Additional characteristics of these installation environments include:

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1 Vertical Market Definition, Segmentation, and Overview VDC defines the Supply Chain vertical market in one of two major primary application environments, for this special white paper, as follows: Mail courier/ Freight. Organizations involved in the physical transporting of goods and/or passengers. Major sub segments include postal services, courier services, trucking, air, rail, marine etc. Additional characteristics of these installation environments include: Primary applications within Supply Chain vertical include: shipping/receiving, POD/delivery confirmation, item tracking, shipping/receiving, scheduling, inventory control, cross docking, picking/placing, dispatch, invoicing, etc. Installation environments vary from inside vehicles such as delivery trucks, LTL trucks, etc. to the inside of warehouses, to loading and unloading vehicles arriving and departing warehouses and distribution centers. Environments can vary from relatively clean to very harsh in terms of exposure to particulates and liquids, extreme temperature exposure, constant drops and bumps, EMI/RFI issues, and the type of treatment exhibited by the mobile operator using the device. Based on our research conducted for The Global Markets for Rugged Mobile Computers, 2 nd Edition, VDC estimates that annual shipments of rugged mobile computers deployed in supply chain installation environments could top $1 billion in The value of commercial-grade shipments of mobile computing platforms such as notebooks, PDAs, and tablets might be an additional $1 billion. INSTALLED BASE OF MOBILE COMPUTING AND COMMUNICATIONS SOLUTIONS VDC found that the majority of respondents operating in the Supply Chain vertical market had deployed a mobile computing solution within the last 60 months. Not surprisingly, the majority of those respondents indicated that this was not their 1 st deployment. The use of batch and RF mobile devices in the both supply chain segments has been considerable for nearly two decades. Exhibit I-1 shows that the majority of surveyed respondents indicated their using a rugged mobile computing solution in their supply chain application environments. Give that more environments in courier/freight and warehousing applications are harsher; the majority of units deployed by respondents were also ruggedized in product design. Exhibit I-1 Supply Chain Survey Respondents Segmented by Type of Mobile Computing Solution Deployed (Percent of Respondents) Commercial 15.6% Both rugged and commercial 22.1% Rugged 62.3%

2 VDC was able to conclude that the most utilized form factors in supply chain applications were typically as follows: Primary Business Retail In-Store Direct-Store-Delivery Form Factor Hand held and/or PDAs with/without bar code scanners/ sleds Hand held and/or PDAs with/without bar code scanners Other form factors that are deployed include: notebook computers for in-vehicle docked use; on-board/fixed vehicle-mounted units in warehouses or mounted in delivery trucks; tablet computers that are typically docked in a vehicle or carried around a warehouse by a supervisor; and, a relatively small but growing number of wearable units equipped with either hands free bar code scanners or voice-based recognition systems. Exhibit I-2 provides a breakdown of the primary mobile applications that respondents were supporting to complete core tasks.

3 Exhibit I-2 Supply Chain Survey Respondents Segmented by Primary Applications (Percent of Respondents Overall, Rugged and Commercial Grade Users) Shipping Receiving Item Tracking 61.5% 87.1% 82.9% 78.9% 74.2% 75.6% Inventory Control 23.1% 56.1% 61.3% Picking/Put Awa Delivery Confirmation 37.6% 39.8% 41.9% 46.3% 53.7% 64.5% Office/Communications/ Scheduling 35.5% 39.0% 32.3% 36.6% 50.3% 49.8% Cross Docking Other 12.4% 31.5% 31.7% 29.6% 32.3% 31.7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall Rugged Commercial Note: Percentages sum to over 100% due to multiple responses.

