Driving Market Growth in South East Asia

Transcription

1 Driving Market Growth in South East Asia Uday Marty Managing Director, Intel South East Asia

2 Then & Now 198 s 212

3 SEA Growth & Opportunity POPULATION : SEA ' MILLION SEA ' MILLION SEA '11 Real GDP $ 1.2 trillion '11 $1.5 trillion '15 1% Viet, 9 Viet, 92 8% Urban Population 51% in 11; 54% in 15 Viet, $79 Viet, $12 Thai, 69 Sing, 5 Thai, 71 Sing, 5 6% 4% Urban Pop % Thai, $212 Sing, $179 Thai, $255 Sing, $212 Phil, 95 Phil, 11 2% Indonesia Singapore Malaysia Thailand Philippines Vietnam Phil, $136 Phil, $164 MY 28 MY Malay, $179 Malay, $215 Indo, 233 Indo, 252 Indo, $42 Indo, $51 Source: Global Insight October 212

4 South East Asia Audience MOBILE INTERNET GROWTH Basic (sub-$3) Smart Phones Affordable broadband bundles Social mobile apps Highly-social, hyper-local communities SOME KEY TRENDS IN THE SEA YOUTH MARKET CONTENT CREATION BOOM HOLLYWOOD & ASIAN POP INFLUENCES IMPROVING ACCESS TO CREDIT EST. TOTAL POPULATION 532 M 55% EST. UNDER 34 YEARS OLD 15M EST. INTERNET POPULATION 75M EST. ONLINE GAMING POP O N L I N E & M O B I L E 6% USERS WHO WATCH ONLINE VIDEOS 87M+ EST. FACEBOOK ACCOUNTS E N V I R O N M E N T 7% 1M+ WHO ACCESS IN FANS OF INTEL SEA INTERNET CAFES FACEBOOK PAGES 8M+ EST. MOBILE INTERNET USERS 14M EST. TWITTER USERS

5 Untapped Potential in Urban SEA Markets Among all urban HH NOT owning PC PC TABLET SMARTPHONE Desire of devices Purchase Intention of devices INDO PH VN TH MAL Source: Intel Extended Brand Tracking Q2 12

6 Device Ownership and Interplay Emerging Markets Device ownership and interplay Emerging Markets Devices owned / used India Indonesia Malaysia Philippines Thailand Vietnam 52% 38% 16% 37% 21% 25% Singular 1% % 2% 2% % 1% 34% 34% 38% 27% 53% 51% 2 devices + 12% 26% 29% 22% 22% 18% + % 1% 3% % 1% 1% 3 devices + + % 1% 7% 9% 2% 3% B1. Device ownership Base: Respondents who own either a smartphone / laptop / tablet Emerging markets 35 India 181 Indonesia 73 Malaysia 34 Philippines 355 Thailand 292 Vietnam 27 Source: Mobile Life 212 APAC Regional Summary Report

7 Laptop Shows the Strongest Category Growth First time buyer intention Emerging APAC markets Desktop Tablet Laptop Emerging Markets India Indonesia Malaysia Philippines Thailand Vietnam B1. Device ownership FTB (non current device owners but device intenders) Base: All respondents Emerging markets 9465 India 466 Indonesia 1359 Malaysia 52 Philippines 418 Thailand 958 Vietnam 431 Source: Mobile Intel Mobile Life 212 Life 212 APAC APAC Regional Regional Summary Summary Report Report

8 Education and Learning Skills are Key Drivers Among those intending to own 1 PC and will be the first PC at home INDO VN MAL PH TH For children s education Learn and improve To complete school Surf the net To do official work at Entertainment Communicate through Numbers in % Base: Intending to own 1 st PC - Indonesia (n= 392), Vietnam (n= 298), Malaysia (n= 129), Philippines (n= 154), Thailand (n= 281); Intending to purchase an additional PC/ replacement Indonesia (n= 235), Vietnam (n= 154), Malaysia (n= 15), Philippines (n= 152), Thailand (n= 254) Source: Intel Extended Brand Tracking Q2 12

