The Mobile Internet Report Key Themes*

iPhone Price Cut to $99 Would Eliminate #2 Adoption Barrier –
#1 / #3 Barriers = High Monthly Fee + AT&T Exclusivity in USA
Factors Preventing US Consumers from Purchasing iPhone, MS Survey, 11/08
55% of survey respondents cited high cost of monthly plan as a barrier for iPhone adoption
% of Respondents Citing
Each Adoption Barriers (%)
60%
50%
40%
30%
20%
10%
55%
53%
41%
Already addressed as Apple cut iPhone
3G (8GB) price to $99 w/ contract in 6/09
30% indicated that AT&T was the sole
reason for not adopting iPhone in USA;
We note that this adoption barrier is
likely to be a US phenomenon for longer
than in W. Europe*
20%
15%
9%
7% 7%
4%
0%
Cost of Monthly Plan
Cost of Device
Exclusivity of Carrier
Battery Life
Virtual Keyboard
Limited Memory
Limited Enterprise Email
Low MegaPixel Camera
All Other
Note: Morgan Stanley surveyed 2,500 U.S. consumers, result here taken from 1,065 respondents who indicated some levels of
interests in iPhone. All other factors include negative press coverage and personal recommendations. * in the US, there are only
two GSM / WCDMA networks (AT&T + T-Mobile), but in Europe there are on average four GSM / WCDMA networks.
213
Source: Katy Huberty, Nick Delfas, Morgan Stanley Research.