PRACTICUM REPORT AUGUST 2005

PRACTICUM REPORT AUGUST 2005
Colm Buckley
Daragh Codyre
Carol Gavin
Eoin O’ Sullivan
MECT
MECT
MECB
MECT
99289881
99436914
54160341
54151554
Submitted for Completion of the Masters in Electronic Commerce
Supervisors:
Teresa Hogan
Gareth Jones
FIND IT@ Practicum Report August 2005
ACKNOWLEDGEMENTS
We would like to thank the following people for all their support throughout
this project:
Firstly our two supervisors Teresa Hogan (DCU Business school) and Gareth
Jones (DCU School of Computing) who provided us with encouragement and
guidance this summer. For all their time we are very grateful.
We would like to thank Des Laughlin who helped provide us with contacts in
the telecommunication industry.
We would like to thank everybody who took their time to participate in our
questionnaire including our fellow MECB/MECT students.
Declaration
We the undersigned declare that the project material, which we now submit,
is our own work. Any assistance received by way of borrowing from the work of
others has been cited and acknowledged within the work. We make this
declaration in the knowledge that a breach of the rules pertaining to project
submission may carry serious consequences.
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FIND IT@ Practicum Report August 2005
TABLE OF CONTENTS
ACKNOWLEDGEMENTS __________________________________________________________ 2
EXECUTIVE SUMMARY ___________________________________________________________ 6
1. INTRODUCTION _______________________________________________________________ 8
1.1 Mobile Commerce ____________________________________________________ 8
1.2 3G__________________________________________________________________ 8
1.3 Company Formation __________________________________________________ 9
1.3.1 Company Founders ________________________________________________________9
1.4 Mission Statement ___________________________________________________ 10
1.5 Concept Evaluation / The Service_______________________________________ 10
2. STRATEGY ___________________________________________________________________ 11
2.1 Value Proposition ____________________________________________________ 11
2.1.1 For End Users ___________________________________________________________11
2.1.2 For Mobile Phone Operators________________________________________________11
2.2 Business Model ______________________________________________________ 12
2.2.1 The 3G Value Chain ______________________________________________________12
2.3 Growth Strategy _____________________________________________________ 13
2.3.1 The McKinsey Growth Pyramid _____________________________________________13
2.3.2 Our Growth Strategy______________________________________________________15
2.4 Revenue Model ______________________________________________________ 16
2.4.1 Licensing_______________________________________________________________16
2.4.2 Suggested Pricing Model __________________________________________________17
2.5 Competitive Strategy _________________________________________________ 18
2.6 Competitive Analysis _________________________________________________ 18
2.6.1 Direct Competitors _______________________________________________________19
2.6.2 Indirect Competitors ______________________________________________________20
3. MARKETING __________________________________________________________________ 21
3.1 Market Feasibility ___________________________________________________ 21
3.1.1 Attractiveness ___________________________________________________________21
3.1.2 Trends _________________________________________________________________22
3.2 Demographics _______________________________________________________ 23
3.3 Technological Developments ___________________________________________ 23
3.4 Security and Privacy _________________________________________________ 24
3.5 Market Research ____________________________________________________ 24
3.5.1 Research Methodology ____________________________________________________24
3.5.2 Research Results _________________________________________________________25
3.5.3 Target Market ___________________________________________________________26
3.6 Licensee Marketing ____________________________________________________________ 27
3.7 Marketing Mix Decisions______________________________________________ 28
3.7.1 Product ________________________________________________________________28
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FIND IT@ Practicum Report August 2005
3.7.2 Promotion ______________________________________________________________29
3.7.3 Price __________________________________________________________________29
3.7.4 Place __________________________________________________________________29
3.8 PEST Analysis ______________________________________________________ 30
3.8.1 Political Factors _________________________________________________________30
3.8.2 Economic Factors ________________________________________________________30
3.8.3 Socio-cultural Factors _____________________________________________________30
3.8.4 Technological Factors _____________________________________________________30
3.9 Porters 5 Forces Analysis _____________________________________________ 31
3.9.1 Threat of Substitute Products _______________________________________________31
3.9.2 Competitors and Potential New Entrants ______________________________________31
3.9.3 Bargaining power of Customers _____________________________________________31
3.9.4 Bargaining power of Suppliers ______________________________________________31
3.10 SWOT Analysis ____________________________________________________ 32
3.10.1 Strengths ______________________________________________________________32
3.10.2 Opportunities___________________________________________________________32
3.10.3 Threats________________________________________________________________33
3.10.4 Weakness _____________________________________________________________33
4. TECHNICAL SECTION _________________________________________________________ 34
4.1 Introduction ________________________________________________________ 34
4.2 What are LBS? ______________________________________________________ 34
4.3 Positioning on a Mobile Network _______________________________________ 34
4.3.1 Introduction_____________________________________________________________34
4.3.2 Positioning Techniques ____________________________________________________35
4.3.3 FIND IT@ Positioning Techniques __________________________________________36
4.4 The FIND IT@ Platform ______________________________________________ 36
4.4.1 Processes and Time-line of Execution ________________________________________37
4.4.2 Obtain MSISDN _________________________________________________________38
4.4.3 Locate Device ___________________________________________________________38
4.4.4 Optimise Query and Obtain Destination Coordinates _____________________________38
4.4.5 Retrieve map and output it to the User ________________________________________38
4.5 Security ____________________________________________________________ 39
4.6 Testing _____________________________________________________________ 39
4.6.1 Code Testing ____________________________________________________________39
4.6.2 Online Remote Testing ____________________________________________________40
4.6.3 Verification _____________________________________________________________40
4.6.4 Simulation ______________________________________________________________41
4.7 Technologies Used ___________________________________________________ 41
4.7.1 MPS Emulator___________________________________________________________42
4.7.2 JML API _______________________________________________________________42
4.7.3 Ericsson MPC Map Tool___________________________________________________43
4.7.4 Mapping APIs ___________________________________________________________43
4.7.5 Java Servlets ____________________________________________________________44
5. FINANCING __________________________________________________________________ 45
5.1 Personal Funds ______________________________________________________ 45
5.2 Grant ______________________________________________________________ 45
5.2.1 Eligibility ______________________________________________________________45
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5.3 Cash Flow Forecast Analysis___________________________________________ 46
5.3.1 Total Sales and Income Vs Expenditure _______________________________________46
5.3.2 Cash Flow for 3 years _____________________________________________________47
5.3.3 Net Cash Flow per month (Excluding Venture Capital Injection) ___________________47
5.3.4 Sales Vs Expenses________________________________________________________48
5.3.5 Incomings for first 3 years _________________________________________________48
5.3.6 Sales for first three years___________________________________________________48
5.3.7 Sales per Quarter per Year _________________________________________________49
5.4 Venture Capital _____________________________________________________ 49
5.5 Important Ratios ____________________________________________________ 50
6. CONCLUSION _________________________________________________________________ 51
7. REFERENCES_________________________________________________________________ 52
Websites ______________________________________________________________ 52
Ireland on Line – www.iol.ie _______________________________________________ 52
Articles _______________________________________________________________ 52
Books _________________________________________________________________ 54
Appendix A – Questionnaire ________________________________________________________ 55
Appendix B – Irish Mobile Operators _________________________________________________ 57
Appendix C – Operator Wireless Internet Connection Fees: _______________________________ 59
Appendix D – Value Added Services Price Profile _______________________________________ 60
Appendix E – Financial ____________________________________________________________ 62
Appendix F - Questionnaire Results __________________________________________________ 71
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FIND IT@ Practicum Report August 2005
EXECUTIVE SUMMARY
The following document is a business plan for FIND IT@. FIND IT@ Ltd is a
mobile phone applications provider based on third generation mobile phone
technology (3G). FIND IT@ provides direction services based on Location Based
Services (LBS) technology. LBS provide the capability to find the geographical
location of a mobile device (such as a mobile phone) and then provide
information regarding local services based on the device’s coordinates. FIND IT@
uses this capability to provide a customer with a map from where they currently
are located to where they wish to go.
