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HANDSETS GET A LATIN BEAT REPORT EXCERPT

2008 Pyramid Research, www.pyramidresearch.com



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R E S E A R C H R E P O R T

Handsets Get a Latin Beat

Mobile Users in Latin America Turn to Music,
Cameras and 3G


HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti

Report overview
Handsets Get a Latin Beat: Mobile Users in Latin America Turn to Music, Cameras and 3G

Over the past couple of years, the market for mobile handsets in Latin America has grown
remarkably, driven by a healthy increase in mobile subscribers as well as by a vibrant replacement
market. Device sales will increase further through 2012, with Brazil and Mexico the biggest
opportunities. This profound transformation will involve such factors as rising mobile penetration
rates, adoption of 3G, a growing replacement market and demand for music and camera features.

Pyramid Research, in a Report titled Handsets Get a Latin Beat: Mobile Users in Latin America
Turn to Music, Cameras and 3G, examines this transformation and what it means to both
handset vendors and mobile operators. It looks at the underlying trends in the mobile market,
including technology developments, mobile services demand, the competitive landscape, ARPS,
the battle between the two largest mobile operators in the region, handset revenue and unit
sales, ASPs, demographic factors and market shares. The Report examines both relevant moves by
operators and the strategies of the major handset vendors in the market, including individual
marketing campaigns and promotions.

Key findings of the Report include:
Users are upgrading from voice-only phones to devices with music and camera capabilities.
Wide-scale deployment of 3G in Latin America is creating numerous opportunities for
handset manufacturers during the 2008-2012 period.
Sony Ericsson and LG have expanded their market shares in the region thanks to their strong
portfolios, effective marketing and above all their strategic alliances with mobile operators.
Working more closely with each other, mobile operators are actively promoting music
phones while vendors are launching new handsets with pre-loaded and exclusive content.

It not only looks at past and future developments in the overall regional market, but also
examines in detail the seven largest country markets: Brazil, Mexico, Venezuela, Argentina,
Colombia, Peru and Chile. For each market, the Report provides a handset market overview,
technology trends, handset price and revenue trends, an ASP forecast, sales of handsets by type of
buyer, an analysis of the competitive landscape, a discussion of key recent campaigns and much
more.


HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
Key questions answered
How strong will the demand drivers such as subscription and penetration growth be in
Latin America through 2012?
How will 3G migrations affect handset demand in various countries, and when?
What role will mobile data uptake play?
How will the battle between Amrica Mvil and Telefnica shape the regions markets?
Can replacement sales keep the overall markets growing as subscriber growth slows?
How are vendors positioning themselves in the smartphone market? Where is smartphone
adoption strongest?
Which handset vendors are making inroads in which markets, and why?
How strong will adoption of cameras and music players be in various countries through
2012? How are operators marketing music phones most successfully?
Will replacement sales make up for declining new-subscriber sales in all top seven
countries?
What will the handset ASP be in the largest markets in Latin America in 2012? Market
revenue?


Target audience
Mobile network operators
Learn where the opportunities are, and how large they are in your markets. Evaluate the relative
strengths of handset vendors and how they can best meet your needs. Gather insight into future
developments through the Reports extensive forecasting of multiple metrics for each of the
regions top seven countries. Benchmark handset sales against competitors or other markets.
Evaluate marketing strategies and identify those that meet your needs.

Handset vendors and distributors
Discover the markets where the opportunities match your strengths. Assess the strategies of your
competitors and learn how best to respond. Evaluate operators on their requirements to form
partnerships that build on what you can offer them.

Infrastructure equipment vendors
Obtain data on past and future market trends for the seven largest markets in Latin America.
Estimate adoption rates of new technologies and the level of infrastructure support required.
Recognize the leading handset manufacturers in specific countries and the opportunities available
to you.

Software and mobile content providers
Find out how the telecom market is changing in one of the most exciting regions of the world, and
locate opportunities for your content and applications. Learn what your existing and prospective
clients whether handset manufacturers or operators are doing, anticipate their challenges
and align your offerings with their strategies.

Investors and financial institutions
Locate the markets where investment opportunities are greatest. Recognize the timeframes of
technology changes that provide openings for new players to enter the market or for existing
players to expand.

HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
Table of contents
Executive summary
Market context: mobile market trends
Mobile services demand
Technology trends
Mobile ARPS and data revenue trends
Mobile service competitive landscape
Amrica Mvil
Telefnica
Latin America mobile handset market overview
Latin America handset demand
Top seven countries in the region
Handset revenue, ASP and unit sales
Technology trends
Music trends
Camera trends
Smartphone trends
Competitive analysis: handset vendors
Market share evolution
Nokia
Motorola
Sony Ericsson
Samsung
LG
Others
Overview of top seven markets
Brazil
Mexico
Venezuela
Argentina
Colombia
Peru
Chile



HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
Table of exhibits
Mobile subscriptions and penetration in Latin America, 2005-2012
Key market indicators, 2007A
Mobile penetration by country, 2007
Total mobile subscribers 2007
Total mobile subscribers 2012
Mobile subscriptions in Latin America by technology family, 2003-2012
Countries in Latin America with 3G (UMTS-HSPA and CDMA EVDO)
Total revenue, and data revenue as percentage of total revenue, 2005-2012
Mobile data revenue mix
ARPS comparison by market (US$), 2007
Data ARPS as a percentage of total ARPS, 2007
Subscriber totals in Latin America by operator, 2002
Subscriber totals in Latin America by operator, 2007
Subscriber totals in Latin America by operator, 2012E
Amrica Mvil: Key indicators
Amrica Mvils market rank and market share at year-end 2007
Telefnica: Key indicators
Telefnica Movistar market rank and market share at year-end 2007
Telefnica Mviles merged with Telefnica: New strategic model
Sales of handsets to end users by category In Latin America, 2005, 2012
Largest handset markets in Latin America 2007
Total handset sales in Latin America, 2007
Total market ASP 2006-2012
Total market handset revenue 2006-2012
Total market ASP in top seven markets 2007
Total market handset revenue in top seven markets 2007
The size, growth and penetration of handset markets, 2007 (US$)
New handset unit sales by technology group 2007
New handset unit sales by generation 2007
Music handsets sold; music as percentage of handsets sold in Latin America, 2007-2012
Music phones as percentage of handset sales in top seven markets, 2007
Camera phones sold; camera phones as percentage of handsets sold in Latin America
Camera phones as percentage of total sales in top seven markets, 2007
Smartphones sold; percentage of handsets sold
Smartphones as percentage of total handset sales, 2007
Positioning of smartphone players in Latin America
Handset market share (sell-through), 2005-2009
Market share of top five vendors vs. others 2005-2009
Nokia's share of Latin American handset market, 2007
Nokia's market share in top seven markets, 2007
Global initiatives by Nokia
Motorola's share of Latin American handset market, 2007
Motorola's market share in top seven markets, 2007
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Sony Ericsson's share of Latin American handset market, 2007
Sony Ericsson's market share in top seven markets, 2007
Samsung's share of Latin American handset market, 2007
Samsung's market share in top seven markets, 2007
LG's share of Latin American handset market, 2007
LG's market share in top seven markets, 2007
Campaign with Vivo to promote LG KM500
LG official sponsor of Sao Paulo football (soccer) team
Others' share of Latin American handset market, 2007
Brazil:
Sales of handsets to end users by category in Brazil, 2005-2012
New handset sales by technology group 2007: 44.0bn
New handset sales by generation 2007
Total market ASP in Brazil, 2006-2012
Total market handset revenue in Brazil, 2006-2012
Market shares of leading handset vendors in Brazil (2005-2009)
Market shares of mobile operators in Brazil, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Vivo campaign featuring LG KM500
Sony Ericsson K850 featured in Big Brother Brazil
Mexico:
Sales of handsets to end users by category in Mexico, 2005-2012
New handset sales by technology group 2007
New handset sales by generation 2007
Total market ASP in Mexico, 2006-2012
Total market handset revenue in Mexico, 2006-2012
Market shares of leading handset vendors in Mexico (2005-2009)
Market shares of mobile operators in Mexico, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Mother's Day campaign; Telcel prepaid Amigo kit 2007
Mother's Day campaign; Telcel prepaid Amigo kit 2008
Mother's Day campaign; Telcel postpaid plans 2008
Venezuela:
Sales of handsets to end users by category in Venezuela, 2005-2012
New handset sales by technology group 2007
New handset sales by generation 2007
Total market ASP in Venezuela, 2006-2012
Total market handset revenue in Venezuela, 2006-2012
Market shares of leading handset vendors in Venezuela, 2005-2009
Market shares of mobile operators in Venezuela, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Mother's Day campaign Movistar 2007
Mother's Day campaign Movistar 2008
HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
Argentina:
Sales of handsets by category of end users in Argentina, 2005-2012
New handset sales by technology family 2007
New handset sales by generation 2007
Total market ASP in Argentina, 2005-2012
Total market handset revenue in Argentina, 2005-2012
Market shares of leading handset vendors in Argentina
Market shares of mobile operators in Argentina, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Personal's campaign offering free songs with selected devices from Motorola
Colombia:
Sales of handsets to end users by category in Colombia, 2005-2012
New handset sales by technology croup 2007
New handset sales by generation: 2007
Total market ASP in Colombia, 2006-2012
Total market handset revenue in Colombia, 2006-2012
Market shares of leading handset vendors in Colombia, 2005-2009
Market shares of mobile operators in Colombia, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Tour Viajero 2008 Movistar and Motorola partnership
Peru:
Sales of handsets to end users by category in Peru, 2005, 2012
New handset sales by technology group 2007
New handset sales by generation 2007
Total market ASP in Peru, 2006-2012
Total market handset revenue in Peru, 2006-2012
Market shares of leading handset vendors in Peru, 2005-2009
Market shares of mobile operators in Peru, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Movistar in Peru targets the young
Chile:
Sales of handsets to end users by category in Chile, 2005-2012
New handset sales by technology group 2007
New handset sales by generation 2007
Total market ASP in Chile, 2005-2012
Total market handset revenue in Chile, 2005-2012
Market shares of leading handset vendors in Chile, 2005-2009
Market shares of mobile operators in Chile, 2005-2009
Music phones sold; music phones as percentage of handsets sold
Camera phones sold; camera phones as percentage of handsets sold
Movistar Chile: BlackBerry handsets capable of surfing to Facebook


HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
Companies mentioned in this Report

Alcatel (TCT Mobile)
Alegro
Amrica Mvil
Ancel
Apple
AT&T
Audiovox
Avantel
BellSouth
BenQ
Brasil Telecom
Cantv
Centennial Communications
Claro
Comcel
CTI
Digicel
Digitel
Disney
Entel PCS
Facebook
Haier Telecom
Haitel
Hewlett-Packard
HTC
Huawei
Iusacell
Kyocera
LG
Microsoft
Millicom
Motorola
Movilnet


Movistar
Nextel (NII Holdings)
NII Holdings (Nextel)
Ningbo Bird
Nokia
Oi
Orange
Palm
Panasonic
Pantech
Porta
Research in Motion (BlackBerry)
Sagem
Samsung
Sanyo
Skyzen
Sony
Sony Ericsson
Sprint
TCT Mobile (Alcatel)
Telcel
Telecom Italia (TIM)
Telecom Personal
Telecom Venezuela
Telefnica
TIM (Telecom Italia)
Trilogy International Partners
UTStarcom
Verizon Communications
Viva
Vivo
Zonda
ZTE


HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti

About the authors

Omar Salvador, Senior Analyst

Based in Cambridge, Massachusetts, Omar Salvador is a Senior Analyst in the research team of
Pyramid Research. Omar tracks and analyzes market developments and company strategies in the
fixed and mobile communications markets in Latin America, with an emphasis on the Andean region
and Central America. A key area of focus is mobile devices. Omar works on Latin America Market
Perspectives, Forecasts, Reports and consulting projects. He has been quoted by publications such
as The New York Times, Business Week, Bloomberg, Dow Jones, AmricaEconoma and BN
Americas. He frequently appears in the industry press and has been interviewed on CNN en
Espaol.

Prior to joining Pyramid, Omar worked for Institutional Shareholder Services as a global research
analyst focusing on Spain and Latin America, producing analysis for a client base of institutional
investors on a variety of proxy voting issues such as mergers and acquisitions, debt issuances and
capital structure. Prior to this, Omar worked in marketing and sales in the consumer products
industry for brands such as Colgate-Palmolive in Bolivia.

Omar is a graduate of Johns Hopkins University, where he earned his Master of Business
Administration degree with a concentration in International Business. He holds a Bachelor in
Business Administration from Santa Cruz Private University (UPSA) and a one-year diploma in
Business Administration from Georgetown University. Omar is fluent in English and Spanish.


Leslie Arathoon, Vice President of Research

Leslie Arathoon is Vice President of Research for Pyramid Research, responsible for managing the
companys entire portfolio of research, advisory and consulting services. Prior to assuming her
current role, Leslie was Director of Product Strategy for Pyramid Research and Director of Latin
America. Pyramids Researchs Advisory Services provide detailed coverage and analysis of the
communications, media and technology industries in 90-plus countries worldwide. She is based in
the companys headquarters in Cambridge, Massachusetts.

Leslie has developed forecasting models to support Pyramids core advisory services, including
Pyramid Researchs mobile data and mobile operator KPI forecasting models, its fixed
communications forecasting model, its fixed operator market share model and its handset sell-
through forecasting model.

In her 10-year tenure at Pyramid Research, Leslie has worked on a wide variety of consulting
projects, ranging from market sizing and market segmentation to market entry strategies and new
product positioning, as well as valuations, due diligence and partner identification projects.










HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti

HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
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HANDSETS GET A LATIN BEAT REPORT EXCERPT



2008 Pyramid Research, www.pyramidresearch.com

While every effort has been taken to verify the accuracy of this information,
Pyramid Research cannot accept any responsibility or liability for reliance by any
thi i f ti
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