iPopping Digital-Media Value Creation Opportunities, by Richard D. Smith, SMITH-TRG

February 2010

SMITH -TRG BUSINESS PERFORMANCE & VALUE CREATION CONSULTANTS A
Copyright 2010 SMITH-TRG, All rights reserved.

iPopping
By: Richard D. Smith ‘Digital-Media Opportunities to
CEO, SMITH-TRG
RDSmith@SMITH-TRG.com Create Strategic Business Value’

SMITH-TRG

February 2010

contents

 introduction

 MEDIA LANDSCAPE

 OPPORTUNITY

 WHY ACT NOW?

SMITH-TRG

February 2010

WHO WE ARE begins
with WHO WE WERE.

A digital-media venture development and value
creation consulting firm.

Launched second venture as technology sector
imploded, drastically changing the playing field.

Many packed it in. Others didn‟t have the vision,
passion or „Attention Economy‟ experience.

We did. And, we embraced it.

Our consulting, IT/telecom & digital-media roots
uniquely enable us to assist carrier and media
industry/sector/segment CXO‟s develop and
execute business value creation strategies .

As you can tell, our past has a great deal to do
with our present.

As well as our future.

SMITH-TRG

February 2010

OUR value view. . .

"Achieving consistently superior value growth is
the single accomplishment that most clearly
distinguishes great companies from all others. It
is the hallmark of exceptional leaders. In our
experience, a focus on value is our key to helping
clients‟ achieve superior performance, and it
therefore forms the basis of everything we do”.
- Richard D. Smith, SMITH-TRG

SMITH-TRG

February 2010

WHAT we have done. . .
Advised 4 global consumer electronics
innovation leaders on –

 strategy
 product portfolio(s) & pipeline
 high-impact & high-value B2B deals
 M&A
 retail store transformation & expansion
 emerging smartphone & multi-touch screen
markets
 new wireless application platforms & related
services

Developed X-Otica a digital-media enabled
retail store of the future – basis for world‟s
most successful (revenue per square foot)
retail chain

SMITH-TRG

February 2010

plus . . .
Advised wireless carrier, IT, consumer product, media
Advised 4 global consumer electronics
& entertainment, hospitality, –
innovation leaders on automotive, advertising,

and marketing companies on digital-media
 strategy
Assisted mall operators and retail chains ROI optimize
 product portfolio(s) & pipeline
place based „Digital Out-of-Home‟ networks
 high-impact & high-value B2B deals
Authored book, AD-MIRED, „Media‟s Power to Create
 M&A Value‟, 2006
Business
 retail store transformation & expansion
Advised Seoul Korea on „Digital-Media City‟ (DMC),
 emerging smartphone future
multi-billion dollar city of the & multi-touch screen
markets
Foundedwireless Media (AIM2)platforms & related
 new Audient application a audience interactive
mobile-marketing, „Advertainment‟ content, and
services
wireless advertising venture
Developed X-Otica a digital-media enabled
retail store of the future – video-messaging,
Founded Saint CRISPIN a global basis for world’s
most successful (revenue per square foot)
(precursor to „video-mail‟) venture, sold to F-500
retail chain

SMITH-TRG

February 2010

WHAT we believe. . .

“The greatest value creation opportunity
will fall to those who give the end-user
consumer what they want…really, really
want. And that is: an integrated, easy to
use, video media experience, anytime,
anywhere, and on any platform.”
- Richard D. Smith, SMITH-TRG
Author, AD-MIRED, 2006 book

SMITH-TRG


M E D IA LAN D S CAP E
SMITH-TRG
February 2010

Copyright 2010 SMITH-TRG, All rights reserved. February 2010

Market Size
$5 Trillion
Global annual value

SMITH-TRG

February 2010

 Content creators
 Media companies
 Aggregators (network)

Value Chain
 Aggregators (broadcast)
 Back-office Apps
 Network service providers
Pieces  Carriers (domestic/global)
 Infrastructure (IT/services)
 Portals (music/video/books)
From content creation to  Devices (hardware)
distribution to end-user  Devices (software)
 Apps providers
 End-user (media consumer)
 End-user (business)

SMITH-TRG

February 2010

Market

Players
Anyone, small to large, in
and/or around digital-
media eco-system
markets

SMITH-TRG


A Market Mover
Snapshot
Vision. Innovation. Value Creation.

SMITH-TRG

February 2010

 Shares trading $45 to $55

 Retail store chain (26) in
2005 need of re-invention
(Revenue per Sq. Ft. $1,000)
Apple
5 Year Snapshot  Product portfolio & pipeline
decisions required

 Value growth plan pending

SMITH-TRG

February 2010

FANATI C I S M

“I think fanaticism is underrated.
I‟m a fanatic about the engineering
groups. Steve (Jobs) is a fanatic
about the user experience and
the design.”
- Bill Gates, Microsoft
Advice for entrepreneurs, enterprise game changers

SMITH-TRG

February 2010

 Shares reach $199

 Retail chain transformed,

revenue per Sq. Ft. $4,000

2007  iPhone launched, AT%T
Vision & Value Progress exclusive & user revenue
share deal reached

 Product portfolio/roadmap
established

SMITH-TRG


2009
(Apple officially a computer
hardware & software company)
Strategically morphing
itself into a media
company

SMITH-TRG

February 2010

iPhone

A "zero" revenue
contributor three years ago.
Fourth-quarter 2009,
iPhone revenue up 90%
year over year to $5.6 billion.

SMITH-TRG


iPhone & iPod
contribution . . .
$9 billion of total $13.5 billion
in quarterly revenue.
Two thirds of total!