Third generation or 3G technology is set to revolutionise the worldwide cellular
telecommunications industry, turning a mobile phone device into a multimedia
device where users will become collective nodes on a network. High quality, high
bandwidth communications are quickly becoming available to all network users.
This is mainly due to massive investment by companies such as Vodafone who
are investing €1bn over the next seven years. Such investment has not scared
off competition in this lucrative market with mobile phone provider 3 only
entering the Irish market in late July 2005, nearly 10 years since the advent of
mobile phones to the Irish market. This heavy investment in network quality and
bandwidth has opened up a niche for in-demand services and our core product
FIND IT@ intends to cater for this niche. As the demand for real time information
grows the old saying of “time is money” becomes even more pertinent. FIND IT@
will facilitate time efficiency in both the business and personal lives of all 3G
mobile phone users. The Irish mobile phone market is vibrant with current market
penetration at 94% with the average revenue per user (APRU) standing at €48
which is €17 above the European average.
A questionnaire conducted on a sample size of 100 revealed that of the 57% of
people surveyed stated “other reason” for not using premium services on their
mobile. Three quarters of these said this was because there are no services of
interest to them. With this in mind 86% of respondents said they would pay for a
graphical map with location based services to be sent to their phone. Mobile
phone penetration in our surveys sample group was at 98% with 75% claiming to
have their handsets either always at hand or used in an hourly basis. This proves
both a definite demand and market that is willing to pay for such a service. Since
Ireland is often regarded as the perfect sample market, the possibility exists for
long-term international expansion of FIND IT@.
The technology LBS is based on, namely GPS, has been around for a while and
hasn’t yet found prominence in the mobile market. We believe this is because of
two main factors; Poor bandwidth of WAP and poor pricing structures for services.
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FIND IT@ Practicum Report August 2005
We believe that 3G will solve the problem of poor bandwidth and that our service,
combined with our customer-driven pricing structure will enable FIND IT@ to
dominate. Once we enter this market and gain a solid customer base, we intend
to develop our product to introduce new services that our customers really want
and not just ones that we want to invent. This mission coupled with our intention
to enter a number of new markets, will ensure that our products and company
will go from strength to strength. We intend to be the market leader and a
driving force on the Mobile LBS market for many years to come.
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1. INTRODUCTION
1.1 Mobile Commerce
Mobile commerce, or m-Commerce, is focussed on the applications and services
that are accessible from Internet-enabled mobile devices. This involves the
buying and selling of goods and services through wireless handheld devices such
as mobile phones and personal digital assistants (PDAs). Known as nextgeneration e-Commerce, m-Commerce enables users to access the Internet
without needing to find a place to plug in. The emerging technology behind mCommerce is based on the Wireless Application Protocol (WAP).
In order to exploit the m-Commerce market potential, handset manufacturers
such as Nokia, Ericsson and Motorola are working with carriers such as Vodafone
and O2 to develop WAP-enabled smart phones, and ways to connect them. Using
Bluetooth technology, these mobiles can offer fax, e-mail and phone capabilities
all in one, paving the way for m-Commerce to be accepted by an increasingly
mobile workforce.
As content delivery over wireless devices becomes faster, more secure, and
scalable, there is wide speculation that m-Commerce will surpass wired (or
traditional) e-Commerce as the method of choice for digital commerce
transactions. The industries affected by m-Commerce include:
•
Financial services, which includes mobile banking (when customers use
their handheld devices to access their accounts and pay their bills) as well
as brokerage services, in which stock quotes can be displayed and trading
conducted from the same handheld device.
•
Telecommunications, in which service changes, bill payment and account
reviews can all be conducted from the same handheld device.
•
Service/retail, as consumers are given the ability to place and pay for
orders on the fly.
•
Information services, which include the delivery of financial news, sports
figures and traffic updates to a single mobile device.
1.2 3G
3G is the generic term for third generation mobile phones. It provides a viable
means for m-Commerce to succeed.
Essentially, this involves introducing
broadband data speeds to mobile phones. These speeds will range from 114
kilobits per second (Kbps) to 2.4 megabits per second (Mbps). This will allow
users of 3G phones to download pictures and large email attachments, stream
music and video, play multiplayer computer games, and even videoconference
with other mobiles.
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FIND IT@ Practicum Report August 2005
1.3 Company Formation
FIND IT@ was formed in May 2005 and is based in Dublin. It was a spin off from
the Masters in E-Commerce program at Dublin City University. The group
consists of a mix of students with business and technology backgrounds.
1.3.1 Company Founders
Carol Gavin – B.Sc., M.Sc.: CEO
Carol Gavin is a graduate of B.Sc. in Computer Systems and M.Sc. in eCommerce. Carol has experience working in technology development at Boston
Scientific developing a key complaint analysis reporting system. She also worked
AIB in Manchester.
As CEO, Carol is responsible for the leadership of the company as well as
developing strategy and key alliances with possible distributors to grow the
business.
Colm Buckley, B.Sc., M.Sc.: Chief Marketing Officer
Having completed a B.Sc. in Information Systems Development in Dublin Institute
of Technology Colm worked for 18 months in McCann FitzGerald Solicitors as a
technology trainer and advisor. Having played a pivotal role in a technology
transition period for the company, he developed a keen interest in marketing new
software to system users he decided to further explore the field of e-Commerce
by studying an M.Sc. in e-Commerce in Dublin City University, excelling in
marketing and entrepreneurship.
As Chief of Marketing Officer, Colm is responsible for the development of major
customer relationships and the image and branding of the company.
Daragh Codyre B.Sc., M.Sc.: Chief Financial Officer
Daragh is a graduate in Business Information Systems Development from D.I.T
(Aungier Street.). He also receives his Masters in E-Commerce from DCU in
October 2005.
As Chief Financial Officer (CFO), Daragh is responsible for maintaining the
finances of the company in a good state. His work experience is the accounts
department of a small publishing company, making him qualified to manage the
finances of our company.
Eoin O’ Sullivan B.Sc., M.Sc.: Chief Operations Officer
Eoin completed a B.Sc. Computer Applications in DCU and graduated with
honours in 2004. He then undertook an M.Sc. in e-Commerce (Technical) again
in DCU, honing his skills in several areas such as Java programming, marketing
and entrepreneurship. He has plenty of work experience in the technological and
financial industries, having worked in the I.T. sections of both AIB and Irish Life
Investment Managers, making him the ideal candidate for Chief Operations
Officer.
As Chief Operations Officer Eoin is responsible for the directions in which the
software development takes. He is responsible for the design of the architecture
of the system and website maintenance, while keeping an eye on key technology
developments in the industry.
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1.4 Mission Statement
The mission of FIND IT@ is to design, develop and market a Location Finder and
Router for mobile phones with our end users in mind continuously. We will strive
for accurate and user-friendly applications that people will appreciate and pay for.
1.5 Concept Evaluation / The Service
Our Service is called FIND IT@. Mobile phones have become a commodity item
that many people use both for personal communication, web browsing and game
planning and as a business tool. Hence the reason people often say “I’m never
without it”. Our idea is to add more functionality to the phone by developing a
location finder. This is achieved on 3G mobile phones using GPS and Wireless
Internet technologies.
Our Service requires the customer to simply use the commands on the website
accessed on their mobile phone. “Find Me” simply gathers GPS co-ordinates from
the phone and shows the person where they are located on a map. “Get me to
Street Name” requests the customer to input a street name. Again a map with
their location highlighted is returned and the destination and shortest route are
also highlighted clearly for the customer.
The interface is kept extremely simple but the Service is very effective and
useful. Our research has shown there is a demand for this product and is only
the first step in the type of services that will be made available due to the
location functionality on the phone.
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2. STRATEGY
2.1 Value Proposition
2.1.1 For End Users
In Ireland the majority of people carry a mobile phone with them at all times
when they are travelling. Our service FIND IT@ guarantees to find your location
and offer you the fastest route to your destination in an extremely fast and userfriendly manner through your 3G mobile phone.
