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Bakelit
The object of the project is to increase Europolitan’s knowledge about the strategies of terminal suppliers and to suggest strategies for Europolitan that could secure the company’s need for 3G terminals to complete its own market offering.
The project
Constraints: The time scope has been set to the early 3G market ending in 2003-2004. Terminals that are being studied are volume products marketed to broad customer segments, not terminals for special professions etc.
Agenda
• Overview of 3G services and applications• What services are customers interested in?• How can the operator supply the services?• What components comprises a terminal?• How much will the 3G terminal cost?• What types of 3G terminals will there be?• Who will supply the terminals?• What strategies are the suppliers following?• What should the 3G terminal look like – Bakelit dreams!
Bakelit
Bakelit
Source: BCG proprietary consumer database.
E-mail & SMS
News, weather & sport
Ring tunes & display icons
Surfning
Financial information
Travel information
Personalized services
Regional information
Chat & news groups
Games
Price comparisons
Location based services
US
A
Jap
an
Germ
an
y
Fra
nce
Sw
ed
en
1 1 2 1 1
2 3 1 1 2
12 2 8 8 3
4 9 5 4 4
8 12 3 5 5
3 6 6 5 6
6 8 7 8 7
5 5 4 3 8
9 4 10 12 9
11 7 12 11 10
7 11 9 10 11
10 10 11 5 12
Service Preferences
!
! Services and applications must correspond to their promises
Success is depending on a numerous of factors, e.g. Geographical market and the nature of the terminals
Conclusions
Service Ranking
Bakelit
Source: Bakelit
SMS
Bank account
Electronic calendar
Guidance
News & weather
Surfing
Download/send pictures
Music
Stock trading
Friends position
Phtographing
Pay-in-store
M-shopping
Electronic visiting card
Text editing
File download/upload
Ringing tunes
Sport
Chat
Advertising
Video
Computer games
Network gaming
Gambling
1 2 3 4 5Average
Connection time
Service Characteristics
Bakelit
Källa: Bakelit
Secu
rity
No requirements Short time required
Low
requi r
em
ents
Hig
h r
equir
em
ent s
Stocks
Bank account
Positioning
Download/send pictures
Listen to music Surfing the Internet
Unified Messaging
Guidance
News/weather/sport
Ringing tuned
Bakelit
Service Characteristic3
2,5
2
1,5
1
0,5
0Navigation Screen Input Memory Processor
Most
popu
lar
Least
pop
ula
r
Source: Bakelit
!
Bakelit
Limited demands on the technical performance of the terminals.
Secure the supply of terminals with focus on user’s interface.
The services can be launched early.
The most popular services require good input/output solutions.
The least popular services demands more memory and processor capacity
Conclusions of Market Research
The most popular services have relative low demands on bandwidth !
Bakelit
3. Price discrimination
1. Demographical groups
Preferences similar despite different sex or employment. Small differences due to age.
2. Services connected to types of terminalsGrouping services after their way of usage has not given any useful information.
Segment customers after their ability and willingness to pay• Business Class• Economy Class• Some age segmentation
Customer Segments
Bakelit
Service
UMNews/weather/sportBank accountGuidanceStock trading
Surfing
YachtPositionPollenrapporten
Developer Way of cooperation
Europolitan
Europolitan-TT
Europolitan-banks
Europolitan-Gula sidorna
Europolitan-Reuters
Europolitan-ISP
mobilePosition
Palynologiska lab.
Inhouse development
Needs content provider
Must work with Swedish banks
Needs content provider
Needs content provider
Agreement
Certificate, no mass market
Certificate, no mass market
Guaranteed services
Internet connectivity
Specialized services
Service Development
Accept Categories
Specialized services• Friends position in ages 15-20• Guidance in ages 51-
Early acceptors
Inventors
Early majority
Late majority
Late comers
Scepticals
Guaranteed services• All demographic groups are interested of these services
Internet connectivity
• Surfing in ages 21-30• Sending pictures in ages 51-60• Music and ringing tunes in ages 15-20
Bakelit
Target market:Excisting segment of mobile service
users
Source: Bakelit (2001)
Bakelit
-create a need the user wasn’t aware of
• SMS lunched quietly, but grew to a huge ”need”
• Alcatel: step-by-step development to accustom users to new services
• Case study:1800
1600
1400
1200
1000
800
600
400
200
094 95 96 97 98 99 00 01
Real expense
Will to pay
Behavioural Patterns must be Changed
Components • Processor
– Risc CPU
– DSP
• Memory– SRAM
– DRAM
– Flash
• Battery
• Radio interface– WCDMA
– CDMA2000
– Bluetooth
– GSM
– WLAN
• Operating system– Pocket PC
– Epoc
– Palm OS
Bakelit
Components continued• Display
– TFT LCD
– Microdisplays
• I/O interface– Serial
– Irda
– Pc card
– Docking stations
• User interface– Touch screen
– Voice commands, text to speech
– Keyboard
– Writing recognition
– Audio in/out
– Video, static pictures
Bakelit
! •Technical capabilities not a bottleneck!
