Argument for Acceleration

Of the Global Overview for the SP1N Development Effort

(by approximately 6-8 weeks)

Key Assumptions

• Both Fiori and Spinoza are dedicated to the fruitful development of the SP1N system

• Both companies wish to reduce risk as far as is practical in this effort

• The two main (and opposing) risks to this effort are:

1. Developing a system that does not meet the user’s needs;

2. Developing a system too late to meet a market window.

Addressing Risk 1

Spinoza recognizes that Fiori’s phased approach to the SP1N system’s development

and the time intervals specified for the completion of each phase will adequately

mitigate the risk of developing a poor system.

Therefore, Spinoza accepts both these phases and time intervals.

Addressing Risk 2

Spinoza recognizes that the convergence technology space is rapidly being filled, and

that reducing time to market is therefore critical to the success of the SP1N system.

Spinoza further recognizes that eliminating or abbreviating either the phases or time

intervals specified by Fiori is unacceptable.

Addressing Risk 2, Cont.

Spinoza believes that it has largely generated the deliverables specified by Fiori as those

which are produced during Phase 0 and Phase 1 activities. Therefore, since the time

intervals for these phases total approximately 6-8 weeks, Spinoza believes

that our joint timeline can be reduced by this amount.

To prove its case, Spinoza must:

• Come to agreement with Fiori about which deliverables are generated by Phases 0 & 1;

• Understand the particular information Fiori expects each deliverable to contain;

• Furnish that information to Fiori;

• Where necessary, document how this information was generated.

Timeline and Deliverables

Project Definition and Research

Prior research, Vision, Technical BackgroundIdentify Key Gaps, Assumptions, and potential trouble areasUnderstand current value proposition

Continued Detail Research

Usage Models, applications, environments, user needs and benefitsDefine User Segments vs Demographic ProfilesCompetitors, Secondary User Competition (Portable Media Devices)Develop Product Line Strategies and FoundationsTechnology Trends, Product Culture, OEM Strategies

Conceptualization

Form Factor ExplorationErgonomicsUser Interface Conceptualization

Prior Research

• The commissioning of two white papers which dealt with wireless transmission of HTML and multimedia information.

• a brainstorming session with a class of MBA students to create and market a SP1N-like device.

• a cooperative program with several Seattle University students to explore the wireless capability of portable devices.

• The development of (provisionally patented) IP which increases wireless RF bandwidth.

VisionSpinoza Technology envisions a world of instant, intuitive, universal access to the information you need or want. Our mission is to design and develop “private labeled” convergence technologies for individual and enterprise applications, distributed through multiple channels including OEMs, service organizations and direct retailers.  Spinoza defines convergence as the bringing together of technologies that have traditionally been considered discrete, by incorporating them into one system.

Technical Background

The vision for Spinoza was fostered by:

• the emergence of portable computing devices such as the Cassiopeia, Jornada, Ipaq, and Palm VII;

• the continued development of IP-based telephony solutions;

• the proliferation of portable devices used for communication and entertainment purposes;

• the dearth of all-in-one solutions, due to form factor and revenue stream constraints by existing OEM’s.

Key Gaps

• Technical Expertise: in convergence space, we’ll stand up to anyone out there

• Hardware/Software: aside from a few short delays, we have gained access to the latest

• Market Research: an informed omission (Research Express for selected work)

• Large Scale Project Management; Design and Integration; Manufacturing; Content Provision: TBD, soon.

Assumptions

• Working prototype window: 1st quarter 2001

• Must hit stores Christmas 2001—should be able to make Fall 2001

• We represent the market• Stable IP telephony will be available for

wireline (B3) access within six months, wireless within 1 ½ years.

Potential Trouble Spots• Potential partners wanting to revisit earlier

decisions

• Tasks not worked in parallel

• Partners adopting either/or rather than both/and attitude

• Inability for project to establish SP1N-centered paradigm within convergence space.

Current Value Propositions

Spinoza Technology has identified three revenue models to actively cultivate:

•Subscribers

•OEM’s

•Private Labelers

SubscribersCharacterized by:

•Ubiquity•Large geographic/demographic area•Can reach every part of market

•Monthly billing cycle in place•Back-office procedures already set up•User acceptance of billing model

Examples: utilities, financial services, ISPs, ASPs

SubscribersAdvantages of Partnering

For Subscriber:•Enables co-branding

•Faster time to market

•Turn-key solution

For Spinoza:•Large customer base

•Recurring revenue streams

•Offsets development costs while accelerating market penetration

OEM’s

Characterized by:

•Existing device or PC manufacturers•New market entrants•Established form factor/price point constraints•Established manufacturing/distribution supply chain

Examples: JVC, Dell, Gateway

OEM’sAdvantages of Partnering

For Them:•Quicker time to market

•Customizable and flexible

•Can retain control over form factor

For Spinoza:•Excellent market research already in place

•Established sales and support infrastructure

Private Labelers

Characterized by:

•Devoted customer base•Strong brand identity•Mass distribution

Examples: Sharper Image, Brookstone

Private LabelersAdvantages of Partnering

For Private Labeler:•Brand enhancement opportunity

•Turn-key solution

•Private labeled point of purchase interface

For Spinoza:•Access to sophisticated distribution channels

•Relationship with expert marketers

•Revenue stream from customization (NRE) (Eddie Bauer version or REI version)

Usage Models

Using the SP1N System: a day in the life of an end user…

Applications• Media: video and sound player, sound recorder• Telephony: phone, voice mail, rolodex• Web: full browser, Java console/games, email and

messaging• PDA functions: notepad, draw, calculator,

calendar, to-do list• Desktop apps: Web-based apps, pocket version for

offline work, full version for online work with B3 and SP1Npherals.