•
•
•
This is convenient for users as they are likely to have a mobile phone
(which is a light weight portable device) with them when are in are lost or
on seek their immediate location.
The use of LBS allows for a more personal interaction.
The product is relevant; giving the user only the information they need
and simplifies a difficult situation for the user by locating them.
2.1.2 For Mobile Phone Operators
This is an excellent opportunity for mobile phone operators to earn revenue from
a value added premium service that people are genuinely interested in and
enthusiastic about. After the high costs of 3G licences, it is paramount that
operators generate revenue from the type of services that are only available on
3G phones. The majority of value added service revenue is coming from the
entertainment industry. This includes the downloading of content such as music,
games and videos.
Our service offers mobile phone operators the opportunity to generate new
revenue and expand its market base from the younger (14-25 year olds) group
who are the main source of value added revenue to the older age groups in the
market who are interested in our service and on average are willing to spent
more on the service, as they see it as one of high value.
This service will also appeal to business customers who travel a lot. Businesses
falling into this category include those with large sales teams, motor bike/bicycle
couriers, repairs and services including fitters, plumbers, painters, decorators and
electricians. Inability to find your clients location can mean a loss of valuable
revenue and customer patience.
The outsourcing of the development and maintenance of this service will be done
by FIND IT@ decreasing the risk that operators would take upon themselves by
developing it in-house and the financial burden to do so.
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2.2 Business Model
Mobile communications are on the cusp of the next big step; promising new
applications and services that will change the way people live and work. The
business challenge is develop services that customers will pay for. We believe
FIND IT@ offers a premium service to customers that people will value and are
willing to pay for.
2.2.1 The 3G Value Chain
In the value chain, our company falls under the Application Development and
Publishing Aggregator categories. Our focus for the company is on providing
accurate location based services. Our core service is focused on one type of
content that is locating people with mobile phones, their destination and offering
the shortest route between. This is a personal, real-time service. Our alliances
and partnerships with other members of the value chain will be crucial for the
company’s success.
Research has shown the revenue generation by the mobile phone industry is
growing steadily for Content and Application Providers or Aggregators. The
following bar chart shows this growth as documented in Telephony magazine,
October 15 2001.
Between 2001 and 2005, the percentage of revenue
distributed within the wireless services value chain grew for Content and
Application Providers or Aggregators from 11% to 22% (Double Growth).
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FIND IT@ Practicum Report August 2005
Expected Wireless Services Revenue Distribution 2001 2005
2005
2003
2001
0%
22%
17%
17%
11%
30%
16%
13%
20%
35%
43%
40%
Content & Application Providers
Wireless Operators
Delivery Platforms & Applications
60%
15%
17%
15%
18%
15%
19%
80%
100%
Portals and Access Providers
Support Services
2.3 Growth Strategy
2.3.1 The McKinsey Growth Pyramid
McKinsey Growth Pyramid
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The model outlines seven ways of achieving growth, which are summarised
below:
Existing products to existing customers
This is the lowest-risk option; try to increase sales to the existing customer base;
this is about increasing the frequency of purchase and maintaining customer
loyalty. We envisage that mobile operators will see our service as an aid to
developing their customer base, hence generating a need for our service.
Existing products to new customers
Taking the existing customer base, the objective is to find entirely new products
that these customers might buy, or start to provide products that existing
customers currently buy from competitors. This will not be part of our strategy.
New products and services
This is taking a risk by developing and marketing new products. Some of these
can be sold to existing customers – who may trust the business (and its brands)
to deliver; entirely new customers may need more persuasion. By licensing our
service we will be able to sell our services through mobile operators portals and
on their brand name.
New delivery approaches
This option focuses on the use of distribution channels as a possible source of
growth. Are there ways in which existing products and services can be sold via
new or emerging channels which might boost sales? The development of new
technologies in the telecommunication industry enables us to deliver our service
quickly.
New geographies
With this method, businesses are encouraged to consider new geographic areas
into which to sell their products. Geographical expansion is one of the most
powerful options for growth – but also one of the most difficult. We believe that
alliances with the large mobile operators here in Ireland will be an excellent base
for new growth and expansion into countries where they have networks already in
operation.
New industry structure
This option considers the possibility of acquiring troubled competitors or
consolidating the industry through a general acquisition programme. In time with
the expansion of our company we may decide to acquire similar companies or
move horizontally along the value chain and possibly develop content ourselves
(i.e. mapping technology).
New competitive arenas
This option requires a business to think about opportunities to integrate vertically
or consider whether the skills of the business could be used in other industries. It
will be important for us to also develop a presence online. Growing our business
vertically through use of other user-end technologies such as PC, PDAs etc.
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2.3.2 Our Growth Strategy
Phase One
Initially, we intend to encourage mobile operators to use heavy advertising to
attract new customers when our service is first launched. At this stage, they will
be trying to sell our service to their existing customers. It is important in the
early stages of business to attract as many customers as possible. This will be
done based on our one main service, the FIND IT@ initial service. We foresee
this stage to last 1 to 3 years. In this time, we will vary our pricing and use
various other methods to attract new licensees. Towards the end of this time
period, we will begin to invest heavily in research and development to facilitate
the next phase of our service. We will also be conducting significant research into
what our customers want from our service. This research will be invaluable to
our development of new functions and possible “Spin-off” products.
Phase Two
The second phase will see different functions and abilities added to the basic
service. In essence, we will be trying to sell a new service to existing customers.
We will also be trying to attract new customers but only a small percentage of
resources will be used for this. Resources will be shifted towards trying to raise
awareness of the new functions and how to use them.
Possible service
improvements include:
•
•
A similar application to the current one that is more suited to driving and
directing drivers to their locations. This service would require various
abilities like voice directions.
Dedicated service to locate dealers or outlets for any particular company
or organisation.
We believe other possible features and applications will become apparent from
the customer feedback received over the years in operation. Although the
company will continue to move forward, we believe that this period will continue
in some form an arbitrary length of time because we feel that innovation and
development of new services and services will be our key strength. This strength
will facilitate the growth of the company into phase three.
Phase Three
The next step for the company will be to expand into other regions. As previously
mentioned, geographical expansion is one of the most powerful options for
growth but also arguably the most difficult and expensive. This phase will occur
over a number of years and in a gradual manner. The major European capital
cities will be the obvious initial destinations, most likely starting in the U.K. A
longer term goal would be to expand to the highly populated cities of Asia and
also the U.S.A. This expansion strategy will require significant funding so a
gradual expansion, with the money made in each new market funding the next
expansion to the next city.
Phase 2 and Phase 3 will not proceed in a linear fashion. We envisage phase 3
beginning a mater of 6 months to 18 months after phase 2 begins and the two
would continue concurrently. This would be an intricate operation and the timing
and funding requirements would need to be accurately mapped out.
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2.4 Revenue Model
It is possible that we could market and distribute the service ourselves. The
greatest challenge in doing so will be to develop brand awareness, as we have
none. This would be quite difficult in current market conditions. One of the more
feasible options would be to licence our service.
2.4.1 Licensing
By licensing to other mobile phone operators it would allow us to grow as a
company and finance our development of the service. Licensing is the process of
leasing a legally protected (that is, trademarked or copyrighted) entity known as
property which could be a name, likeness, logo, graphic, saying, signature,
character or a combination of several of these elements, in conjunction with a
product or a product line.
It would enable us to work with large experienced companies and gain instant
market place exposure. Nowadays all major companies licensing a significant
marketing tool. One could even say that it has become one of the most powerful
contemporary forms of marketing and brand extension and that it is being used in
ever increasingly sophisticated ways. Licensing is usually based on a contractual
agreement between two business entities: the owner or agent of the property,
also known as the licensor and the renter of the rights, and the prospective
licensee who is usually a manufacturer. In this case, the licensees are the mobile
phone operators with portal pages that advertise their services.
At this stage of development it would be impossible to estimate the licensing fees.
