Technology and market evaluation for remote access of mobile device and development of a business plan

Abstract

In this project we would like to evaluate the feasibility and potential of creating a new business Venture to develop a solution offering Remote access to mobile device for content providers. The proposition allows content provides to test applications and validate delivery of content on a live network on real devices, using a PC from anywhere in the world. Importance of the work: Today, Mobile content services represent a significant 15% of telecom operator's revenues in most of the western countries. The total market size is over 10 Billion dollars worldwide dominated mostly by large content providers. However, multitude of devices, disparity of networks and lack of standards makes the content developers grapple with 'on device' and 'on site' testing issues. There are well over 400 + commercial mobile device models in the market, each with more than100 + attributes or specification parameters. The cost of testing is estimated to be almost 20-30% of operational costs for these firms, involving huge travel expenses and consultants to do On-site On-device testing There exists an immediate need to save costs in 'real device testing' required before the deployment of content. The prohibitive high costs are preventing many small and medium size creative content providers, playa part in the value chain. Objectives: The objectives of this project are to Evaluate the technology and market feasibility of offering testing services using the remote access device. Estimate the market size and potential with specific emphasis on UK, USA and India. Develop the value proposition from the perspective of 'Digital Content Providers' addressing the concerns of all players of the value chain includingthe device manufacturers and operators. Develop product positioning and pricing plan for the product in different geographies. Create a Business Plan including financial projections, cash flow estimates and funding requirement for business. Methodology: Market research of primary and secondary data for sizing the opportunity and evaluation of Industry's structural attractiveness. Market segmentation and Product positioning by using different frameworks and techniques of B2B marketing. Competition analysis by studying development and growth of different players in the value chain. Projections of revenues, costs and cash flow. Break even analysis for determining the investment required. Expected Learning: Understanding of the mobile content provider's pain points and needs Business challenges of introducing a technology product in the niche domain of mobile content retailing Application of principles of Product Management in Segmentation, Targeting and Positioning in a real world situation. Application of financial forecasting, cash flow projections in the context of financing a start up Product Company. Market Size Estimate: From various research reports, we obtained the size of total world wide data revenues of 80 billion US dollars. Downloadable content accounts for about 15 Billion US Dollars. However the focus of our study has been India, Western Europe and USA. Considering the current testing costs of 25-30 %, we estimate the addressable market to be about15 Million dollars in United Kingdom and India. Industry and Value Chain Analysis: We have studied the industry from multiple perspectives, including content providers, telecom operators, aggregators, rights owners and end users. We have analyzed the industry from Value chain perspective, structural attractiveness and share of money. We observe that this industry requires specialized niche players to absorb the complexity in the testing and delivery of mobile content. Technology Evaluation: This conceptualized product allows one to completely control the keypad, view the display, listen to the sounds, make calls, send messages and even reboot a real mobile device - sitting anywhere in the world working on a PC connected to the internet. Unlike other products that simulate a mobile phone, this product allows the developer to hook up to a real phone in a real network and test out the application. It allows for field-testing without requiring an onsite presence. As a part of technology evaluation we have identified the key features of the product, benefits and pricing based on primary research findings. Market Segmentation and Targeting: Here we have segmented the market along several dimensions including Geography, Customer Business size and Customer Business type. From analyzing each of the segments, and the capabilities we identify the initial "Target Market" to be UK and India for small and medium size content providers. Positioning and Value Proposition: The positioning statement we have come up with is as follows: "For small to medium size mobile content providers in India and UK [CUSTOMERSEGMENT1, the solution reduces the costs of physical device testing and field validation for mobile content delivery [BENEFIT1 by eliminating the location barriers and removing the need to purchase expensive devices [REALIZA TlON1 The focus is primarily on COST REDUCTION for existing businesses. It does not create a revenue opportunity where none existed before, though the product makes several more small businesses viable because of lowering testing costs. It addresses the core problem of device fragmentation in the industry. It removes the barriers of national borders, immigration, travel costs and network limitations by leveraging the INTERNET. Competition Analysis and Differentiation: We have identified multiple sources of competitive threat from different quarters including current players in different geographies (e.g. Mobile Complete) and testing service providers who provide manpower and physical devices on a usage basis. We find that sources of differentiation come from superior technology, geographic reach and device coverage. However in the long run none of those would be sustainable without establishing a BRAND, standing for quality in 'mobile testing' across the industry. Financials: We have projected revenues for the business from bottom up (based on customer acquisition strategy and pricing decision). We have validated this from Top Down approach (based the market size and assumptions on market share). The revenues are projected to be 238,000 US Dollars in the first year of operations increasing to about a 2,992,000 US Dollars in 5 years. Net profits are projected to be about 869,000 US Dollars by the 5th year. The business would break even operationally by 15 months. The investment required or the business is estimated to be 500,000 US Dollars over 24 months after which the cash generated by the business would be sufficient for further operations. This investment is expected to yield a compounded annualized return of 27% over 5 years.