SMITH-TRG

February 2010

 Shares trading @ $200+/-

 Earnings per share up 562%

2010  Shareholder equity up 428%

5th Yr. Value Delivered  Cash on hand up 411%

 Retail chain 250+ stores
world-wide, still $4,000
iPad launched revenue per Sq. Ft.

SMITH-TRG

February 2010

Apple

Systematically tilts wireless Value Strategy
playing field to their advantage.
“Apple extracts more and
Apple designed iPad chip, dubbed more of the value, while
A4, marks strategy shift first carriers get more and
signaled by 2008 purchase more of the costs.”
of start-up P. A. Semi. - Craig Moffett, Senior Analyst
Berstein Research

SMITH-TRG

February 2010

iPad
(again Apple demonstrates)

“To create greater business
value – One does not have to
be first to create, just first to
innovatively perfect what has
been created.” Richard D. Smith

SMITH-TRG


Mobile
Value Growth Sector

SMITH-TRG

February 2010

Global Carriers

Forecasted Wireline & Wireless Revenues

Transport Revenues $1.65T
2007 vs. 2012
$2.2T

Trends Dial-up
Broadband % share
Wireline % share
3%
8%
42%
2%
11%
31%
Wireless % share 47% 56%
(does not include satellite carriers)

Source: Verizon study

SMITH-TRG

February 2010

U.S. Wireless Growth

2005 vs. 2009

U.S. Subscribers
Penetration
194.4M
66%
276.6M
89%

Wireless
(% of U.S. Population)
Wireless Only Households 7% 20%
Annual Total Rev. $108.5B $151.2B
Annual Data Rev. $8.5B $37.0B
Annual Minutes of Use 1.26T 2.23T
Annual SMS Messages 52.2B 1.36T
(Source: CTIA)

SMITH-TRG

February 2010

Google enters mobile space. . .

Introduces
Android

SMITH-TRG


Why? 5 Billion
Cellphones world-wide
(Global population 6.8 Billion)
Strategic Global Growth

SMITH-TRG

February 2010

Smartphone

Landscape
iPhone has 13.7% share &
74% user satisfaction rating

RIM has 20.9% share &
2nd place positive user
rating with 43%

SMITH-TRG


“Within five years 90 percent
of mobile traffic will be from
Forecast Internet-enabled laptops and
smart phones”.
- John Chambers, Cisco

SMITH-TRG


OPPORTUNITY
SMITH-TRG
February 2010


Reinvention
From M&A to

SMITH-TRG
February 2010

February 2010

„06 Pixar & Disney Merge
A proprietary technology & digital content value-creation deal

SMITH-TRG


Pending M&A
NBC-Universal-Comcast
“Will competition be sustainable with
$30B Merger the largest video and broadband provider
controlling huge quantities of content?”
- H. Waxman (D-Calif.)

SMITH-TRG


Motorola to spin-off wireless
Future Spin-Off handset & TV box business
into new public company
Q1, 2011

SMITH-TRG

February 2010

New Strategy

Content focused company

Enterprise AOL acquired StudioNow
a Nashville based video
Reinvention production firm.

Paid $36.5M cash & stock

SMITH-TRG


From High-Impact Deals
to Media Applications

SMITH-TRG

February 2010

Apple’s exclusive

AT&T carrier deal
expires in 2012.
Will the deal winner be
Verizon, T-Mobile, ?

SMITH-TRG

February 2010

Apps market

larger than Apple
2
and Android. . .
X
Small businesses as
applications developers
(**iPhone 200,000 apps) Downloads!

SMITH-TRG


Mobile
Advertising
High growth Apps market

SMITH-TRG


In-Cinema
„Big-Screen‟ real-time
interactive advertising!
Doable? Yes!
Exist today? No!

SMITH-TRG

February 2010

Imagine

Interactively engaging
viewing audiences with
„Advertainment‟ content in
Traditional, IMAX or Digital
Cinemas.
There are 38,600 movie theatre
screens in the U.S.. In 2009,
1.4 billion patron admissions.

SMITH-TRG


From Multi-Touch Screens
to Niche TV Platforms

SMITH-TRG

February 2010

Digital Signage,
Out-of-Home

Ad Networks
Multi-Touch Wall Screens
the next generation of
place-based signage.

The U.S. retail industry is comprised of nearly 1.1 million establishments with annual
sales of nearly $4.5 trillion. As retailers struggle in today‟s economy, digital signage is
increasingly finding its place as a branding and merchandising tool near point-of-sale.

SMITH-TRG

February 2010

Niche Media
Platforms

Commercial use TV/Screen applications

SMITH-TRG


WHY ACT NOW?

SMITH-TRG
February 2010


A $5 Trillion
Target of Opportunity
(global media sector on growth curve)

SMITH-TRG


It‟s about building your. . .

W H Y ACT N O W ?
SMITH-TRG

February 2010

SMITH-TRG
BUSINESS ADVISORS.
VALUE CREATORS.

We assist. . .

 CEO‟s to create business
Thank you! 
value
CXO Stakeholders to solve
business performance
problems
 Innovators to develop more
successful „customer-centric‟
propositions
 Business Developers to
maximize return on their
investments
www.SMITH-TRG.com

February 2010

OUR digital-media PRACTICE
Enterprise leaders in the digital-media space are known for being

many things. Patient is not one of them.

Consequently, they want someone who understands creating
strategic business value in the media space, they desire „trusted-
business advice‟ and new competitive advantage solutions, and they
want and desire them today!

Fortunately, with two decades of international telecommunications,
wireless, and digital-media industry experience, SMITH-TRG excels,
not just at developing executable strategies specifically for the client,
but developing them quickly.

SMITH-TRG

iPopping Digital-Media Value Creation Opportunities, by Richard D. Smith, SMITH-TRG

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