However it is most likely to be an initial lump sum agreement, with maintenance
fees and a share in the revenue generated by our service. The expected share in
revenue would be approximately €0.20 for each connection. This is about 20% of
the revenue generated after VAT. Licensing to large mobile phone operators
would mean that there would be a great expenditure for the marketing of the
service. We would set limits on such details as use, geographical area, markets
served, and time frame so to free the service again to future licensees.
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2.4.2 Suggested Pricing Model
User Charged
Under this model the user is charged one single fee for the transaction, this is
regardless of the length of time they spend online. The user must however pay
their service provider for the amount of time they spend on the web or amount of
bytes downloaded (This will vary depending on the service provider and the type
of package the customer has with the service provider.). The connection fee is
deducted from the user’s mobile phone bill/credit arrangement.
This charging scheme is already extremely popular with other entertainment
service providers in the mobile phone industry who have been very successful in
the last number of years. (Entertainment services provide 19% of revenue
generated from mobile phone use.) Mobile phone users are already familiar with
how this charging scheme works also. The following chart shows per event
charge as the most likely method of charging customers.
From our research we found that people in the 15-24-age bracket were not willing
to any more then 35c. This is a similar to the cost of a multi media message.
Our research (both primary and secondary) found that many of the people in this
category were also the least price sensitive of all groups. In fact when conducting
our research we found that the majority of value added services (in this case
entertainment downloads) averaged €3.00 to €4.00. (See Appendix D - Value
Added Service Price Profiles.) The majority of respondents in this age category
have difficulty estimating the amount they spent on these services.
However the majority of people older then 24 were willing to pay more then €1.
This reconfirmed our earlier expectations of our target market.
From our
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FIND IT@ Practicum Report August 2005
research we decided that each connection would cost €1.25 (This is including VAT
at 21% €0.2625)
In our research we have identified that some customers may find this service
very useful for their work and we have developed a pricing scheme that caters for
business users of the service. These customers will be able to subscribe through
our website or by calling us and arrange to purchase the appropriate bundle for a
set monthly fee.
The pricing scheme is as follows:
Bundle 20 Light (Use less then once a day)
• Monthly Fee: €22 per user i.e. 20 @ €1.00 per transaction
• No. of Transactions included: 20
• Thereafter, average fee per transaction: €1.05
Bundle 50 Medium (Use twice a day)
• Monthly rental: €41 per user i.e. 50 @ €0.82 per transaction
• No. of Transactions included: 50
• Thereafter, average fee per transaction: €0.88
Bundle 100 Heavy (Use 4 times a day)
• Monthly rental: €60per user i.e. 100 @ €0.60 per transaction
• No. of Transactions included: 100
• Thereafter, average fee per transaction: €0.64
Use is based on the average number of working days in a month
All prices are inclusive of VAT
This pricing scheme may be used for businesses with multiple users. This means
a business can register a number of mobile phone numbers and purchase bundle
packages to suit. This will be limited to a maximum number of phones to a
particular bundle package.
2.5 Competitive Strategy
Our competitive strategy is very focused and differentiated. We have a highly
developed marketing focus and our ability to offer full marketing consultation with
the licence purchase will be the main source of differentiation from more
generalised competitors. Our unique personalised service to the licensees that
consists of a continuous communication with our business and technology
developers will enable us to build strong relationships with our licensees and
further tailor our service to their specific needs. This flexibility is another key
element of our differentiation. We have a strong coordination between our R&D,
service development and marketing departments, which will be one of the main
strengths of our organisation.
2.6 Competitive Analysis
The following four companies are the current mobile phone operators in Ireland:
Vodafone, O2, 3 and Meteor. See Appendix B for company fact files. As of yet
none of these companies offer Location Based Services.
Although these
companies are potentially our first target market, if they decide to develop
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Location Based technologies themselves In-House, it will lead to them being our
competitors for they will be competing for our target market.
2.6.1 Direct Competitors
At a global level there are several telecommunication companies who are offering
or developing Location Based services. As of yet the main focus for many of
these companies are on nanny and security services e.g. tell me where my child
is?
NTT DoCoMo
In 1998, NTT DoCoMo launched the Ima-DoCo ("now where?") service, which
acquires location information using PHS terminals. This service utilises radio
waves periodically transmitted between PHS terminals and base stations to
calculate the location of users. The service is capable of calculating a user's
location within a 100m to 500m radius.
Users can confirm their location 24 hours a day on a map in i-mode's browser, on
a PC connected to the Internet, or on a map printed out from a G3FAX.
This service is being applied to a broad range of uses, such as to confirm the
location of children and the elderly, and as a theft counter-measure for
automobiles and motorcycles.
M-Spatial
M-Spatial is a UK based company. Their product is called MapWay. They have
recently teamed up with Vodafone Live in Germany opening up a potential client
base of 3.5 million people.
Nokia
Nokia's mPosition™ solution provides operators with a standards-based (3GPP),
evolutionary solution that allows for the introduction of a differentiated Mobile
Location Services. Austrian mobile network operator ONE and Shanxi Mobile
Communication Company of China are already strategic partners using mPosition.
Nokia is a very strong brand name in the Telecommunications industry. However
the One service is limited to location information such as “Where is the nearest
live/free event”, “Where is the nearest emergency service/Chinese restaurant”
etc.
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FIND IT@ Practicum Report August 2005
www.mappy.com
Launched in 1987, Mappy is published by Mappy, a subsidiary of Wanadoo /
France Telecom. This service is accessible on web-enabled phones. It is a route
planner service rather then an interactive service. However when attempting to
use this service as part of our research on our mobile phones we found it to be
unsuccessful.
ViaMichelin
Set up at the end of 2000, ViaMichelin design and develop various travel
assistance aids, including a route planner web site, find hotels, restaurants,
garages etc. They also develop navigation systems for PDAs. Prices for this
software start at approximately €199.00.
Microsoft and AT&T and Wireless
The strategic alliance between Microsoft and AT&T Wireless was announced in
July 2002. AT&T wireless is one of the largest American Telecommunication
Companies and Microsoft is the largest software cooperation inn the world. They
combine .NET, XML and real-time location data from AT&T Wireless to bring
MapPoint. Their media press releases again point towards the following services:
ability to locate colleagues with other functionality, such as the ability to obtain
maps and driving directions, conduct proximity searches, and find destinations or
points of interest, such as store or customer locations near ones own or a
colleague’s position.
2.6.2 Indirect Competitors
Navigation Systems
Portable navigation systems are available to buy in Ireland. Prices start at
approximately €500 with average life or 4 hours after charging. Such navigation
systems are bulkier than mobile phones, expensive for infrequent users and
obviously not carried around with users all the time. It is unlikely that they would
appeal to our target users.
Maps
Maps cost approximately €7.99 (Ordnance Survey). Some maps may require that
the user has extra knowledge (e.g. compass - Which way is north etc.). Paper
maps are often bulky, hard to use when walking (often need to be spread out
over a table etc) and they rip easily. As with navigation systems people do not
carry them around at all times.
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FIND IT@ Practicum Report August 2005
3. MARKETING
3.1 Market Feasibility
3.1.1 Attractiveness
Currently there are no service providers offering a location based or mapping
service in Ireland. There are, however, various companies offering similar
services in other countries.
The introduction of high bandwidth 3G networks has significantly increased the
potential of Location Based Services (LBS); the rollout of location-based services
could potentially create a significant return on bandwidth investment by the
delivery of precision tailored user data services. LBS can assist in personal and
commercial route planning as well as everything from personnel and asset
tracking to emergency assistance tracking. LBS provide service providers a
unique opportunity to build a close relationship with its customers while offering
customers target real time information on demand.
With the imminent take off of 3G technology over the coming months we wish to
be the first in Ireland to take advantage of these emerging networks and to work
with the mobile service providers to offer top class. One such service provider
that is new to the Irish market is the Hong Kong based communications giant 3.
3 is coming to Ireland with the following intention “We aim to shake up the
mobile market by offering amazing value and great network coverage”. Such a
combination of real value for money and guaranteed network coverage is
unprecedented in the Irish market. Currently service providers such as Vodafone
have been the first operator to launch their 3G network offering services such as
video alerts of final scores of GAA matches as well as full track music download.