4 VDC found that there were three major types of communications networks being used in supply chain application environments. Terrestrial Wireless WAN. Trucking and logistics companies deploying dome-based satellite communications networks that sometimes were supported by a terrestrial RF WAN. Wireless LAN. Companies deploying WLANs within the warehouse environments and typically relying on wireless networks such as b, either integrated into mobile devices as OEM modules, or plug-in network cards. Clearly, these companies were also investing in corresponding infrastructure of access points, routers, etc. Satellite WAN. In some cases, companies were relying on a variety of network combinations such as satellite communications for use in more rural areas, terrestrial RF WANs in suburban/urban areas, and WLANs when the trucks come in contact with a warehouse or other facility. It is important to note that the TCO models presented in this report do not include a rigorous analysis of communications services fees. SOLUTION REQUIREMENTS, EVALUATION CRITERIA AND DECISION-MAKING VDC asked respondents to rate critical mobile device features and performance specifications (see Exhibit I-4). Wide ranges of configurations are deployed in these markets. Initial pricing and other costs for these different configurations can vary widely. Exhibit I-4 Supply Chain Survey Respondents Segmented by Product Features and Specifications of Mobile Computers Deemed Critical to Their Operational Efficiency (Average of Responses, 1=not critical, 7=most critical) Product Features Overall Rugged Commercial Ruggedness/durability Drop capability - 3+ feet Shock/vibration resistant Dust resistant Water/liquid resistant (Including keyboard) Operating and storage temp requirements Extreme heat/cold resistant EMI/RFI insulation Submersible Product Specifications Overall Rugged Commercial Ease of use - software Reliable - minimal downtime Ease of use - hardware Long battery life Compact size/weight Expandability/ease of integration Warranty duration and coverage Portability - in/out of dock Processor speed Wireless LAN Large display Integrated bar code scanner Color screen Touchscreen/signature capture Wireless WAN Wireless PAN RFID scanner/interrogator Digital camera/imager

5 VDC found that, on average, users of rugged mobile computing devices indicated possessing longer warranty periods as well as longer replacement cycles versus commercial-grade respondents. VDC asked respondents to specify what factors could induce them to accelerate the replacement cycles of mobile computing solutions. The prospect of an attractive TCO/ROI or trade-in value on their existing systems was a particularly powerful factor, as shown in Exhibit I-5.

6 Exhibit I-5 Supply Chain Survey Respondents Segmented by Factors Likely to Induce an Acceleration of Replacement Cycles (Percent of Respondents Overall, Rugged, and Commercial Grade) Technological obsolescence of legacy system 80.3% 81.9% 81.4% Prospect of more attractive TCO/ROI 41.7% 65.1% 72.7% 49.2% Attractive trade-in value 40.3% 46.6% 10.7% Desire to Switch Suppliers 15.2% 14.0% Scalability/Upgradability of solution 10.1% 12.1% 11.8% 9.8% Other 6.1% 6.9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Overall Rugged Commercial Note: Percentages sum to over 100% due to multiple responses. Some of the surveyed respondents indicated that they were replacing mobile devices that had been deployed for five or more years because the cost of replacement technology was either the same or less than the present deployment. Many respondents also specified that the experienced functionality and performance were significant upgrades over their legacy solutions. TOTAL COST OF OWNERSHIP MODELS VDC conducted an extensive analysis of respondents total initial deployment costs for hardware, software, implementation, tethered peripherals, and training, as well as ongoing costs of maintenance and downtime costs.

7 VDC subsequently developed various TCO models that provide a breakdown of the average costs and performance metrics of mobile computing solutions found in mail/courier/freight application environments as well as warehouse/distribution center application environments. Exhibit I-6 provide as breakdown of the conducted TCO analysis using a 5-year comparison that included replacement costs based on the average replacement cycle of respondents using rugged and commercialgrade mobile solutions. Since the replacement cycle for respondents was a 5-year versus a 3-year replacement cycle for commercial-grade users, VDC found that solutions based on rugged devices were over 47% less expensive on a per annum basis. The performance of commercial-grade devices, due to greater failure rates, typically forces the end user to experience an increase in marginal costs such as training, implementation, etc. VDC believes that the results provide fairly compelling evidence that rugged device use in supply chain environments is, in most cases, a more cost-effective solution when looking at the decision in the long term. CASE STUDIES VDC provided two case studies based on feedback from end-user respondents that were involved in using mobile computing solutions in mail/courier/freight and warehouse/distribution center application environments. The case studies provided a brief summary, without disclosing sensitive cost or other operational information, of the following: Business Description; Installation Environments; Applications; Mobile Platform Description; Evaluation Models Used Including TCO; Solutions Evaluated; Key Decision Criteria; Solution Performance General User Feedback; and Go-Forward Plans. SUMMARY OBSERVATIONS AND CONCLUSIONS VDC makes the following summary observations and conclusions as it relates to the topic of TCO analysis: The uses of TCO models will likely increase in frequency with more vendors leveraging them. TCO models are likely to become much more accurate, detailed and perhaps most importantly, take into account the broader set of costs associated with downtime-driven lost opportunity costs in revenue and profit terms thus incorporating an ROI perspective. Another area likely to capture significant focus from TCO model developers is in the multiple layers of software that makeup the stack between the OS and application layers. Customers will demand that suppliers develop industry-standard models in order to more efficiently and easily compare the TCO analysis from different suppliers. Without industry, installation-environment, and application-specific components, the models are of only marginal value. Commercial grade-suppliers will need to be prepared to address the issues driving downtime and downtime costs.

