Mobile Market Opportunities

in Americas

Kimmo Aura, Regional

Sales Manager Americas

Agenda

• What’s hot, what’s not in Silicon Valley

• Internet, Mobile and Cloud in Brazil

• Mobile sector in Mexico

• Cloud in Colombia

• Social networking in Chile

• ICT in Argentina

• Summary

16/11/2012 © Finpro 2

Silicon Valley, Mobile Dominance

Source: Apple Source: Android

16/11/2012 © Finpro 3

Mobile OS Market Share – North America

Source: StatCounter 16/11/2012 © Finpro 4

Who let the dogs out?

• The mobile ecosystem is in the turmoil – there is a huge

fragmentation both in the platforms and in the

distribution (of apps and content).

• First came iPhone. Then app stores (started with

Apple/iTunes) changed the mobile landscape - it’s

about the service, applications, user experience and UI.

• Google driving Android with multiple phone vendors has

changed the mobile ecosystem even more.

• Operators are back in business.

• Add ‘Social’ to the mix.

• And then add ‘Cloud’ to the mix.

• And then add ‘Tablet’ to the mix.

16/11/2012 © Finpro 5

What’s driving us?

• Re-invention of Media: ‘Participatory & Social Media” – e.g. Gaming

• GAMIFICATION

• Media as interactive experience vs. packaged, static ‘content’ (GuitarHero)

• Formalization of key human behaviors & addictions

• Alternative Biz models: freemium, free-to-play + microtransactions, virtual currencies

• User-interface breakthroughs Tim Chang, NVP 16/11/2012 © Finpro 6

Overall situation in US Cloud Industry

• Mature technical infrastructure available

• Several dominant players (Amazon, Force.com, Google)

• Cloud computing is a normal practice to implement www-solutions, especially in web2.0

• Lot of cloud-related start-ups

• Emphasis on supporting and using the cloud, not on cloud computing infrastructure

• Typical startup has $1M-$8M seed or A-round funding

• Many ”traditional” companies will move to cloud

• SAP, IBM, NSN, etc.

• But not Oracle (officially)

16/11/2012 © Finpro 7

Hot topics and thoughts …

• Mobile everything

• Operators

• Mobile Business Processes

• Consumerazing IT

• Social - New Social

• Tablets

• Gaming - mobile

• Gaming as mainstream media

• Gamification

• Edutainment

• Virtual goods/microtransactions

• Digital livingroom, next screen, Smart TV

• Media

• Big Data, Data Analysis 2.0 (dynamic, real time)

• Social / mobile healthcare

• Addressbook ownership

• Search / discovery

• Cloud Computing

Source: Mediaspin.com

By various ‘thinkers’

16/11/2012 © Finpro 8

VC $$$ Silicon Valley in 2Q 2012

Venture funding in early stage deals -- which has lagged over the past

year as VCs put more money into mature startups closer to going public --

reached the highest quarterly total since early 2001.

Venture firms pumped $2.1 billion into 410 young companies in the latest

quarter, double-digit increases from the prior three months.

Software, Digital Media and Internet companies continued to be popular,

while life sciences and cleantech declined.

Around 375 VC companies in SV

16/11/2012 © Finpro 9

Silicon Valley Journey

16/11/2012

Over 80 experienced entrepreneurs, executives

and experts were interviewed on the subjects

relating to this book.

The shared knowledge will hopefully help new

startups and entrepreneurs who are planning to

take their ideas and companies to Silicon Valley –

as well as those who have already started their

journey. The valuable insights and experiences will

contribute and assist in the navigation through the

various challenges. Being better prepared for your

journey can save you money and time, and reduce

frustration.

The book is organized into chapters by themes. It

follows that the stories are not chronological; rather,

a story of a company is told in snippets in several

chapters. The intent was that the book can be read

as a handbook, which means that the reader is

welcome to start at any chapter that she or he finds

most relevant.

Free to download!

or search for ’silicon valley journey’ www.tekes.fi

© Finpro 10

Internet Users in Latin America (6/2011)

16/11/2012 © Finpro

11

Inte

rnet u

sers

per c

ou

ntry

Facts about Brazil

16/11/2012

• Brazil is a part of Mercosur (= Argentina, Brazil, Paraguay and Uruguay) and

has negotiations with EU about free trade agreements.