“The vast majority of Irish mobile phone users would be lost without their
handsets, and most agree that mobile-based ads are more effective than Internet
ads”
These are just two of the findings of a survey commissioned by Irelands new
Mobile Marketing Forum (MMF) of 1,500 Irish mobile phone users aged 13 to 70
released on October 5th 2004. Other interesting results of the survey show that
over three quarters or respondents said they would be lost without their mobile
phones and two thirds of respondents found mobile phone advertising more
effective than web advertising.
Not only do these statistics increase the
attractiveness for providing information services via mobile phones but it also
suggests there is a potential for revenue via advertising within a the service
provided.
There is no doubt that 3G is here to stay and Vodafone are fully committed to
competing against the likes of Three and future competitors. This was seen at
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FIND IT@ Practicum Report August 2005
the launch of its five 3G pre-paid handsets in June 2005 when Teresa Elder,
Vodafone Chief Executive, commented:
“Our aggressive rollout, which will see us investing €1billion over a seven year
period positions us at the cutting-edge of 3G development in Ireland”
We believe that Service providers do not have the knowledge or ability to truly
satisfy their customer needs and see the future of 3G as being via third party
services providers with each particular service being tailored for a niche and being
truly up to date and in real time. This inability to convince the market demand
can be seen where in Off-Carrier services such as Jamster having gained a huge
customer base of over 5,000,000 in the UK and German markets. (Source
Jamster website)
3.1.2 Trends
The Irish mobile phone market penetration rate is only 4% off the European
average of 98% and currently stands at over 94% (Baskerville and ComReg
Estimates) based on a CSO population figure of 4.04 million. The mobile market
is a healthy, active market with approximately 3.78 million mobile subscribers at
the end of December 2004, representing a 380,000 increase on the December
2003 figures. Other interesting statistics revealed by a ComReg Quarterly Review
Questionnaire, reveals there were approximately 1.014 billion text messages sent
in the last quarter of 2004. The four quarters of 2004 represent a 22% increase
in the volume of text messages sent. This increase is graphed below.
Number of SMS sent Q1 '00 - Q4 '04
1200
1000
800
Millions
600
400
200
'0
4
Q
3
'0
4
Q
1
Q
3
'0
3
3
'0
Q
1
'0
2
Q
3
'0
2
Q
1
Q
3
'0
1
1
'0
Q
1
'0
0
Q
3
Q
1
'0
0
0
Quarter/Year
The most significant statistics from the Yankee Group are in relation to the APRU
(Average Revenue Per User) of Irish mobile phone operators. Irish mobile phone
operators APRU, when compared to their European counterparts, are second
highest standing at an estimated €48 per month. This figure is well above the
European average of €31.
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FIND IT@ Practicum Report August 2005
European ARPU Compared in €
ARPU
U
Fr K
an
Fi ce
nl
a
N nd
or
wa
y
Sw Irel
a
itz nd
er
la
nd
Sw
e
G de
er n
m
Po any
rt
D uga
en l
m
ar
k
Ita
G ly
re
Av ece
er
ag
Sp e
ai
N Au n
et st
he ria
rla
n
Be ds
lg
iu
m
50
45
40
35
30
25
20
15
10
5
0
The writing is already on the wall since the launch of 3G in Great Britain and
according to the British based company the Carphone Warehouse, 3G is taking
the mobile market by storm. There are four domestic British operators now
offering 3G services and it is estimated that 20% of all mobile phone sales are for
3G handsets.
3.2 Demographics
A survey by ComReg revealed of 78% of the 1000 participants use pre paid
mobile phones. An overwhelming 95% of these pre paid phone users were in the
15–24 year old age range (Source: Trends Survey Series –Wave 1, April 2005).
In the same questionnaire interviewees were asked of their awareness and
willingness to subscribe to 3G services in the near future. In total, 38% of
respondents were aware of 3G mobile phones. Crucially for the penetration of 3G
services, the awareness was highest among 15–24 year old age range (59%).
The reason this is crucial for 3G penetration is that this age group is more likely
to experiment with 3G services with 22% of 15–24 year olds stating they have
used the Vodafone live service. Of those who were aware of 3G, 18% said they
were likely to purchase a 3G phone in the next three months. Another significant
revelation is that 15–24 year olds make up roughly half of the market for services
such as Vodafone live. In summary, the relatively young demographic profile of
the Irish market and the rich widespread use of SMS services would indicate
there is a receptive market for content rich mobile services in the future.
3.3 Technological Developments
The enabling technology is 3G, which is basically third generation mobile network
technology. 3G wireless networks have an average data transfer speed of
between 64Kbps and 384 Kbps, this is an impressive development when it is
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FIND IT@ Practicum Report August 2005
compared to common wireless data speeds that were often slower than that of a
14.4Kb modem. With 3G networks expected to be able to reach speeds of more
than 2Mbps tomorrows dream of proper high–speed mobile Internet access may
not be too far off. These developments are changing both the perception and the
roles that mobile phones play in today’s society.
3.4 Security and Privacy
For many users, their location information can be a major issue for reasons such
as:
•
•
•
•
•
Target marketing: Mobile users' locations can be used to classify
customers for focused marketing efforts.
Embarrassment: One customer's knowledge of another's location may lead
to embarrassing situations.
Harassment: Location information can be used to harass or attack a user.
Service denial: A health insurance firm might deny a claim if it learned
that a user visited a high-risk area.
Legal restrictions: Some countries regulate the use of personal data.
For these and other reasons, users must know when their location is given to an
application. According to The Directive on Privacy and Electronic Communications
(2002/58/EC) the provision of value added services based on location and traffic
analysis is permitted subject to the consent of the subscriber. So this simply
means that it will be in the terms and conditions of our customers’ contract that
their location will be noted and used for, and only for, the execution of the
services we provide.
3.5 Market Research
3.5.1 Research Methodology
Primary
Our primary research consisted of a questionnaire for potential customers
to our service. This questionnaire was aimed at finding out (based on a sample
size of 100 users) the frequency with which people used their mobile phones
if indeed they owned one. It also questioned whether or not users were using
their phones to their maximum capabilities in relation to downloads and other
services such as ringtones and tried to gauge how much, on average people
paid for these services.
Finally the questionnaire queried the interest of
people in specific location based services that may be offered and asked
them how much they would be willing to pay for such a service. We also hope to
conduct interviews with people in the telecommunication industry.
Secondary
Given the nature of our service much of our research was web based
using sites such as the CSO and ComReg for mobile phone and population
statistics. Our web searches also included reports and whitepapers on 3G and
location based services technology.
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FIND IT@ Practicum Report August 2005
3.5.2 Research Results
Out of a survey of 100 people the following are some of the most significant
results that help us form the basis of some of our marketing decisions. Proof of
the Irish mobile phone penetration rate mentioned earlier surfaced with 98% of
respondents having mobile phones. From this only 40% have used premium
services with 37% having downloaded ringtones or games. The first interesting
statistic that we encountered was when asked as to why respondents have not
availed of premium services 17% said it was too complicated, 26% said was too
expensive and 57% gave other reasons. The fact that only 26% said the services
were too expensive would suggest the market, to an extent, is insensitive to
paying a slightly higher price for a service. Of the 57%, that gave “Other” as
being the reason for not using premium services, three quarters gave, as the
reason they were asked to specify, as being there were no services they found
useful.
Too Complicated
17.00 / 17.0%
Too Expensive
Other
26.00 / 26.0%
57.00 / 57.0%
Q. If you have not availed of premium services, why?
With this statistic in mind I will now refer to the results of question 15 of the
survey where participants were asked to rate their interest in features on a scale
of 1 – 5 where 1 represents extremely uninterested and 5 represents very
interested. The averages of this section are seen below.
Fig A - Find your location on a map of a city
Minimum
Maximum
Mean
Std. Deviation
1
5
3.53
1.095
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FIND IT@ Practicum Report August 2005
Fig B - Would you like to get the shortest path from your location to a
destination of your choice
Minimum
Maximum
Mean
Std. Deviation
1
5
4.02
1.166
Fig C - Get information on Interesting attractions in your vicinity such as
tourist attractions.
