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"CompetitoR" Defeating the Iphone 3G # 1 Introduction # 2 Business Case & Product launch Plan * 2.1 Strategic planning * 2.2 Tactical planning

X-Brands Presentation Baptiste Bassot

Introduction The Iphone 3G: Poised to conquer the world? Heavy Marketing & Buzz Beautiful telephone

Limitations in the Japanese markets No keyboard No predictive input No Felica (mobile-wallet) X-Brands Presentation Baptiste Bassot

Competitor's opportunity Cover Iphone limitations Open-source softwares (OS+applications), cheap & targeting general users and geeks Beautiful & cheap OEM handset, open development (partners in China)

X-Brands Presentation Baptiste Bassot

2.1 Strategic planning 2.1.1 Competitive stance Offer a better, cheaper phone, covering limitations of actual Iphone, marketed firstly toward geeks and Akiba-kei 2.1.2 Market strategy Cannot fight Apple Mktg machine, so use it. "same but better" handset, buzz on blogs... Handset offered through AU Kddi because not yet 3G and smartphone 2.1.3 Company strategy Source and co-develop smartphones tailored for Japanese/Asian markets 2.1.4 Product strategy Source cheap softwares from open source community, and let developers play with it: open architecture and free ecosystem. OEM handsets sourced & co-developed from China. Launch end of 2008 X-Brands Presentation Baptiste Bassot

2.2 Tactical planning 2.2.1 Product: Specifications and brand 2.2.2 Pricing: Price level & price policy 2.2.3 Promotion: Promotion expenditures & sales force 2.2.4 Distribution: Distribution channels & expenditures 2.2.5 Product development 2.2.6 Budget

X-Brands Presentation Baptiste Bassot

2.2.1 Product: Specifications and brand

Competitor: Better Iphone, making fun of Apple

Specifications: Same screen but: Larger with small keyboard sliding (12 keys) Felica chipset included X-Brands Presentation Baptiste Bassot

Only 1 model

2.2.2 Pricing: Price level & price policy

Competitor Iphone High-end Non-smartphone Blackberry

handset cost carrier bundle carrier to manufacturer Purchase price in shop 1500Y + 500Y/month ￥30,000 AU 2Y ￥23,000 ￥25,000 SB: 2Y min 2Y on all carriers ￥20,000 DCM: 2Y, corporate ￥30,000 cost ￥30,000

revenus

results at purchase After 1 year After 2 years After 3 years After 4 years

Quantity sold Year 1 Year 2 Year 3 Year 4

at purchase After 1 year After 2 years After 3 years After 4 years

￥24,000 ￥30,000 ￥36,000 ￥42,000 ￥26,400 Results 45,000 95,000 70,000 25,000

￥0 ￥270,000,000 ￥570,000,000 ￥1,398,000,000 ￥2,238,000,000 $20,345,454.55 (@110Y/USD)

X-Brands Presentation Baptiste Bassot

-￥6,000 ￥0 ￥6,000 ￥12,000 -￥3,600

2.2.3 Promotion: Promotion expenditures & sales force

Actions towards AU (Kddi) Fill gap in line-up: The smartphone for Japan In store representation: demos + on-screen

Actions toward community Insist on Open platform and deliver demos and products to geeks & blogs Start developing apps

Actions in General medias Smartphone for Japan and by Japan, Open and evolving -> press releases and AU com X-Brands Presentation Baptiste Bassot

2.2.4 Distribution: Distribution channels & expenditures

AU to be sole distributor To convince AU: demos of prototypes 50 handsets distributed & in rotation in shops (50 * 30,000 = 1,500,000 ￥ ) 50 small TV demos (50 * 30,000 = 1,500,000 ￥ ) 50 handsets distributed through internet to prescriptors (50 * 30,000 = 1,500,000 ￥ ) Joint Website (500 000 ￥ ) X-Brands Presentation Baptiste Bassot

2.2.5 Product development

Software & Hardware Use of open source OS & applications, native localization Development work limited (25,000,000 ￥ ) for integration & prototyping

Hardware sourced at low-cost on Iphone suppliers and other handhelds suppliers TouchScreen, Chipset, Keyboard, Felica, GPS

Subcontract production (scalable and flexible) Initial provisioning batch of 2,500 units (75,000,000 ￥ ) X-Brands Presentation Baptiste Bassot

2.2.6 Budget Budget Suppliers research Financing rounds Logistic costs distribution channels R&D initial provisioning

slides JPY USD (@120) ￥4,000,000 $33,333.33 ￥2,000,000 $16,666.67 ￥4,000,000 $33,333.33 2.2.4 ￥10,000,000 $83,333.33 2.2.5 ￥25,000,000 $208,333.33 2.2.5 ￥75,000,000 $625,000.00

TOTAL

￥120,000,000

Simple Income statements Gross profit (2.2.2) expenses financing costs (8%) Net profit

JPY Y1

Y2 -￥45,000,000 ￥45,000,000

USD

$1,000,000.00

-￥90,000,000 -$750,000.00

Y3

Y4

￥130,000,000 ￥360,000,000 ￥1,163,000,000 ￥14,000,000 ￥14,000,000 ￥14,000,000 ￥97,200,000 ￥18,800,000 ￥346,000,000 ￥1,149,000,000 $156,666.67 $2,883,333.33 $9,575,000.00

￥11,865,000 Financing needs

$750,000.00

NPV ROI

$8,746,668.91

10.87

X-Brands Presentation Baptiste Bassot