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MKTG 762: OPPORTUNITY ANALYSIS FINAL REPORT ESTIMATED SPECTRUM ADAPTIVE POSTFILTER ALGORITHM PREPARED FOR: UNIVERSITY OF BALTIMORE MERRICK SCHOOL OF BUSINESS.

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Presentation on theme: "MKTG 762: OPPORTUNITY ANALYSIS FINAL REPORT ESTIMATED SPECTRUM ADAPTIVE POSTFILTER ALGORITHM PREPARED FOR: UNIVERSITY OF BALTIMORE MERRICK SCHOOL OF BUSINESS."— Presentation transcript:

1 MKTG 762: OPPORTUNITY ANALYSIS FINAL REPORT ESTIMATED SPECTRUM ADAPTIVE POSTFILTER ALGORITHM PREPARED FOR: UNIVERSITY OF BALTIMORE MERRICK SCHOOL OF BUSINESS & NASA GODDARD SPACE CENTER PROFESSOR: DR. MICHAEL LARIC INVENTOR: DR. IRVING LINARES Lauren Chaney, Cathy Coreill, Phineas Deford, Nicholette Letersky CONFIDENTIAL

2 EXECUTIVE SUMMARY  ESAP: RETAINS PHOTO (JPEG) & VIDEO (MPEG) IMAGE QUALITY DURING COMPRESSION  COMMERCIALIZATION POTENTIAL?....YES!!!  REQUIRED INITIAL INVESTMENT: $2M  TARGET ROI: 20%  AVG IRR YEARS 3-7: 70%  5-YEAR NPV: $7M CONFIDENTIAL

3 WHAT IS ESAP?  INITIALLY DESIGNED BY NASA TO CLARIFY LOW BIT IMAGES OF FAR AWAY OBJECTS & OTHER ENVIRONMENTALLY CHALLENGING APPLICATIONS  ESAP IS AN ALGORITHM USED TO CLARIFY PHOTO (JPEG) AND VIDEO (MPEG) IMAGES THAT HAVE BEEN HIGHLY COMPRESSED IN ORDER TO CONSERVE MEMORY SPACE CONFIDENTIAL

4 TAKING THIS….. CONFIDENTIAL

5 AND TURNING IT INTO THIS….. CONFIDENTIAL

6 ESTIMATED SPECTRUM ADAPTIVE POSTFILTER  INVENTOR: DR. IRVING LINARES, NASA  OWNERSHIP: U.S. GOVERNMENT PATENT# 6,760,487 B1 JULY 6, 2004  ADEQUACY OF IP PROTECTION & THE NEED FOR ADDITIONAL PATENTS AND/OR COPYRIGHTS  UB, NASA & TECHNOLOGY INCUBATION CONFIDENTIAL

7 Why NASA developed ESAP  Environmentally challenging applications  Anticipated a need for digital enhancement technology CONFIDENTIAL

8 Technology Description  JPEG, MPEG, HDTV  Image Compression  Lossy vs. Lossless  Blurring & Blocking CONFIDENTIAL

9 INTELLECTUAL PROPERTY  PROTECTION  ADEQUACY CONFIDENTIAL

10 Intellectual Property Audit  Patent status  Ownership  Major claims  Copyright Protection  Commercialization  Open-policy licensing  Royalties vs. Exclusive Market Position CONFIDENTIAL

11 New Product Life Cycle Idea Screening Concept Tests Strategy Product Development ? Business Analysis…….. ESAP a commercially viable technology?? CONFIDENTIAL

12 Technology Incubation and the Transfer Process  Incubation: A brief description  UB’s partnership with NASA Goddard  Technology Transfer  Harvesting  Assessing  Patenting  Outreach (a.k.a Business Analysis)  Valuation & Negotiation  Partnering/Licensing  Monitoring  The Ultimate Objective CONFIDENTIAL