•Problems:
- user experience
- mass production
- software
Bakelit
Conclusions – Technology Inside the Terminals
Bakelit
Mid-segment with app. 32MB RAM, 32MB ROM, color display 240x320.
Lowest prices 6000 kr.
Smartphones with small memory.
Lowest prices just below 6000 kr.
Small overlap = price slightly below sum of both products
PDA, kr
Smartphone, kr
Sum
Excl VAT 25 %
All-in-one discount
Bluetooth premium
Index price
Price fall / quarter
Low
est
con
su
mer
pri
ce,
feb
.
200
1
Low
est
marg
in
Su
pp
lier
pri
ce
5400
5310
10710
8568
10 %
500
8211
5 %
10 %
10 %
6000
5900
Display
Radio
RAM, MB
ROM, MB
Card slot
Ports
240 x 320
UMTS, GSM 900/1800, Bluetooth
32
32
CF
USB
Example configuration
integrated PDA/telephone
Assumption for Price Estimate
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
2001
Q1
2001
Q2
2001
Q3
2001
Q4
2002
Q1
2002
Q2
2002
Q3
2002
Q4
2003
Q1
2003
Q2
2003
Q3
2003
Q4
2004
Q1
2004
Q2
2004
Q3
2004
Q4
Kr
Bakelit
- Supplier’s price for small volumes excl.VAT -
1,
Estimates: 1, Lars Lundberg, TietoEnator 2, Ovum (Maj 1999) – here: Smartphone= telephone with microbrowser. 3, Trium Mondo 4, Sagem WA3050 5, Motorola Accompli08 (Price information in Connect magazine)
2, Smartphone
2, PDA
3,
4,
5,
Price Estimate
Bakelit
Fashion SimplicitySave time Entertainment
Sources : Finanstidningen 20010327
www.motorola.com
Vision 20010222
Bakelit article search.
Motorola – Need Segments
Communicator- Business segment
- Office applications
Media phone- Mobile Internet
- Third party applications
Imaging phone- Person-to-person
- Inspiring user interface
Bakelit
Sources.: Calling the Next Generation, White Paper from Nokia
www.nokia.com
Bakelit article search
Nokia - Function Segments
Bakelit
Sources.: www.siemens.be/umts/press1.htm
www.siemens.com/umts
Bakelit article search
Interviews at CeBit, Hannover 2001
Professional AwareActive
Siemens - Person Segments
Bakelit
Alc
ate
l
Eri
csson
Kyocera
Mats
ush
ita
Mit
su
bis
hi
Moto
rola
NEC
Nokia
Ph
ilip
s
Sag
em
Sam
su
ng
Sh
arp
Sie
men
s
Son
y
Tosh
iba
1 Office
2 Image
3 Fun
4 Compact
5 Fashion
6 Internet
7 Simplicity
8 Robustness
9 EntertainmentSources: Official home pages, Bakelit article search, Interviews at CeBit, Hannover 2001
FocusInterest shown through prototypes or existing terminals
Suppliers’ Segments
Bakelit
3G
GPRS
Samsung
Mitsubishi
Matsushita
NEC
Toshiba
Motorola
Ericsson
Siemens
Alcatel
Sagem
Nokia
Philips
Sharp
Kyocera
Sony
Fujitsu
Market launch 2001 2002 20042003
Market Launch
Sources: Official home pages, Bakelit article search, Interviews at CeBit, Hannover 2001
Bakelit
* M = Microsoft, P = Palm, S = Symbian
Bakelit Ranking
Alc
ate
l
Eri
csson
Fu
jits
u
Kyocera
Mats
ush
ita
Mit
su
bis
hi
Moto
rola
NEC
Nokia
Ph
ilip
s
Sag
em
Sam
su
ng
Sh
arp
Sie
men
s
Son
y
Tosh
iba
Market share
Product range
Direction
Brand (Sweden)
Early launch
Local establishm.
