Market conditions Years 6-9

The adverse publicity over exploding handsets in the Round 4 market conditions has now
been largely forgotten by consumers and the demand resurgence for mobile phones seen in
Round 5 continues initially.

Market growth rates in Year 6 are predicted to be the same as Round 5: 15% in Europe,
20% in USA and 40% in Asia. In Years 7-8 growth is projected to slow to 7% in Europe, 10%
in USA and 20% in Asia as technologies become more established. In Year 9 growth slows
further to 2% in Europe 7% in the USA and 10% in Asia.

A major issue has arisen with Tech 1 phones. The materials used in that particular
technology have been identified as a major contributor to global warming. As a result,
governments in Europe and Asia have introduced regulations which mean that Tech 1 will be
banned from The European and Asian markets from the start of Year 7 for your forecasts.
The USA has not introduced these regulations.

Oil prices are increasing due to a flare up of further instability in Oilistan.

Trade tariffs and interest rates are expected to remain at their current levels.

Outsourcing capacity continues to face restrictions, as a number of sourcing companies

have gone out of business. This has impacted particularly on those outsourcing companies
producing the newer technologies. As a result, outsourcing costs for Tech 3 are expected to
rise by 20% each year after Year 6. Outsourcing costs for Tech 4 are expected to rise by
10% each year after Year 7.

Stock market investors are finding the Mobile Phone sector an attractive sector due to its
growth levels. Share prices are therefore now at a high level for Mobile Inc. You should
assume that should your company wish to raise funds by issuing new shares, that there is
sufficient investor interest and share prices are of a high enough level to make this possible.