• Taxation with Finland: Tax sparing ends and internal rates are applied to

dividend, interest and royalty.

• Brazil is not a member of OECD.

Source: Brazil Global Net, Inflation.eu, IBGE, OECD, Finnish Minstry of Finance, European Commission

© Finpro 12

Use of Internet in Brazil

• In September 2012 there were

83 million internet users. It

makes Brazil the 5th most

connected country.

• Broadband users (> 2Mbps) in

July 2012 were 16,8 million,

growth of 91% compared to the

previous year.

• Brazilians spend 69 hours per

month in internet (July 2011).

• 70 % of children aged between 9

and 16 years have accounts in

social networks (July 2012).

• The most popular social

network sites in Brazil in 2012

are: 1. Facebook, 2. Twitter, 3.

Orkut, 4. LinkedIn, 5. Tumblr

• Shopping online is increasing fast.

Currently 29 % of internet users

buy online - in 2011 the amount

spent was BRL 18,7 bn (~USD 9,3

bn).

• Most of public sector purchasing

through governmental internet

portal.

16/11/2012 © Finpro 13

Mobile sector Brazil

• In September 2012 Brazil had 259 million mobile phone connections (penetration of 132%).

• Prepaid connections’ share was 81,2%.

• Of the 83 million internet connections, 63,6 million are mobile internet connections and 19,4 million fixed.

• 4G network has to be operational in 2014 World Cup host cities by the end of 2013.

• According to the ITU’s

Measuring the Information

Society 2012 study, Brazil was

world’s second most dynamic

telecom country in 2011, and

fourth largest telecom market

in terms of revenue in 2010

(preceded only by USA, Japan

and China)

16/11/2012

Source: Teleco

© Finpro 14

Cloud computing in Brazil

• The Brazilian cloud based market is estimated to be 500 million

R$ by the year 2014 (192 M€)

• Most of the billing models in cloud based services are based on

fixed monthly fees as opposed to pay-by-use

• Media, content and event management platforms for various

actors in the upcoming football and Olympic games. Talks of

investments have already been seen on these areas.

• In the August 2012 the government announced an investment of

40 million R$ to cloud computing during the next 3 years

16/11/2012 © Finpro 15

Internet users in Latin America

There were an estimated 212,401,030 internet users in Latin America (representing

about 36.7% of the region population),according to statistics updated June 2011 by

Internet World Stats.

• Latin America top countries, as per June 2011:

– 1. Brazil: 75,982,000 (37.4% of the population in the country)

– 2. Mexico: 34,900,000 (30.7%)

– 3. Argentina: 27,568,000 (66.0%)

– 4. Colombia: 22,538,000 (50.4%)

– 5. Venezuela: 10,421,557 (37.7%)

– 6. Chile: 9,254,423 (54.8%)

• Internet user share in Latin America, by country, 2009-2013 (% of total):

• - 2009: Brazil (38%) / Mexico (17%) / Argentina (9%) / Other (36%)

• - 2010: Brazil (37%) / Mexico (18%) / Argentina (10%) / Other (36%)

• - 2011: Brazil (36%) / Mexico (19%) / Argentina (10%) / Other (36%)

• - 2012: Brazil (35%) / Mexico (19%) / Argentina (10%) / Other (36%) (estimated)

• - 2013: Brazil (35%) / Mexico (20%) / Argentina (10%) / Other (36%) (estimated)

16/11/2012 © Finpro 16

Facts about Mexico as a market place

16/11/2012

• Network of free trade agreements

> 45 countries

• Competitive and young labor force

• 11th largest economy in the world

• GDP per capita, 15,000 USD per

year one of the highest in Latin

America

• Home of America Movil, 3rd

largest mobile operator in the

world

• 112 million consumer market

• Rank #53 in Ease of Doing Business

(easiest in Latin America)

• Investment grade & IP protection

agreements

• Stable economy and political

environment

• Efficient hub from a transport and

logistics standpoint

© Finpro 17

Mexico’s mobile sector

• The mobile sector remains one of the main drivers of telecom industry growth.