Plattform* P S MP P M S S M P MS P
3
1
1 1 1
1
1
1
1
1
1 1
1
1 1
1
1
1
1
1
1
11
1
11 1 1 1
1
1 1 1
1
2
2
2 2 2
2 2
2
22
2222222
2
22
222
3 3333
3
3
3
33
3
3
3
33
3
3
11 2211
12 2 2 2 23 1 2 1 3 2 22 1 2
1
3
2
Grades:
3 = best grade
Hardware
Marketing
Motorola
Alcatel
Ericsson
NEC
Nokia
Nortel
Panasonic
SONY
SAGEM
SamsungSharp
SONY
Telital
Ubinetics
Lucent
Omnitel
Casio
VeriSign
Mannesmann
C Tech
Tivoli
COM One
HP
Intel
AT&T
Symbian
McHugh
Philips
MIC
Psion
Dialogic
Caldera sys.
Kerridge
TT Soft
SAP
Silicon Grap.
Cognicase
Security dyn.
Tality
Marubeni
Picturetel
MitsubishiPioneer
TiVo
Toshiba
McHugh
Logility
Natural Microsystem
AvantGoOrange
RF Microdevice
sSolectron
Digital View
Symbol Tech.
Companycare
Telstra
France Telecom
Sprint PCS
Operators
Software & applications
Content & services
AFP
EMI Music
UIEvolution
MasterCard
Sega
AccentureYahoo!
Nuvomedia
Cervervision
ORBCOMM
RealNetworks
MacroMedia
NOB
IBM
SUN
iPlanet
Sybase
Conversay ORACLE
Anite Telecoms
Interstar Tech.
LutrisTeam
Microsoft
HP
Apple Corel
Webmethods
Microcell
TIM
British Telecom
M1
Source: Bakelit (2001)
Bakelit
ManufacturingFlextronics
Solectron
Nippon
Suppliers’ Alliances
Terminal
suppliers
10%
4% 3%
14%
17%
52%
Terminal
suppliers
Bakelit
Hardware
Marketing
Operators
Software & applications
Content & services
Manufacturing
Bakelit
Strategies – a Few Conclusions
• Asian and European suppliers cooperating
• Established suppliers are most important in early 3G market
• Established suppliers create alliances mostly within software & applications
• Waiting for working infrastructure
Sources: Bakelit (2001)
Bakelit
Europolitan – Opportunities to Cooperate with Terminal Suppliers
Bakelit ideas
• Act early and tell suppliers what types of terminals will be subsidized
• Support open platforms and traffic drivers, for example cameras
• Avoid the risk of being locked to certain suppliers. Don’t order specified terminals.
Supplier•Early supply
•Volumes
•Open platforms
•Traffic drivers
•Support for services
Operator•Customer information
•Guaranteed subsidizing
•Network orders
•Support for functionality
Bakelit
Suppliers
•Motorola•Mitsubishi•Ericsson•Nokia
Services – service suppliers
•Voice Europolitan•UM Europolitan•Bank services Europ/banks•Surfing Europolitan ISP•News Europ/TT•Guidance Europ/Gula Sidorna•Office extension Independent
Prices and subscriptions
BusinessDon’t subsidize the price but offer office extension services.EconomyPrize subsidize and long subscription lock-in.
Description
•B/W display•Touch-screen•Pen-input•Turn display•Bluetooth•Dual band
Software
•Open platform•E-mail•Microbrowser•Calendar•Writing recognition
Vision Terminal - Mainopolitan
Bakelit
Suppliers
•Motorola•Samsung
Services – service suppliers
•Voice Europolitan•UM Europolitan•Bank services Europ/banks•Internet Europolitan ISP•News Europ/TT•Guidance Europ/Gula Sidorna•”Photoloft”Europolitan•Office extension Independent
Prices and subscription
Extensive price subsidizes to make users use electronic postcard services and other imaging services. Drives traffic with camera and color display.
Description
•Color display•Touch-screen•Pen-input•Camera•Memory card•MP3•Turn display •Bluetooth•Dual band
Software
•Open platform•E-mail•Microbrowser•Calendar•Writing recognition•MP3-player•Image editing
Vision Terminal- Pictopolitan
Bakelit
Suppliers
•Ericsson•Motorola
Services – service suppliers
•Voice Europolitan•UM Europolitan
Prices and subscription
Could be interesting to subsidize since accessories will drive traffic.
Description
•B/W display•Bluetooth•Digit buttons
Software
•Accessories handling•E-mail•Telephone book•Voice commands
Vision Terminal- Connectopolitan
Bakelit
Suppliers
•Nokia•Mitsubishi•Samsung
Services – service suppliers
•Voice Europolitan•UM Europolitan
Prices and subscriptions
Not a traffic driver – no subsidizing.
Description
•B/W display•Digit buttons•FM-radio•MP3
Software
•E-mail•Telephone book•Voice commands•MP3-player
Vision Terminal- Trendopolitan