8 Rugged suppliers will need to clearly explain the downtime and downtime cost risks that are avoided or mitigated with their more expensive devices.

9 Exhibit I-6 Total System Costs and Downtime Costs per Operator for Survey Respondents Using Mobile Computers Using a 5 Year Constant Comparison Analysis Mail/Courier/Freight Application Environments A) Rugged Mobile Computers Average Replacement Cycle (# of years): 5.0 years Life of Mobile Project Total Cost of Ownership Year 1 Year 2 Year 3 Year 4 Year 5 Hardware (Form Factors) Costs Hand Held/PDA $1,399.1 $1,399.1 Integrated Peripherals (included in HW costs) Tethered Peripherals Software Costs $198.5 Implementation Costs $807.2 Training Costs $598.5 Annual Maintenance Costs $177.5 $367.0 $367.0 $367.0 $367.0 $367.0 $1,835.0 Total Initial Deployment and maintenance costs $3,547.8 $367.0 $367.0 $367.0 $367.0 $5,015.8 Operation/Staff Time Hourly rate of mobile operators - $14.02 hour, plus 35% for benefits $18.9 $18.9 $18.9 $18.9 $18.9 Downtime/Productivity Loss Downtime resulting from product failure - Ave. hours annually/operator Cost of lost downtime per tech per year $468.7 $468.7 $468.7 $468.7 $468.7 $2,343.6 Loaded annual salary of IT Support personnel - $19.5/hour, plus 35% for benefits $26.3 $26.3 $26.3 $26.3 $26.3 Downtime resulting from product failures - Ave. hours annually per IT person Cost of IT for downtime support $242.0 $242.0 $242.0 $242.0 $242.0 $1,209.8 Total operational/staff costs $710.7 $710.7 $710.7 $710.7 $710.7 $3,553.4 Total Cost of Ownership per annum $4,258.5 $1,077.7 $1,077.7 $1,077.7 $1,077.7 $8,569.2 Annual Costs $1,713.8 Note: 5 year analysis assumes a 10% per annum reduction in hardware and tethered peripheral costs and 5% per annum for all other costs (excluding maintenance), Year 5 costs divided in half to reflect 0.5 year on new replacement costs B) Commercial-Grade Mobile Computers Average Replacement Cycle (# of years): 3.5 years Life of Mobile Project Total Cost of Ownership Year 1 Year 2 Year 3 Year 4 Year 5 Hardware (Form Factors) Costs PDA $ $1,143.4 Tethered peripherals $280.3 Software Costs $944.2 Implementation Costs $969.2 Training Costs $234.0 Annual Maintenance Costs $2,046.0 Total Initial Deployment and maintenance costs $2,320.3 $409.2 $409.2 $1,239.2 $1,239.2 $5,617.1 Downtime/Productivity Loss Hourly rate of mobile operators - $12.5 per hour, plus 35% for benefits $18.9 $18.9 $18.9 $18.9 $18.9 Downtime losses from product failure - Ave. hours annually/operator Cost of lost downtime per tech per year $911.0 $911.0 $911.0 $911.0 $911.0 $4,554.9 Loaded annual salary of IT Support personnel - $19.5/hour, plus 35% for benefits $26.3 $26.3 $26.3 $26.3 $26.3 Average hours annually per IT Support person spent to support mobile users Cost of IT for downtime support $491.8 $491.8 $491.8 $491.8 $491.8 $2,459.1 Total operational/staff costs $1,402.8 $1,402.8 $1,402.8 $1,402.8 $1,402.8 $7,014.0 Total Cost of Ownership per annum $3,723.1 $1,812.0 $1,812.0 $2,642.0 $2,642.0 $12,631.1 Annual Costs: $2,526.2 Note: 5 year analysis reflects a 5% per annum reduction in all costs except tethered peripheral costs (reduced at 10% per annum) and maintenance costs, new replacement costs are reflected in years 4 and 5 reflecting 1/2 replacement costs at reduced prices