Driven by a booming GSM sector, Mexico’s mobile industry grew at

approximately 17% per annum, achieving more than 80% penetration by early

2010.

• Broadband is the other principal driver of growth in Mexico’s telecommunications

market. Both cable modem and ADSL continued to enjoy strong subscriber growth

in 2009 at a combined average growth rate of around 35%.

• Forecast mobile subscribers and penetration rate – lower growth scenario –

2011 – 2016

(Source: BuddeComm, forecasts)

Year Subscribers

(million) Penetration

2010

(BYE) 90 80%

2011 96 85%

2012 102 89%

2013 107 93%

2014 111 95%

2015 115 97%

2016 117 98%

16/11/2012 © Finpro 18

Social networking in Mexico

• Social networking in Mexico will increase by 17.9% in 2012,

making it the fifth-fastest-growing market worldwide,

according to eMarketer estimates. Much of this expansion will

come from Facebook, which is expected to reach 25.6 million

users in the country by the end of 2012.

• Top five social networking countries, ranked by growth, 2012:

• 1. India: +51.7% change in number of users

• 2. Indonesia: +51.6%

• 3. China: +19.9%

• 4. Mexico: +17.9%

• 5. Brazil: +14.4%

Source: (emarkets) 16/11/2012 © Finpro 19

Mobile banking in Mexico

• Despite a relatively well organized banking sector, banking

penetration remains low compared to mobile penetration.

• Mobile payments transformation, led by alliances between

telcos, banks and device manufacturers .

– Latin American operator group América Móvil is launching a

mobile money service in Mexico, aimed to serve the nation’s

underbanked population. The service, called Transfer, will be

launched by a joint venture between the operator and its banking

partners: Citibank´s Mexican unit Banamex and local bank

Banco Inbursa.

– Movistar has partnership with MasterCard in Latin America to

provide mobile banking solution

16/11/2012 © Finpro 20

Facts about Colombia

• Colombia is ranked as the 42nd easiest country to do business in (Ease of Doing Business 2012)

• Colombia is the leader in Latin America in investor protection (5th rank in the world)

• Colombia is one of the few Latin American countries with a Ministry for Information and Communication Technology (Mintic)

• Colombia is an open market with Free Trade Agreements with more than 50 countries.

• Colombia has a signed Free Trade Agreement with the European Union coming into force in 2012

16/11/2012

Source: Proexport, World Bank Ease of Doing Business, Ministry for Information and Communication Technology (Mintic)

© Finpro 21

Use of Internet in Colombia

• There are a total of 6 million

internet subscribers. Internet

subscribers expected to reach 10

million in 2014 (63.9% fixed

subscribers and 36.1% 3G

connections)

• There are 25 million internet users

(Population in Colombia 46 million)

• Government launched ”Live

Digitally” project, massifying

Internet

• 96% of municipalities Colombia

will have fiber optic connection

and high speed internet by

2014, an investment of 635

MUSD (One of the most

ambitious internet projects in

Latin America)

• Colombians spend 7.6 hours week

on social networking

• Colombia’s IT spending increases

almost 15% yearly

• Shopping online is increasing.

47% of internet users in Colombia

have made purchases online, and

84% of persons that visited e-

commerce sites made a purchase

• 16 million Colombians use

Facebook

• Most of public sector purchasing

through governmental internet

portal.

• Colombia was ranked 1st in E-

government services in Latin

America in 2011 (world rank 31)

Source: Everis, Proexport, TIC ministry

16/11/2012 © Finpro 22

• Mobile phone penetration is

103 % in Colombia

• Many operators use

Colombia as a test market for

new applications and

products

• 25% of new telephone

purchases are smart phones in

Colombia in 2012

• Number portability has been

possible since June 2012.

