10, 2008

Factors we see contributing to a higher replacement rate include:

New features - New functionality at lower prices remains an important

Accessorizing - Handsets have become fashion accessories for some and

Emerging markets As penetration rates increase in emerging markets,

While we are still positive on handset shipments growth through 2011, we

2008 Handset Market Guidebook - January 10, 2008

gains/losses to evaluate the prospects of the individual OEMs. Therefore, we

Handset sales of $136.6B in

Worldwide handset ASP of

Our 2007 market revenue estimate assumes a worldwide ASP of $121.

More aggressive price

2008 Handset Market Guidebook - January 10, 2008

Total Handset Revenue by Region - % Contribution