Minimum
Maximum
Mean
Std. Deviation
1
4
2.66
1.139
Fig D - In the case where you have a business meeting, have them send
you a map of their location
Minimum
Maximum
Mean
Std. Deviation
1
5
4.35
1.104
As we can see in Fig B and Fig D above, there is a demand for the services
mentioned. With a highest possible score of 5 we can see that, with the mean
scores of 4.02 and 4.35 for the services offered in Fig B and Fig D respectively,
there is indeed a real demand for such services. These scores, coupled with the
fact that three quarters of the 57% who said they didn’t use premium services
because they didn’t believe any services offered were useful further enhances our
belief in the demand for our service. In the case of the services offered in Fig A
and Fig C the mean rating for the demand for these is slightly lower. The reason
for this is that these services are more likely to appeal to tourists within a city
and thus such a demand is not seen in this survey. The positive responses in Fig
B and Fig D also suggests that our service will appeal not only to business
customers but also to individuals who just wish to get from A to B with minimum
hassle. Finally, 86% of all participants said they would pay for one or more of the
services mentioned in Fig A – D with the majority of respondents willing to pay
between €1 and €2 as seen below.
Amount Willing To Pay
Cents
5
20
Bill
Pre–Paid
25
30
35
40
5
3
3
50
80
8
2
2
6
6
6
100
200
250
300
3
5
4
3
22
13
3.5.3 Target Market
Our market research clarified our presumptions on our target markets, revealing
that over 25% of our respondents that were between the age of 15 and 25 said
they always had their phone at hand. A further 15% of the respondents were
also in this age group and said they used their phone on an hourly basis. 35% of
respondents were in the age groups of 25–34 and 35–44 all of whom said their
phone usage was either always at hand or on an hourly basis. From this we can
conclude that we have two well defined target markets namely: firstly 15–24 year
olds both students and young professionals who are most likely to use our service
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FIND IT@ Practicum Report August 2005
in a sociable fashion and secondly professionals between the ages of 25 and 44
who are likely to use our service for both business and personal use.
According to recent CSO statistics our target market is roughly 1.9 million
persons or nearly half of the population. Second only to our target market of 24–
35 year olds, the age group of 0–14 year olds has 0.82 million people this
ensures there are a large amount of young, technologically apt potential
customers coming into our target market over the next 5 years. In an interview
with an individual who only wants to be referred to as a Vodafone store manager,
we were only able to get the following details due to the fact that Vodafone have
specifically stated they do not wish to have handset sales figures known by the
public or indeed its competitors.
Given a target market of 1.9 million people, with mobile phone penetration at
94%, our realistic market size is 1.78 million people. According to our Vodafone
source people change their handsets on average every 16 months so, out of our
1.78 million realistic market size, its fair to say 446,500 people will change their
handsets in the next 4 months. Finally, our source stated that “between 50%
and 70%” of recent sales are for 3G handsets. This would imply that (using the
mean figure of 60% 3G sales) there would be 267,900 people in our immediate
target market of 15–44 year olds in the next 4 months alone. This figure is
conservative and looking ahead a further 4 months we will encounter the
Christmas market, which will expand the market size even further again.
Tourists
According to statistics released by the CSO on June 5th 2005 333,500 visitors to
Ireland last March came from Great Britain (Source CSO, Visits to Ireland Estimated No. of Overseas Visits 2000 - 2004). This figure, when combined with
the APRU figures for Great Britain seen earlier in the “European ARPU compared
in €” diagram (€34) and the high uptake of 3G handsets would suggest a
likelihood that visitors from Great Britain would be likely to avail of such content
rich services.
Business Customers
We have identified a particular target market that will use our service on a
regular basis to aid their work. The loss of revenue due to not being able to
locate your client is not only frustrating but also for many self-employed it means
they are losing valuable profit. Our service offers these business customers a real
Return On Investment. If by using our product they find they are at a clients
location 20 minutes earlier than if they were without our service they could easily
make from €20.00 plus income. Businesses falling into this category include
those with large sales teams, motor bike/bicycle couriers, self-employed, repairs
and services people including fitters, plumbers, painters, decorators and
electricians.
3.6 Licensee Marketing
During our research into 3G add on applications we discovered that the 2
main 3G service providers, namely Vodafone and 3 supply several services
at a range of prices to their customers. 3 for example supply Sky Sports
top stories free of charge to their customers and offer a wide range of services
including extreme sports videos at a cost of €1 per video.
Services are
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FIND IT@ Practicum Report August 2005
advertised by mobile phone service providers via their portal pages. These
services are made possible by companies such as Sky Sports entering into a
license agreement with 3 or Vodafone whereby the mobile phone service provider
pays for the provision of such services. In our market research we have proven
there is a demand for these services and it is our aim to use these statistics to
forge alliances with 3 and Vodafone and enter into license agreements with them
to offer FIND IT@ as an add on service to their customers. It is in the same
manner that we will approach O2 and Meteor prior to the launch of their 3G
networks over the coming months.
In approaching future licensees the following activities will have to be conducted.
Firstly we must arrange to meet with representatives from the various mobile
service providers. We intend to do this via personal contacts that already exist.
With high levels of competition in the market, service providers will be eager to
offer their customers high quality value added services. Marketing to the licensee
will require full and detailed documentation of the service backed up by our
research. Our presentations to the prospective licensees will highlight all of our
research and underline the critical success factors of our service in accordance
with the documentation. The promising development of our relationship with the
mobile service operators will be enhanced by the fact that each portfolio of our
services will be specifically tailored to the mobile phone service operators’ needs
and requests.
3.7 Marketing Mix Decisions
3.7.1 Product
FIND IT@ was decided as the name of our product as it both easy to remember
and self-descriptive. We plan to use our product logo to help build brand
recognition by making strategic alliances with groups that will be in contact with
sections of our target market such as Bord Failte and the Dublin Airport Authority
for tourists, Dublin Bus for general customers.
This logo would appear in literature and advertisements of such parties including
the literature of our licensees. As mentioned, our primary focus during product
development is on ease of use and total quality, these characteristics are clearly
evident in our product.
The FIND IT@ application is based on real user needs and has a turn-key service
which has all the characteristics necessary for a successful mobile data service:
•
•
•
It fulfils an unmet need - Our market research has revealed that 68% of
people would prefer to use their phone to find their way around than a
traditional paper street-map.
People are prepared to pay to use it - the same research revealed that 8
out of 10 mobile phone users would pay a premium to use such a service.
It is simple and easy to use – FIND IT@ was designed and developed in
close co-operation with end users every step of the way. The result is a
mobile data service that is set to replace traditional paper street-maps as
the preferred means of pedestrian navigation in urban environment.
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FIND IT@ Practicum Report August 2005
Other critical success factors for Location based that are addressed by our
systems are:
• Handle unavailability of services gracefully. There are many reasons why
the user's location may not always be available such as: The device is cut
off from any of the location methods it supports, in a tunnel or on an
airplane for example. On reconnection to the service an appropriate
message will be transmitted to the user’s handset.
• Depending on the method used, determining the location may take a long
time. The delay may be so long that the end result isn't useful. Where
such delays are encountered our customers are kept informed of the
reasons for any such delays.
• Be sensitive to privacy concerns especially when it comes to telling
customers about the information being collected on them and how it will
be used. Only information necessary to performing the desired task will
be taken from the user’s handset, this information will then be discarded.
Also, location information will be protected while within our systems so
that unauthorised people cannot access it.