13 Triads Customer Technology Application Value Proposition CONFIDENTIAL

14 Triads CONFIDENTIAL

15 TRIADS (a.k.a. ideas for how the technology can be commercialized)  TOP 3 TRIADS  SURVEILLANCE CAMERAS  MAMMOGRAPHY  SMART PHONES  SWOT ANALYSIS  RESULTS CONFIDENTIAL

16 AND THE WINNER IS…..SMART PHONES!!! CONFIDENTIAL

17 SMART PHONE S.W.O.T. Strengths: Immensely popular and growing fast Gaining popularity as primary source for web access Gaining popularity as substitute for cameras Covers a wide range of demographics Global market Weaknesses: Loss of image quality when uploaded from phone to web ( , Facebook, You Tube) Operating speed of ESAP as firmware Camera quality not necessarily a driver of smart phone sales Difficult to determine cost of implementation Opportunities: Enhance quality of pictures and videos uploaded to the web from a smart phone Poor quality camera in most phones; strong desire for improved camera Firmware App Competitive advantage Tablets Threats: Fast-cycle market Diminished product life cycle Competitor algorithms exist on a commercial basis App market Multiple manufacturers & operating systems Low barriers to entry CONFIDENTIAL

18 INTENT  PARTNERSHIP WITH A LEADING MANUFACTURER OF SMART PHONES  5 YEAR EXCLUSIVE LICENSING AGREEMENT  COMPETITIVE ADVANTAGE  ASIC CONFIDENTIAL

19 FEASIBILITY  SUPERIORITY: COMPETITIVE ADVANTAGE  SECURITY: IS CURRENT PATENT GOOD ENOUGH?  SUBSTANTIATION: QUESTIONNAIRE CONFIDENTIAL

20 O.A.T.S.  O VERALL MARKET: 5.3B MOBILE PHONE SUBSCRIPTIONS IN 2010, EQUIVALENT TO 76% OF WORLD’S POPULATION  A DDRESSABLE MARKET: APPROXIMATELY 18%, or 940M SUBSCRIBERS USE MOBILE BROADBAND. IN 2010, 22% OF ALL MOBILE PHONE SALES WERE SMART PHONES; A 74% INCREASE OVER 2009  T ARGET MARKET: PERCENTAGE OF SMART PHONE USERS AGE 13+ WHO USE THEIR PHONE TO TAKE PICTURES IN 2010: U.S. – 52.4% EUROPE – 57.5% JAPAN – 63.9%  S HARE OF MARKET: APPLE INC. CONFIDENTIAL

21 Market share CONFIDENTIAL

22 APPLE INC.  IN 2010, IPHONE RANKED 3 RD AMONG GLOBAL SALES OF SMART PHONES million units  2010 MARKET SHARE %  SALES GROWTH %  RECENTLY PARTNERED WITH VERIZON IN U.S. CONFIDENTIAL

23 TARGET MARKET  CURRENT IPHONE USERS:  57% MALE, 43% FEMALE  91% WOULD RECOMMEND  50% PURCHASE AT LEAST 1 APP/MONTH CONFIDENTIAL

24 TARGET MARKET CURRENT AND POTENTIAL IPHONE USERS:  17 YEARS OR YOUNGER: 13%  18-24: 12%  25-34: 21%  35-44: 21%  45-54: 18%  55+: 14% CONFIDENTIAL

25 Secondary data…..OATS Overall Market: 2010 statistics show global mobile phone subscriptions totaled 5.3 billion; equivalent to 76% of the world’s population Addressable Market: Approximately 18%, or 940 million subscribers use mobile broadband In 2010, 22% of all mobile phone sales were smart phones; a 74% increase over 2009 Target Market: Percentage of smart phone users age 13+ who use their phone to take pictures in 2010: U.S. – 52.4% Europe – 57.5% Japan – 63.9% Market Share: ????????????????????????????? CONFIDENTIAL

