MoPC Biz Proposal

Jagan Rao

6th October 2008

RecapTechnology

Products Markets

Adoption Segmentation DemograhicsPsycho metrics

Technology

Product

Market

RevenueYear 1 Year 2 Year 3 Year 4 Year 5

CGS

GM

R&DSG&A

OE

SundryInterest

PBT

Volumes

TotalCost

FC

VC

TCBEP

Ratios

-3 0 1 2 3-2 -1

need rel ship

40% 25% 35%

idea Biz plan project

AB

C

GM %%

Mar

ket

Define SpecificationUnderstand Customer

Define Customer

Fuzzy Frontend

Product Spec

Market Strategy

Technology

Opportunity Analysis

Low Cost PC - Comments

• Home PC market & Internet Penetration has been low• Dominated by MNCs because of Brand - Quality & Support• Innovation Or Cost : That is the Question!• Innovation Creates High Margins

– New Products & markets– Edge in existing markets

• Cost (and SP) Improve Margins and is a function of – Sourcing cost, conversion cost, Inventory & distribution /support cost

all of which are a function of Volume. – Innovation (& therefore R&D cost) almost does not figure in this at high

volumes – no point in optimizing this!• Market Parameters

– Target Market Segment : E.g. What was the target segment for the Simputer?

• User segment: Home? Enterprise? Rural?• Need segment – Entertainment? Biz? SOHO?

– Demand (latent/real/) : Is there a latent demand that will propel the biz? (e.g. Small Car and CTV in 80’s or Landlines in 90’s or Mobile in 00’)?

Year

2% 3% 5%9%

13%

97% 98% 97% 95%91%

87%

3%

1716

2345

3124

3810

5047

6341

0%

20%

40%

60%

80%

100%

120%

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

.Notebooks Desktop PC Total PC

Ove

rall

PC

Mar

ket

Siz

e

(In ‘000)

• Notebooks account for 13% PC market, up from 9% in 2005-06.

• Notebook sales grew by 97%, while growth in Desktop sales was only 19%.

Growth in 2006-07 over 2005-06 26%97%19%

Overall PCNotebooksDesktop PC

What is being sold”Notebook vs Desktop sales

6

Where is it being sold?Where is it being sold?Businesses vs. Households Businesses vs. Households (Half Yearly Desktops)(Half Yearly Desktops)

1,831,583 1,640,7401,958,560

1,616,590

2,125,637

1,463,563

510,827476,907

631,574572,140

834,254983,242

0

900000

1800000

2700000

Oct.04-Mar.05

April-Sept.05

Oct.05-Mar.06

April-Sept.06

Oct.06-Mar.07

April-Sept.07

Businesses Households

• Business Sector accounted for 62% of the market; consumption decreased by 17% over H1/2006-07

• Consumption in the households increased by 72% compared to H1/2006-07, accounting for 38% of the sales

Uni

ts

7

H1/2006-07

• Unit sales of MNC brands improved by 33%

• Indian brands registered a decline of 24%, while Assembled declined by 10% in

absolute terms

H1/2007-08

Who is is selling?Who is is selling?Desktop market: Indian, MNC & Assembled Desktop market: Indian, MNC & Assembled

23%

37%

40%

Indian Brands MNC brands

Assembled

17%

48%

35%

Indian Brands MNC brands

Assembled

How to create demand (Volume)?

• We need to Look at – Where are the big Needs? Today and after 2 years– Where are the big Volumes? Today and after 2 years

• What is the affordability?– What is the cost point?– What is the biz model?

• Where is the customer– Where are the big clusters?– How does one attract customer attention?

Volume Analysis : Schools

696,609

B.E

1,465,028

BCom

256,7481,490,7853,772,216122,257198,719469,29155,352

MBBSBScBAMComMSCMAPh.D

Enrollments in 2004

Source: Selected Educational Statistics, Ministry of HRD, N Delhi

Volume Analysis

9 Million Degree Students in 2004

Growth Analysis

Is it a market to be in?

• TAM > 9M• SAM : 1M• Growth : 30%• Period : > 5 years

Generating the Product Spec (for today)

• What is needed in the Product– Office & Windows– Run standard Windows/Linux Apps– Storage– CD/DVD Media– USB to transfer files

• How much will the customer pay?– 50% of tuition or transport fees?– 2X cost of books?