Mobile sector Colombia

Mobile operators and users

Source: MasterCard Mobile Payments Readiness Index (MPRI),

Colombia is the 2nd biggest country in

Latin America for mobile payments after

Brazil 21% of consumers are ready to pay

purchases with mobile phone

26% of mobile purchases are done

through a mobile phone and 21% of

purchases in point of sales are done

with a mobile phone

16/11/2012 © Finpro 23

Cloud computing in Colombia

• Cloud computing business in Latin America has been estimated to

be worth of 280 million USD in 2012. [IDC, International Data

Corperation]

• In Colombia 62% of the 800 largest companies are already using

cloud computing services for collaboration and correspondence,

CRM, talent management and infrastructure

• 97% of the most important companies in Colombia believe that

cloud computing is the future trend in Colombia

• Colombian company Eforcers S.A, was ranked 1st in Latin America

in cloud computing services by Talkin Cloud

Source: Study by Avanxo y Position Comunicaciones of 800 most important companies in Colombia

16/11/2012 © Finpro 24

Facts about Chile

• Chile is Latin America’s most developed, stable and

competitive country.

•It is ranked as the 37 easiest country to do business in

(Doing Business 2013)

• Chile is an open market with Free Trade Agreements

with 58 countries.

•Chile has a Free Trade Agreement also with EU

countries.

• Chile is member of OECD, since 2010.

Source: IMF, FIC, CIA World Factbook,

Doing Business

2011

Population (million) 17,2

GDP Nominal (Billion USD) 248.602

GDP PPP /cap (USD) 17 380

Annual Growth 6,5 %

Foreign Direct Investment

(BillionUSD) 17,5

Imports (BillionUSD) 72,3

Exports (BillionUSD) 86,3

Inflation rate 3,3 %

16/11/2012 © Finpro 25

Use of Internet in Chile

• There are a total of 10 million internet

users of which 4 million are mobile

internet users. (Population in Chile

17,2 million)

• 32% of the population owns notebook

or netbook in Chile, which is one of the

countries with the highest percentage.

• Chileans are connected to the Internet

an average of 19 hours per week.

• Shopping online is increasing. 71%

of internet users in the country have

made purchases online, and the

volume of transactions is expected to

rise by by 18% to 1700 million USD.

• Most of the large banks, such as

Banco de Chile and Banco Estado,

provide online banking services.

– There is one totally virtual bank,

Tbank, in Chile, offering all its

services through internet.

• Most of public sector purchasing

through governmental internet portal.

16/11/2012 © Finpro 26

Social networking in Chile

• In Chile a 63 % of the

interviewed persons belong

to a social network

according to Ericsson

ConsumerLab survey 2012

• Chileans spend one third of

their browsing time on

social networking pages.

• Chilean users spend 8,2

hours/ month on this type of

pages.

16/11/2012 © Finpro 27

• In 2011, the investments in the

telecommunications sector in Chile

grew by a 25% in comparison to

the previous period adding up to a

2 400 million USD.

• Number portability has been

possible since 2012.

• “40 % of Chileans are connected to

the Internet through their

smartphones.” This is estimation of

the Ericsson ConsumerLab study in

2012.

• Now every fourth mobile phone is a

smartphone. 50% of the

interviewed are planning to buy a

smartphone when buying a new

mobile device.

Mobile sector Chile

Mobile Internet sector market share

June 2012

Source: Subtel 2012 16/11/2012 © Finpro 28

Cloud computing in Chile

• Cloud computing business in Latin America has been estimated to be worth of 280 million USD in 2012. [IDC, International Data Corperation]

• Investments in cloud computing are estimated to reach a 100 million USD in Chile in 2012.

• It is estimated that 40% of the Chilean companies will use cloud service by year 2015. This including public, private and hybrid clouds.

• Chile is considered to be one Latin American country that has adopted Cloud computing services in large and medium sized companies. [SONDA]

Source: Microsoft

16/11/2012 © Finpro 29

Argentina

16/11/2012

Argentina is one of the five largest economies in South

America.

Argentina's macroeconomic performance in recent years

has been strong.

Consecutive years of rapid and pro-poor economic growth

enabled poverty and unemployment to be cut to levels

experienced prior to the country's 2001-2002 economic crisis.

Economic activity grew about 9 % last year. This growth has

been spurred by private consumption and investments.

© Finpro 30

ICT Sector

16/11/2012

• Argentina is the second largest IT market in the region.

• Argentina's IT market is forecast to increase to US$5.0bn in 2012, up by around 9%

since last year.

