Bakelit

Presentation at Kista 010530

Bakelit Forecast & Analysis

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

E-mail

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

Bakelit

Bakelit Top 5

Källa: Bakelit (2001)

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