Exhibit IX-1: The Logic Of Functional Divestiture: Applications Prodduct Space

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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