3.7.2 Promotion
While FIND IT@ is itself a third generation mobile phone product we are still
adopting a traditional approach to introducing the service to the market. We
would advise initial promotion of our service to involve radio commercials and
billboard advertising at various key locations such as the Dublin, Rosslare, Cork
Port and Airport and train stations. This will be known as phase one of the
service rollout where the main aim will be to get the service mainstream
recognition as a reliable and instantly recognisable mobile application. This
advertising will be aimed more at the tourist as a market segment and promotion
of the service will also happen in the course of or licensees’ promotion of their 3G
services. We will maintain full consultation rights on all promotional activities or
the service by our licensees. As part of our commitment to a high quality
product, we intend to forge partnerships with Ordinance Survey Ireland and other
relevant information sources such as the Irish Tourist Board. Phase two will come
six months after phase one and will focus on our corporate suite of products, with
tailored price package bundles available for the corporate customer.
3.7.3 Price
(See Pricing Model Section: 2.4.2)
3.7.4 Place
As stated our product is a virtual product available through our clients 3G mobile
phone. The geographic location of the major towns and cities of the Republic of
Ireland will be the scope of our product. This is intended for two reasons:
• Firstly, we wish to take every step to ensure our product is the best in the
market.
Customer feedback will be closely monitored to ensure
satisfaction and to increase our products value perception.
• Secondly, we intend to build a great deal of hype around the product and
with guaranteed reliable network coverage we can help build a reliable
reputation. It is hoped that this hype will build both awareness and
demand in more remote areas around the country, which in time, we will
offer full geographic coverage.
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FIND IT@ Practicum Report August 2005
3.8 PEST Analysis
The following is a PEST analysis for our initial market in Ireland. A PEST analysis
will be completed for each market we enter.
3.8.1 Political Factors
Ireland is a very politically stable environment. The main political influence on
our company will be the present government’s policy to encourage development
technological companies from Ireland. There is a marked difference between this
policy and the previous policy of attracting multinational companies, mainly
American, to set up offices in Ireland. We feel that this change in policy will
benefit our company greatly.
Another political factor that will influence our expansion in the future is that we
will be in the E.U. This should make it easier to expand into other E.U regions.
This is one of the main factors for targeting European capitals as future markets.
3.8.2 Economic Factors
A strong economy is essential for the success of a service like FIND IT@. Ireland
has a steady inflation rate and an increasing labour force. Both of these factors
bode well for our company. While we no longer have the “Celtic Tiger” economy
that has been written about so often in recent years, our economy is growing at a
steady rate. This is a favourable situation for us. It is important that this trend
continues for our product to continue to be successful and grow. If there were a
downturn in the economy, FIND IT@, as well as countless other products and
services, would be in danger.
3.8.3 Socio-cultural Factors
The important socio-cultural factors that will affect our service are demographics
and the normal cultural factors. Demographics are important because we are
aiming our product at 15–44 year olds. This sector in Ireland is particularly
attractive because there are roughly 1.9 million people in this sector.
An important cultural factor is the way Ireland has embraced mobile technology
over the last 15 years. This is shown by the fact that 94% of the population own
a mobile phone. This has led to the profitability of Ireland’s two main mobile
operators – O2 and Vodafone. This high penetration rate suggests that people
are open to using their phones for many activities, such as the FIND IT@ service.
3.8.4 Technological Factors
Technological factors can affect a market and product or service greatly. The
high rate of technology acceptance in Ireland is an excellent indication for success
of our product. We are using a newly developed technology, namely 3G, to
create or help create a new market.
The continuing development in the area of our service will enable us to reduce
costs as the technology becomes more widespread. This is an important factor
that will help our product become more and more profitable as time passes.
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FIND IT@ Practicum Report August 2005
3.9 Porters 5 Forces Analysis
3.9.1 Threat of Substitute Products
Our service will be one of the first 3G products to market in Ireland. Competition
is most likely to be the biggest threat to our product rather than substitutes.
However, given that our product is based on a recent technological development,
who is to say that 3G technologies are not going to be replaced by a better
technology in a few years? It is with this in mind that we intend to aggressively
market our product in mainstream media to build up a large 3G customer base.
As mentioned previously we intend to closely monitor our customer needs and
when necessary, we will again be the first to deliver our products to compliment
the next technology that time will inevitably bring. Monitoring our customers’
needs will both increase customer satisfaction lessening their likelihood to use
any future substitutes but it will also help us to build barriers against substitutes
by heightening the cost of market entry.
3.9.2 Competitors and Potential New Entrants
As our service will be one of the first 3G products in the Irish marketplace, at
present there are currently no other competitors. Internationally however, there
exist several providers of similar services. It would be unwise for us to assume
they will not wish to enter the Irish market, as we have already seen, the Irish
mobile phone market is one of the most profitable in Europe.
One such
competitor is UK based m-spatial with their product MapWay who have recently
teamed up with Vodafone Live in Germany opening up a potential client base of
3.5 million (Source http://www.m-spatial.com). For m-spatial it is necessary to
create partnerships with the various mobile phone service providers whereas with
FIND IT@ customers can use the service regardless of their mobile phone service
provider via their 3G handset. It is this ease of access coupled with our
collaborations with services like the aforementioned Irish Tourist Board that we
will use to create relevant up to date information that is user friendly and will
enable us build barriers against potential international competitors.
3.9.3 Bargaining power of Customers
It is our primary aim to keep our customers satisfied and to maintain a high level
of customer responsiveness. With this in mind, we aim to provide value for
money in our product by keeping our systems cost effective. We will aim to keep
customers bargaining power down while, at the same time, maintaining high
levels of satisfaction. Customer feedback will be closely monitored to ensure their
satisfaction and our management team will closely monitor technological and
marketing developments to engage in the development of new products and
product add-ons that will, again be, first to market.
3.9.4 Bargaining power of Suppliers
Given the nature of our product our only real supplier will be Maporama who will
be supplying us with our digital maps. It is important for us that we fully
understand the deliverables of the product format that they will be supplying us
from the point of view of both compatibility and to ensure scalability as our
systems grow. Therefore it will be necessary to have a close working relationship
with Maporama so as we are aware in good time of any format changes to their
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FIND IT@ Practicum Report August 2005
deliverable products. A cooperative relationship will reduce their likelihood to
change their terms of business and thus neutralise their bargaining powers.
3.10 SWOT Analysis
3.10.1 Strengths
Core Team
We have an excellent core team. Having worked together for nearly a year now,
we have an excellent understanding of everyone’s strengths and best suited roles
and areas of responsibility.
Excellent Trends
With many of the mobile operators having good years with improving balances
and positive cash flows.
Up until recently LBS failed to materialise to
expectations. However it is changing with Vodafone (Largest UK and Irish
operator) reporting 16.9% of its service revenue in the UK coming from non-voice
applications and 2.6% from content and value-added data service related in
March 2004. This figure is double that of the preceding year. Globally, 94.9
Million Users Generated $6.86 Billion in M-Commerce Revenue in 2003. This is
set to grow to 1.67 billion users by 2008 (Telecom Trends International, Inc,
2004, Mobile Commerce Has Taken Off, Says Telecom Trends International).
First to Market
Being first to market will be a great advantage and give us the time to develop a
core brand with recognition for a quality service.
Government Support
There is increasing government support (both at local and EU level) for the
improvement of Location Based services for the emergency services.
The
European Commission from its research are aware that approximately 40 to 60
per cent of calls made to the emergency services are made on a mobile phone,
and that figure is rising. Also the volume of intra-EU country visits of tourists and
business personnel has reached over 85 million per year. The EU are now trying
to decide on how much they should push operators to provide accurate Location
services and the improvement of interoperability between operators and the
emergency services so as to improve emergency response. As of yet the only
accurate location discovery is on fixed lines, which the numbers of emergency
calls are decreasing on.
3.10.2 Opportunities
Expansion to other Countries
The ease due to technology and satellite mapping that is already in place would
allow us to easily expand the business into other countries. Many of the
operators we expect to licence to are multinational companies with bases in many
countries. This would open up our market base.
Expansion to other Vendors
Pressures on Vendors, both competitive and government, to make these services
available to consumers improve our opportunities to licence our product to
various operators.
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3.10.3 Threats
Business Model Paralysis
The indecision of operators between buying the licensing of a third party
(ourselves) or deciding to develop in-house is a major treat. Mobile phone
service providers’ increasing debt levels further fuel this indecision. This is due to
the high costs of the 3G licences. This may also mean Operators may withhold
any further investment into the 3G market and therefore may not be willing to
purchase licences in the short term.