Environments

• Office and Home—SP1N device plus B3 and wireline/wireless peripherals

• Remote (on the road)—SP1N device plus accessories and SP1Npherals (Bluetooth-enabled peripherals)

User Needs/Benefits

Two end users are identified:

Early Adopters

Pragmatists

Message to Early Adopter End Users:

•For mobile communicators and information consumers who are dissatisfied with carrying multiple devices,

•The SP1N is a broadband Internet “Swiss Army Knife” that offers wireless Internet access, multimedia capabilities, communications, and applications.

•Unlike the many separate devices that provide parts of this offering,

•The SP1N is a Personal Area Network/Wide Area Network-enabled single solution convergence technology that will give easier control, replacing many electronic devices and giving easier mobility inside and outside of the home and office.

Message to Pragmatist End Users:• If you own a cell phone, pager, PDA, notebook, day

planner, or remote control, • and desire a simpler life with fewer devices while not

giving up any capabilities,• the SP1N is a broadband “Swiss Army Knife” that

allows you to control wireless Internet access, multimedia capabilities, communications, and applications.

• Unlike the many separate devices that currently weigh down and clutter, the SP1N is a single device that will give you easier mobility for your work and lifestyle.

User Segments vs Demographic Profiles

• ?

Competitors

• PDA manufacturers

• Computer manufacturers

• Cellular manufacturers

PDA manufacturers

• Palm, Casio, HP, Compaq

• Adding more functions all the time

• Constrained by existing form factors, price points, and/or revenue streams

• Realistic TTM: 1-2 years

Computer manufacturers

• Dell, Gateway, IBM (HP, Compaq)

• Have the resources and customer base

• Constrained by customer expectations of computing power

• Realistic TTM—2 years

Cellular manufacturers

• Nokia, Ericson, Motorola

• Quickly adding functions; accepted subscriber revenue model allows for faster market penetration

• Constrained by “size wars,” severely scaled-down processors, cellular rates

• Realistic TTM—2-3 years

Secondary Competition

• Portable multimedia player manufacturers

• Pager/instant messaging device manufacturers

• Game console manufacturers

Portable multimedia player manufacturers

• Rio, MP3Man, MovieMan

• Popular, impressive-looking, fun

• Constrained by processor specialization and price wars; little interest in convergence

• Realistic TTM—2-3 years if ever

Pager/instant messaging device manufacturers

• Blackberry, Nokia etc.

• Convenient, inexpensive

• Constrained by size and price wars; too weak to accommodate new functions

• Realistic TTM--never

Game console manufacturers

• Nintendo, Sega, Sony

• High buzz factor, strong processors, good graphics experience

• Constrained by specialized processors, price point

• Realistic TTM—dark horse: somewhere between tomorrow and never

Product Line Strategies

• Platform Roulette

• Research Philosophy

• Current Feature/Platform Progress

Playing “Platform Roulette”

The future of convergence technology is unknown. Today’s dominant platform

may be gone tomorrow…

Therefore, Spinoza Technology is working to identify and develop solutions for all

major platforms.

Features

Research

Our Research Philosophy: Simulate, Specify, Prototype

Sim

ulate

Platforms

Current Platform Features Platform

Feature(assuming high

BW Internet Connection )

PocketPC Palm JWorks QuartzEPOC32 BeIA

Telephony * * * • +Full Browsing • • • •

Streaming Media • • + *Web Apps * + • • •

Instant Messaging * * •

* 3rd Party+ Available within 3 months • available

Technology Trends

Much of Spinoza’s work has pushed the cutting edge of convergence technology.

Therefore, the SP1N system largely constitutes a trend in and of itself.

•Wireless broadband•PushHTML•Connection management

Product Culture

• ?

OEM Strategies

See value propositions for customer strategies

Form Factor Exploration

• Randy has purchased the “latest and greatest” in the portable device world in order to grow in-house form factor experts

• Each member of Team Spinoza has moved into at least two PDA’s

• Gable Design retained for initial form factor work.

B3

SP1N

SP1N w/full keyboard

SP1N w/flip keypad

Ergonomics

User Interface Conceptualization

Robert enjoys Full-Featured Web Browsing, Streaming & E-Commerce from his SP1N on

his way to work.

He gets a head start on his day by catching up on office E-Mail &

reviewing documents for an early morning meeting.

Robert hears a song on the radio and uses SP1N to find and purchase it.

At the office, he uses the SP1N System to access a web-based Application

Server.

He notices some discrepancies in a spreadsheet and uses the SP1N System’s

Telephony to discuss the numbers.

Later that day, Robert uses the SP1N System’s Video Conferencing to talk

with a client.

Going home, Robert uses the SP1N’s MP3 player to relax. He gets an instant

message from his wife.

At home, Robert uses the SP1N System’s Web Browsing & Interactive Game Play to

keep the kids entertained.

After dinner, Robert and his wife use the SP1N System to stream a webcast of one of

their favorite bands.