Bounce Business Summary 3

The PersonalDigital Media Network Company

Bounce Networks Confidential

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UMMARY

Bounce Networks offers life-changing digital entertainment access.

Problem

– Disarray of physical media and hardware devices within the home.

Solution

– Centralized digital storage of all media types, broadcast wirelessly throughoutthe home & auto

Mission

The goal of Bounce Networks is to be the leading provider of complete personal digital mediaplatforms to consumers in the home and on the road.

Bounce Products and Services

Bounce Networks’ emphasis will be on providing a complete platform offering which will include:

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Reference designs for a simple and powerful digital media server/receiver architecture

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Optimized wireless entertainment networking based on existing standards

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Revolutionary digital rights management that provides unprecedented flexibility whileproviding a secure environment

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A comprehensive consumer entertainment subscription service

Market Environment

The market for digital personal entertainment devices and services that leverage the Internet israpidly growing. It is expected that by 2005 there will be nearly 29 million US households withbroadband Internet connections, over 122 million broadband devices in US homes, and over 1billion Bluetooth capable devices.These market dynamics converge to deliver an estimated 10 million broadband digital musicsubscribers by 2005. Digital music is just the beginning of the personal digital media revolutionthat will occur over the next 5 years. Bounce Networks intends to exploit every digital media type,delivering next generation platforms that enable practical consumer usage and innovativeservices that deliver unparalleled entertainment enjoyment.

Customer Profile

The Bounce Service will rely on a broadband Internet connection for incremental updates tocontent. So, the first defining characteristic of a Bounce customer is that they have broadbandInternet either via cable, DSL or satellite. The second defining characteristic is that they must usedigital content. Based on research by Jupiter and Forrester, Bounce estimates that 36% of Broadband Internet users are using digital media in 2001. That number grows to 48% in 2005 asservices & solutions proliferate.

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Leading PC & Consumer Electronics brand partners

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Content sources

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Retail hardware & media partners

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OEM/ODM manufacturing partners

Competitive Advantage

Intellectual Property

Bounce Networks will defend its market position and achieve sustainable advantage through swiftproduct execution and a simple/unique business model. This will be fortified by a powerful andpertinent patent portfolio.

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User-centric Digital Rights Management

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Multi-channel digital streaming & synchronization

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Bulk media load & update process

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Virtual home wireless backbone & local subnetsLeadership

Bounce Networks has attracted a world-class management team to lead its daily operations. Bycapitalizing on the management team’s proven track records in consumer PC, wireless, andInternet products and services, we will be able to draw upon a great talent pool of employees andadvisors to build this industry shaping business.Bounce Networks board of directors has unparalleled PC, Consumer Electronics, Retail andConsumer Services industry expertise.

Entry Timing

Bounce will be released with at least one OEM brand partner for the 2001 Holiday shoppingseason. Additional partners will be added immediately following.

Result

By being an early entrant with a comprehensive solution for the Personal Digital Media market,Bounce intends to gain a leading market share and become the preferred brand amongstconsumers and major CE/PC brand partners.Bounce Networks’ projects the business will turn cash and earnings positive by the middle of 2003 with a sustainable EBIT rate in the 20% range by 2005.

Bounce Networks, Inc.