9 Affordability is the Main Barrier to PC Purchase INDO VN MAL PH TH PC is not affordable No need to access the Internet PC is too complicated for us to use Already have access to a PC at other places Planning to buy a Smartphone instead Already have a Smartphone Don't need it 1 My children do not need it currently 1 Numbers in % Planning to buy a Tablet Already have a Tablet 1 Base: All Non-PC owners non-pc intenders - Indonesia (n=435), Vietnam (n=111), Malaysia (n=98), Philippines (n=276), Thailand (n=13) Source: Intel Extended Brand Tracking Q2 12

10 PENETRATION RATE Weeks of Income to Purchase a PC Decreasing 5 PENETRATION RAPIDLY INCREASES WHEN A PC CAN BE BOUGHT WITH <1 WEEKS OF INCOME VIET 15 1 THAI SING MAL PHIL INDO Weeks of Income to purchase a Consumer PC Singapore Indonesia Thailand Malaysia Philippines Vietnam 5 1% 8% 6% 4% 2% % Avg Total PC+BB solution Cost (Atom, 4 yrs.) BB VAT 66% of TCO 13% PC VAT 4% PC Interest 4% Entry PC Price 26% 53% BB Price Source: Intel Market Sizing & Forecasting Q2 12 APAC TAM Highlights Sources: Euro monitor, CIA Fact book, ITU, Intel

11 CAPITALIZING ON THE OPPORTUNITY LONDON ANALYST SUMMIT Fall LONDON 212 ANALYST SUMMIT Fall 212

12 Lowering Broadband Connections Cost Case Study: Vietnam PCs and broadband for underserved communities Vietnam Universal Service Fund (VTF) will subsidize $75 for 2ku PC in rural areas. VTF will subsidize $27 per new broadband subscriber. $75 Million Budget has been approved.

13 SEA Education Market Size 1.4M Pre-Primary Students 1.7M Higher Ed Teachers 6.3M K12 Teachers 41.4M Secondary Students >131 M People in Education 58.2 M Primary Students.8M Higher Ed Administrators 12.4M Higher Ed Students Source: Intel Internal Estimates

14 Education Transformation 1M teachers globally 53, teachers in 6 SEA countries 7 million Intel powered CMPCs globally Education Transformation Policy Research & Evaluation Curriculum & Assessment Professional Development ICT 5+ alliance members

15 Expand the available market Market with prevalent media & localized messaging Engaging & Connecting Help consumers choose Deliver products that matter (with) Consumers

16 Engaging & Connecting (with) Consumers Expand the available market Affordability 2nd year of sustained investments 1K+ kilometers travelled 3+ roadshows & events; 2M+ Southeast Asian consumers reached in Financing & TCO reduction (up to 6%) Marketing Content Access

17 SEA Social Reach Total Fan Count 1,41,178 Total Fan Growth in ,689 Ultrabook Pop-up UB Temptations/ UB Project/ Sound Trippin 2NE1 Be Mine + Computex Me the Musical + Ultrabook City + Catch & Win Friends of Friends 184,77,43 CES Average Daily Reach 165,839 Overall Growth First Million Fans 18 months Second Million Trending to 6 months ource: Pagelevber & Sysomos

18 Engaging & Connecting (with) Consumers Localize Messaging Reaching high notes through Sing with Your PC, Jogja Hiphop, Sing to Win & GG Batik Fractal: Nancy s Story Turning a national treasure to digital pleasure

19 Engaging & Connecting (with) Consumers Helping Consumers Choose Focus on: Trained retail sales people helping consumers choose Segmented stores with promotions, choice and tradeoffs

20 SEA growth trends and demographics are upbeat Intel are trusted advisors on education & ICT use We are committed to engaging consumers locally We have a wide portfolio of products & solutions to meet consumer demand Intel is well positioned to maximize opportunities