• Likely Biz Models– Retail– Rate contract

Available TodayNeed Who Provides

• Desktop• Laptop• WinMobile

10,000-50,000

• HP• Dell• Acer• Apple

• HCL• iNTEX• Chirag

Possible Differentiators

• Cost• Size• Form factor & ID• Mobility• Power Options

Biz Proposal

Product Alternatives

• Cost reduced Laptop/ Desktop: – Crowded market, no differentiation, not playing to strength

• PC centric Mobile Phone running WindowsMobile with Win32API Layer for XP compatibility– Not feasible

• PC centric Mobile Phone running WindowsMobile or Linux with remote client capability– Initial study shows feasibility: needs to be validated and

optimized to create differentiation

1. What have you identified as the Opportunity? ● All Students 9th upwards will need a PC to learn from the Web,

download tutorials, practice programming etc.● India market alone is projected at 1M users initially growing at

30% CAGR

2. Who are the Stake Holders & Players?● PC Mfr, Sales channels, Support channels● HP, Dell, Acer, HCL, Imtex …

3. Who is your customer and what is the revenue

flow?● Students 9th to Degree/PG● Student -> School/College -> Supplychaiin

Jagan’s Ten Steps

4. What is your product & differentiation value?● Product: MoPC with Remote client● Differentiation :Cost, ID, Mobility

5. How will your customer measure your value● Ability to run PC ware : Windows Apps and Tools● Initial Cost and expandability for the future

6. What is your Business architecture model?● Sell Basic model at nominal profit● License margins off educational software

5. What is your Goto Market Strategy● Sell through book shops : along with books● Sell through institutions● Partner with a large brand

Jagan’s Ten Steps

2. Map a customer centric approach to expanding your product● Accessories● Music, Gaming● New IDs

3. How will you keep a running lead against other entrants?● ?

10. What do you need to execute?● Market Research● Access to Design house● $X for Field Prototype● $x launch● Access to Supply chain

Jagan’s Ten Steps

MoPC

• PC features on a palm sized mobile device

• Community PC concept: Share your home / business PC

• Connect to your home PC over the Internet using Remote PC Client

● Access all you PC appls and SW● Store sessions for future reference.

• Share the PC between several users if you wish

• USB centric connectivity●. Standard USB Memory stick to store additional data. ● Connect a host of accessories including a variety of wireless modems to access your PC remotely on the move.

Study, Stay in touch, Enjoy your music, Play your favorite games with the MoPC!

Mobile PC.

Home PC

MoPC

Study, Stay in touch, Enjoy your music, Play your favorite games with the MoPC!Hardware

●OMAP 2420 Processor●4” LCD display●Full Qwerty Keyboard●6 Internal USB ports for SDD and other accessories●VGA interface●Ethernet interface●GSM/CDMA/Wifi add-on accessory●Camera add-on accessory●Accelerometer add-on accessory●FM radio with recording add-on accessory●Penlight NiMH batteries

Software●Windows Mobile or Unbunto Linux●Anuna Remote PC Client●Pocket Office tools●Media player/recorder

Size & Weight●110X70 MM●100 Oz

ID2ID3

ID4

MOPCCustomer : Students

USP ● PC Compatible● Community PC : Shared cost● Access to PC anywhere● All Mobile Features● Palm Sized● Runs of standard batteries● Various IDs

Why we win:

• Windows

• Sub 5000/-

• Mobile Version of NetPC

• Sharing of PC and associated software

• Service Bundles

Competitor Models

ASUS EEPC Intex Gold BA73411

• Status: Shipping

• Cost : Rs. 14000/-

• Features:

• Linux

Avg. ’09 ASP

Avg. ’09 CPU

Avg. ’09 GM %

‘09 GM ($M)

Launch date July 09

On-Time

Differentiated

GM$

CURRENT STATUS*

Orig Plan Current View

X

X

X

X

X

Market Segments:

Lifetime Units 10 Million

$120

$80

$40

50%

HTC P3400

• Status : Shipping

• Cost : Rs. 17,500/-

• Features

• Linux

• Status : Shipping

• Cost : Rs. 9000/-

• Features

• PocketPC

Product Overview

Novatium Net PV

• Status : Shipping

• Cost : Rs. 2999/-

• Features

• Thin client DUDM

• All Apps on Server

• Wifi/Ehternet

Roadmap (Device, Software, Accessory)

H1-09 H2-09 H1-10 H2-10

$x

$x

$x $x$x

$x

Rs. 4999

Product Architecture

CorePlatformCore

Platform

CorePlatform

CorePlatform

Inpu

tIn

put

Inpu

t

Out

put

Out

put

Out

put

User I/FUser I/FUser I/F

System I/FSystem I/FSystem I/F

Suggested Plan

MRD/PDConcept DeviceOn OMAP

Evaluate/FieldTrail for Remote

PC Client

Proof of conceptRemote Client

Fuzzy Front End Biz Case

Execute

Launch

5M 2M 6M

Funding

Contracts