HPA 2005 Technology HPA 2005 Technology Retreat:Retreat:

CE Industry OverviewCE Industry OverviewBrian Markwalter

Vice President, Technology

Consumer Electronics Association

Trend #1Trend #1

A Strong and Growing Industry

CE Industry GrowthCE Industry GrowthBillions of Revenue

$96.9 $94.2 $95.8$102.6

$113.5$125.7

2000 2001 2002 2003 2004 2005

10.7%7.1%

10.7%

Audio Quarterly TrendsAudio Quarterly Trends

Year-Over-Year Changes

-30%

-20%

-10%

0%

10%

20%

30%

Q1 2

001

Q2 2

001

Q3 2

001

Q4 2

001

Q1 2

002

Q2 2

002

Q3 2

002

Q4 2

002

Q1 2

003

Q2 2

003

Q3 2

003

Q4 2

003

Q1 2

004

Q2 2

004

Q3 2

004

Units

Dollars

Units: +3.3%Dollars: +13.0%

Video Quarterly TrendsVideo Quarterly TrendsYear-Over-Year Changes

-30%

-20%

-10%

0%

10%

20%

30%

Q1 2

001

Q2 2

001

Q3 2

001

Q4 2

001

Q1 2

002

Q2 2

002

Q3 2

002

Q4 2

002

Q1 2

003

Q2 2

003

Q3 2

003

Q4 2

003

Q1 2

004

Q2 2

004

Q3 2

004

Units

Dollars

Units: +1.0%Dollars: +9.8%

Trend #2Trend #2

A Product Explosion

2004 Fastest Growing 2004 Fastest Growing ProductsProducts

(Based on Shipment Revenues)(Based on Shipment Revenues)1. Blank DVD Media 211.7%2. LCD TV 204.5%3. Digital Video Recorders 203.9%4. Portable MP3 Players 184.0%5. SDARS Tuners and Accessories 145.1%6. 5.8Mhz Cordless Phones 144.8%7. Flash Media 127.6%8. Plasma TV 58.4%9. Digital Direct-view and RPTV 40.2%10.Mobile Video and Navigation 34.8%

Trend #3Trend #3

It’s All About the (Flat) Display

Digital FPD ShipmentsDigital FPD ShipmentsThousands of Units

0

2,000

4,000

6,000

2001 2002 2003 2004 2005

LCD TV

Plasma TV

Digital FPD RevenuesDigital FPD RevenuesBillions of Wholesale Dollars

$0

$2

$4

$6

$8

2001 2002 2003 2004 2005

LCD TV

Plasma TV

DMD PerformanceDMD PerformanceLCOS, LCD, DLP Rear-ProjectionLCOS, LCD, DLP Rear-Projection

Estimated Factory Sales

Thousands of Units

367

1,1481,433

1,719

2,2382,464

2003 2004 2005 2006 2007 2008

35% of RPTV

Shipments

TV Market CompositionTV Market CompositionMillions of Unit TV Shipments

0

10

20

30

40

1998 1999 2000 2001 2002 2003 2004 2005

FlatProjectionDV CRT

TV Revenue TV Revenue ContributionsContributions

Billions of Factory Dollars

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005

FlatProjectionDV CRT

Trend #4Trend #4

Content ExplosionAnd the Need for Storage

Digital Imaging GrowthDigital Imaging GrowthFactory to U.S. Dealer Sales

Millions of Units

0

6

12

18

24

30

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Cameras Camcorders

Average Image Average Image LibrariesLibraries

Now

Photos: 3,420

Storage:7.2 GB

In 5 Years

Photos: 600

Storage:1.26 GB

Blank DVD MediaBlank DVD MediaU.S. Shipment Revenues

Millions of Dollars

$261

$435$502 $519

$560 $535

2003 2004 2005 2006 2007 2008

Flash Media GrowthFlash Media GrowthU.S. Shipment Revenues

Millions of Dollars

$456 $643 $910$1,346

$3,064

$5,975

2000 2001 2002 2003 2004 2005

Digital Recording Digital Recording OptionsOptions

Unit Shipments in Thousands

151

550877

1841

249 336170

519

2,359

3,361

2000 2001 2002 2003 2004 2005

DVD Recorders

DVR

Trend #5Trend #5

Content On the Move

Portable MP3 GrowthPortable MP3 GrowthFlash and HD-BasedFlash and HD-Based

Thousands of Unit Shipments

510 7241,737

3,031

6,952

8,609

2000 2001 2002 2003 2004 2005

Satellite RadioSatellite RadioTuners and AccessoriesTuners and Accessories

Thousand of Unit Shipments

145 375

1,170

3,339

4,812

2001 2002 2003 2004 2005

Mobile Video Gaining Mobile Video Gaining VolumeVolume

Dollar Shipments in Millions

$386$436

$586 $580

$782

$935

2000 2001 2002 2003 2004 2005

* Includes mobile video displays, stand-alone DVD players, and DVD changers

The Rise of MRAVThe Rise of MRAV

2004 Shipment VolumesThrough November 2004

Units:

3.8 million

Revenues:

$340 million

Based upon CEA’s MARA Shipment Data

Audio Server GrowthAudio Server GrowthMonthly Unit Shipments

Sept. 2003 to Nov. 2004

0

500

1000

1500

2000

2500

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov

13.699 YTD

DMS Purchase PlansDMS Purchase PlansWhen Plan to Purchase a DMS

9%20%

10%

58%

Within 1 year 1 to 5 years

from now

Never Don't Know

(Base: U.S. Online Adults)

ClosingClosing

• 2005 International CES set records– 142,585 attendees (pre-audit)– 2,550 exhibitors– 1.531 million net square feet exhibit

space

• It’s great to be in CE

Questions?

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