26 3-s Superiority: ESAP can improve camera phone images Enhanced image quality reduces the need for a separate digital camera Simple to implement Cost effective Can provide a competitive advantage Security: Existing patent Ability to establish an exclusive licensing agreement with a particular manufacturer or operating system First mover to market Substantiation: Secondary data Primary data CONFIDENTIAL

27 Primary data - Questionnaire Do you currently own a camera phone? Yes 100%No 0% Do you use your phone to take pictures and/or videos? Yes 100% No, 0% Have you ever uploaded a picture and/or video from your cell phone to the web ( , You Tube, Facebook, Twitter, etc.)? Yes 86% No 14% If the answer to the previous question is yes, how often (check one): Less than 1 per month______ 27% 1-3 times per month______ 43% 1 per week______ 23% 1 per day______ 5% Multiple times per day______ 2% Is the quality of pictures and/or videos taken with your cell phone important to you? Yes 88% No 12% In general, are you satisfied with the quality of pictures and/or videos taken with your camera phone? Yes 75% No 25% Do you use your camera phone to capture more personal moments, such as family pictures, where image quality may be of more importance? Yes 29% No 71% Did the quality of your phone’s camera play a role in your decision to buy your phone? Yes 55% No 45% When buying your next camera phone, if you were told that a particular phone could take noticeably better pictures and videos (higher image quality) than other phones on the market, would this information influence your purchase decision? Yes 80% No 20% CONFIDENTIAL

28 QUESTIONNAIRE RESULTS  51 PEOPLE SURVEYED  100% OWNED A CAMERA PHONE  86% HAVE USED THEIR PHONE TO UPLOAD IMAGES TO THE WEB  80% WOULD BE INCLINED TO PURCHASE A PHONE THEY KNEW HAD A SUPERIOR CAMERA CONFIDENTIAL

29 Secondary data  Endless information on the cell phone industry and the growth of smart phones  Public companies with public information  Market surveys, usage statistics, demographics CONFIDENTIAL

30 CAPITAL REQUIREMENTS & FINANCIALS  INITIAL INVESTMENT: $2M  SALE PRICE: $0.10/CHIP  VARIABLE COSTS: $0.03/CHIP  FIXED COSTS: $1.25M  TARGET ROI: 20%  AVG IRR YEARS 3-7: 70%  5-YEAR NPV: $7M CONFIDENTIAL

31 ASSUMPTIONS  COSTS OF MANUFACTURING ASIC CHIP  CAPITALIZE ON APPLE’S PROMOTION  GROWTH PROJECTIONS NOT IN LINE WITH GROWTH TREND FOR IPHONE  FIGURES DO NOT TAKE INTO CONSIDERATION ESAP’s PRODUCT LIFE CYCLE AFTER EXPIRATION OF 5-YEAR EXCLUSIVE LICENSING AGREEMENT CONFIDENTIAL

32 CONTINGENCY PLAN  OTHER MANUFACTURERS  OTHER OPERATING SYSTEMS  APP MARKET CONFIDENTIAL

33 IRR CONFIDENTIAL

34 ROI CONFIDENTIAL

35 CASH FLOW CONFIDENTIAL

36 Positioning  ESAP will be marketed as a complimentary technology to the Apple iPhone. It will significantly enhance the quality of pictures and videos taken with the iPhone that are uploaded to the web. Most camera phones, because of their multi-use function, come equipped with low image quality cameras in order to conserve memory space. When an image is taken with a camera phone and uploaded to the web ( , You Tube, Facebook, Twitter), it is distorted due to compression and looks blurry, or pixilated. ESAP maintains image quality during compression, resulting in a much higher quality image when uploaded to the web. ESAP is an algorithm, therefore no additional hardware or applications are necessary for it to operate. We plan to license exclusively with Apple in order to offer consumers a camera phone that is unparalleled in image and video quality.  Explore developing an App for existing iPhone owners. CONFIDENTIAL

37 QUESTIONS?? THANK YOU!!! CONFIDENTIAL


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