21 Risk Factors The above statements and any others in this document that refer to plans and expectations for the second quarter, the year and the future are forward-looking statements that involve a number of risks and uncertainties. Words such as anticipates, expects, intends, plans, believes, seeks, estimates, may, will, should and their variations identify forward-looking statements. Statements that refer to or are based on projections, uncertain events or assumptions also identify forward-looking statements. Many factors could affect Intel s actual results, and variances from Intel s current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. Intel presently considers the following to be the important factors that could cause actual results to differ materially from the company s expectations. Demand could be different from Intel's expectations due to factors including changes in business and economic conditions, including supply constraints and other disruptions affecting customers; customer acceptance of Intel s and competitors products; changes in customer order patterns including order cancellations; and changes in the level of inventory at customers. Uncertainty in global economic and financial conditions poses a risk that consumers and businesses may defer purchases in response to negative financial events, which could negatively affect product demand and other related matters. Intel operates in intensely competitive industries that are characterized by a high percentage of costs that are fixed or difficult to reduce in the short term and product demand that is highly variable and difficult to forecast. Revenue and the gross margin percentage are affected by the timing of Intel product introductions and the demand for and market acceptance of Intel's products; actions taken by Intel's competitors, including product offerings and introductions, marketing programs and pricing pressures and Intel s response to such actions; and Intel s ability to respond quickly to technological developments and to incorporate new features into its products. Intel is in the process of transitioning to its next generation of products on 22nm process technology, and there could be execution and timing issues associated with these changes, including products defects and errata and lower than anticipated manufacturing yields. The gross margin percentage could vary significantly from expectations based on capacity utilization; variations in inventory valuation, including variations related to the timing of qualifying products for sale; changes in revenue levels; segment product mix; the timing and execution of the manufacturing ramp and associated costs; start-up costs; excess or obsolete inventory; changes in unit costs; defects or disruptions in the supply of materials or resources; product manufacturing quality/yields; and impairments of long-lived assets, including manufacturing, assembly/test and intangible assets. The tax rate expectation is based on current tax law and current expected income. The tax rate may be affected by the jurisdictions in which profits are determined to be earned and taxed; changes in the estimates of credits, benefits and deductions; the resolution of issues arising from tax audits with various tax authorities, including payment of interest and penalties; and the ability to realize deferred tax assets. Gains or losses from equity securities and interest and other could vary from expectations depending on gains or losses on the sale, exchange, change in the fair value or impairments of debt and equity investments; interest rates; cash balances; and changes in fair value of derivative instruments. The majority of Intel s non-marketable equity investment portfolio balance is concentrated in companies in the flash memory market segment, and declines in this market segment or changes in management s plans with respect to Intel s investments in this market segment could result in significant impairment charges, impacting restructuring charges as well as gains/losses on equity investments and interest and other. Intel's results could be affected by adverse economic, social, political and physical/infrastructure conditions in countries where Intel, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. Expenses, particularly certain marketing and compensation expenses, as well as restructuring and asset impairment charges, vary depending on the level of demand for Intel's products and the level of revenue and profits. Intel s results could be affected by the timing of closing of acquisitions and divestitures. Intel's results could be affected by adverse effects associated with product defects and errata (deviations from published specifications), and by litigation or regulatory matters involving intellectual property, stockholder, consumer, antitrust, disclosure and other issues, such as the litigation and regulatory matters described in Intel's SEC reports. An unfavorable ruling could include monetary damages or an injunction prohibiting Intel from manufacturing or selling one or more products, precluding particular business practices, impacting Intel s ability to design its products, or requiring other remedies such as compulsory licensing of LONDON ANALYST SUMMIT FallForm 212 intellectual property. A detailed discussion of these and other factors that could affect Intel s results is included in Intel s SEC filings, including the company s most recent 1-Q, Form 1-K and earnings release.

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