EXHIBIT IX-1: THE LOGIC OF FUNCTIONAL DIVESTITURE: APPLICATIONS PRODUCT SPACE

This diagram shows interactions within the applications, middleware, and operating system product spaces. The product spaces are depicted as three layers separated by a dotted lines. Interactions between the spaces are indicated by arrows.

In the Applications Product Space

  • Application companies (APPS Co.)
  • Expand revenue
    • Port Apps to Other OS
    • Add Functionality
  • APP competition
    • Monopoly leverage eliminated => more price and quality
  • APPs

In the Middleware Product Space

  • Attack OS Revenue
    • Develop Middleware
  • New Distribution Channel for Middleware
  • Attack APP Revenue
    • Develop Middleware

In the Operating System Product Space

  • Create OS Competition
  • Defend OS Revenue
    • Barrier to entry lowered => responsive to market demand
    • Other Apps supported
  • Expand OS Revenue
    • Increase Demand by Stimulating Apps
    • Drive Down Apps Prices
  • Operating System Companies (OPs Co.)

Interactions

  • Arrow from Expand Revenue (App Space) to Attack OS Revenue (Middleware Space)
  • Arrow from APPs to (App Space) to Expand Revenue (App Space), App Competition (App Space), and New Distribution Channel (Middleware Space)
  • Dotted arrow from Attack OS Revenue (Middleware Space) to Create OS Competition (OS Space)
  • Dotted line from Attack APP Revenue (Middleware Space) to APP Competition (App Space)
  • Arrow from New Distribution Channel (Middleware Space) to Defend OS Revenue (OS Space)
  • Dotted arrow from Create OS Competition (OS Space) to OPs Co.
  • Arrows from OPs Co. to Defend OS Revenue and Expand OS Revenue (all in OS Space)
  • Arrow from Expand OS Revenue (OS Space) to Attack APP Event (Middleware Space)

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