• Computer hardware sales: US$2.4bn in 2011 to US$2.5bn in 2012, +6%.

• Software sales: US$539mn in 2011 to US$591mn in 2012, +10% .

• IT Services sales: US$1.6bn in 2011 to US$1.8bn in 2012, +12%.

Key Trends & Developments

• There is growing interest in cloud computing.

• IT services revenue is expected to grow faster than the market as a whole, with

organisation looking for help to implement cloud computing.

• Educational; government's three-year programme to deliver 3 Million PCs to public

schools over the 2010-2012 period.

© Finpro 31

Cloud Computing in Argentina

16/11/2012

• Cloud Security Alliance Argentina; the results of survey of 100 IT specialist that

recognize that the trend is to move to the cloud.

• 76% said that their company was still not ready to migrate to the cloud.

• 71% said that they do still not trust in their suppliers for the implementation.

• Dirvers for choosing Cloud Computing;

• 22% cost savings.

• 21% better availability .

• 19% for making easier processes.

• 14% for standarization.

• Main barriers for choosing cloud computing;

• Security issues.

• Confidentiality

© Finpro 32

Use of Internet in Argentina

16/11/2012

Main categories

Avg time consumed per age range.

Hours per visitor.

© Finpro 33

Argentine SMARTPHONES

16/11/2012

• 41 Million active mobile phone lines.

• 10 Million Argentines, or 25% of the population, already have his/her smartphone.

• 25% prefer to keep the smartphones before the TV.

• 70% of the users do not leave the house without the phone.

• 70% access everyday to Internet.

• 90% use the smartphone even when staying at their homes.

• 74%, use them while walking , 64%. In the

public transport.

• 20% admitted to have changed his/her mind,

about a product, already in the shop, after

checking information through the smartphone.

• 73% use phone for checking mails, and social

networks and 45% for shared video.

• 71% of internet users are Online buyers. Source. El cronista based in Google report.

© Finpro 34

Social Networks and Internet mobile

16/11/2012

• Persentage of users accessing through mobile phones;

Facebook: 19 million users - 37%

Twitter: 7 million users. - 47%

• Traffic from mobile devices in internet correspond

77% to mobile phones and 18% to Tablets.

• Android system was the most used mobile

plataform (56.3% visits web pages).

• Tablets access to internet is lead by iPad (78.3%

visited web pages). Vía comScore.

Source: Carrier y Asociados:

© Finpro 35

Operating systems

16/11/2012

% Share visited Web pages

Mobile

phone.

Tablets

Android 56.3% 19.5%

iOS 10.7% 78.3%

Symbian 10.6% N/A

RIM 4.3% 2.2%

Windows Mobile 0.6% N/A

Other 17.6% N/A

Note: due to local import restrictions, it is not alowed to import cell phone manufactured

abroad, for that reason Apple is not present in the phone market.

System share in Mobile phones & Tablets March 2012 Source: comScore Device Essentials

© Finpro 36

Summary

USA • Mobile everything

• Mobile Business Processes

• Consumerazing IT

• Social - New Social

• Gaming - mobile

• Gaming as mainstream media

• Gamification

• Edutainment

• Virtual goods/microtransactions

• Digital livingroom, next screen, Smart TV

• Big Data, Data Analysis 2.0 (dynamic, real time)

• Social / mobile healthcare

• Addressbook ownership

• Search / discovery

• Cloud Computing

Latin America

• Mature operator business in

most countries

• Growing Internet usage

• Mostly mobile internet

• Cloud offers jobs

• Mobile banking solutions

coming

• Good test market for mobile

apps or services

16/11/2012 © Finpro 37

Contact Information

Kimmo Aura

– Regional Sales Manager, Americas

kimmo.aura@finpro.fi, +358 40 504 8317

Special thanks to:

– Silicon Valley, USA : pekka.parnanen@finpro.fi

– Mexico: nina.jaakkola@finpro.fi

– Brazil: pekka.horttanainen@finpro.fi

– Chile: heta.pyhalahti@finpro.fi

– Colombia: heidi.virta@finpro.fi

– Argentina: ilkka.cafferata@finpro.fi

16/11/2012

© Finpro 38

Thank you!