Limited Standards
It was difficult to decide which GPS (A-GPSTDOA/AOA, E-OTD, A-GPS etc.)
technologies to base our service on, as there is of yet no front-runner for
standardisation.
Accuracy
The accuracy of the service is paramount to its excepted use on a regular basis
especially for corporate/business customers. Although the accuracy in theory can
be to one meter, this is diluted for non-military applications.
Privacy Concerns
E-Privacy Directive 200/58/EC refers directly to Location Based Services and
outlines the requirements that vendors must meet when communicating with
customers, users or subscribers and the level to which they must be informed
before they consent.
3.10.4 Weakness
Size
We are a newly formed small company in a very competitive market. As a small
company we may be competing for the attention of very large organisations with
operations all over the world. Although we believe that the high rate of mobile use
and expenditure by Irish people will make for excellent test market conditions for the
global companies.
Negative Concerns
A major concern of today’s society is privacy. Big Brother conspiracies are a
major barrier to public acceptance and require careful marketing of the product,
so that the customers are fully satisfied that they have been adequately
informed. Any locating of a person without their consent would be in breach of
E.U and government guidelines. Our service allows people to fully disconnect
once they are satisfied with the information received. Our responsibility would
not only be to make consumers fully aware of the services implications and to
continuously monitor and update our service in compliance with any new
legislation in this field.
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4. TECHNICAL SECTION
4.1 Introduction
The introduction of more and more mobile devices that are capable of utilising
high bandwidth mobile networks has introduced a new world of opportunities to
developers and users alike. One of the major areas of opportunity is the
introduction and development of LBS. The concept of this technology has been
around since 1998 but with the relatively low bandwidth capability of WAP
(download speeds of around 10-20 Kbps) and inevitable low usability as a result
of this, there had been very little development in this area until recently. With
the advent of 2.5G (114Kbps), and recently 3G (up to 384Kbps), coupled with
operators such as Ericsson (see Technologies Used) publishing SDKs, developers
have been encouraged to create new products that have seen the technical side
of LBS flourish.
4.2 What are LBS?
LBS provide the capability to find the geographical location of a mobile device
(such as a mobile phone or satellite navigation system) and then provide
information regarding local services based on the device’s coordinates. LBS
deliver geographic data between mobile and/or static users via the Internet or
some other wireless network. The main draw of LBS is that the applications
based on it change their behaviour automatically based on the location of the
user. Wireless carriers and their partners are developing LBS that are based on
data services who are trying to generate greater revenues by increasing both the
average revenue per user (ARPU) and their number of subscribers. FIND IT@ will
provide a necessary service which will increase network volume, thereby
increasing the earnings of mobile network providers. As this technology grows,
becomes more widespread and providers produce SDKs (Software Development
Kits) third party developers are beginning to develop LBS products.
4.3 Positioning on a Mobile Network
4.3.1 Introduction
A mobile network is made up of base stations and cells. The base station is
responsible for the radio communication to and from a mobile phone and is made
up of antennas, transmitters, receivers and control units.
A cell is the basic unit of a mobile system. It’s the geographical area where the
radio coverage is given by one base station. The size of a cell depends on the
demand and also the geographical topology. In a densely populated area, such
as a town or city, the size of one cell is usually between 100 metres and a few
kilometres whereas in a less populated area, such as a rural area, the radius is
about 35 kilometres. The cell is represented by a hexagon in a GSM network.
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If the demand for capacity is low, it’s usual to put a base station in the centre of
the cell and let the antenna cover 360˚, giving the widest coverage. This is
called an Omni cell. In denser populated areas, sector cells are used. This is
where a base station is placed where three smaller cells meet, with 120˚
coverage for each antenna. This setup is used because many small cells together
give higher capacity than a few big cells. See below for what Omni and Sector
cells look like.
Unfortunately it isn’t possible to give an accurate measure of the accuracy of this
system. This is because it depends on a number of factors like what type of cell
the user is on and the distance to the base station. A number of different
positioning techniques are also used.
Source: Positioning Basics – Ericsson
4.3.2 Positioning Techniques
There are a number of positioning techniques, which can be broadly classified into
two categories.
Terminal Based Solutions
GPS: This is a well know technology that has been around since 1993, when the
US Air Force launched the last of its 24 navigational satellites. GPS uses at least
3 of these satellites to locate a user’s coordinates – latitude, longitude and even
altitude. The accuracy is between 5 and 40 metres provided there is a clear view
of the sky.
A-GPS: Stands for Assisted GPS and is a time-based solution that uses fixed GPS
receivers, like mobile phone masts, that are placed at regular intervals. Its
benefit is that it can work accurately indoors, as it isn’t reliant on GPS satellites.
These receivers fetch data that can be used to complement the readings of the
mobile device. This extra data greatly reduces the Time-to-First Fix (TTFF). The
TTFF is the time taken by the network to get a first location of a mobile phone
handset. The quicker this is, the more accurate a reading of the location of a
user will be. This is imperative for FIND IT@ in giving customers directions to the
location they wish to find.
Network Based Solutions
CGI-TA: Cell Global Identity (CGI) uses the identity of each cell to locate a
device. CGI is usually complimented with Timing Advance (TA) information. TA
is the measured time between the start of a radio frame and a data burst, and
defines the time taken for information to reach the mobile device from a base
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transceiver station. FIND IT@ can implement this technique if we choose to
include a “Show me a pub in this area” type of feature. The precision is good in
urban areas and is as accurate as 10 metres but can be up to 500 metres
depending on the size of the cell.
TOA: Time of Arrival (TOA) works by bouncing signals back to a base station or
vice versa. The base station then measures the time of arrival of the data from
the device or handset.
This is potentially the most expensive positioning
technique mentioned here because it requires the installation of expensive
monitoring equipment at all of the base stations.
4.3.3 FIND IT@ Positioning Techniques
The Ericsson MPS offers three of these positioning techniques. They are CGI-TA,
TOA and also A-GPS. CGI-TA and TOA offer lower accuracy than A-GPS but
current mobile phones can use these techniques, while A-GPS is that it only works
for A-GPS enabled handsets. For this reason, CGI-TA will be used primarily. AGPS has a considerably higher accuracy than CGI-TA so when A-GPS enabled
handsets become more widespread, the system can be migrated to this
technique.
4.4 The FIND IT@ Platform
The FIND IT@ product is implemented using Java and related technologies. Java
was the obvious choice due to its high portability and its suitability to web-based
programming (See Technologies Used for more). The platform is made up of
three primary systems and communication is made through their respective API’s.
The three systems are:
•
Mobile Positioning Server (MPS): This is used to locate a user’s
coordinates on a network as efficiently as possible. We used the Ericsson
MPS for this (See Technologies Used).
•
Application Server: This is the anchor of our system and communicates
with each of the other components. It deals with things like database
queries, user input and also output to the user. It also calls the other
servers using their API’s.
•
Mapping Server: This is responsible for taking the coordinates of the
user, as gathered by the MPS; and the destination coordinates, as
obtained by the application server; and constructing a map of the area
involved. This map is then passed back to the application server, which in
turn returns the result to the user’s mobile phone. A number of Mapping
servers are available and each comes with their own API’s (See
Technologies used for the choices we considered).
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4.4.1 Processes and Time-line of Execution
System Process Diagram
1. User goes to the “FIND IT@” Internet site – www.finditat.ie. This brings
them to the application server.
2. The Application Server contacts the MPS (Mobile Positioning Server)
requesting the coordinates of the user.
3. The MPS locates the user and returns their position
4. The application then requests the coordinates of the destination, a street
name, from the database.
5. The database looks up the street requested and returns the coordinates
associated with it.
6. The coordinates of the user and the destination coordinates are then sent
to the mapping server.
7. The mapping server creates a map with the two points highlighted and a
suggested route between the two points.
8. The application server then returns the map to the user.
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The FIND IT@ system completes the following tasks:
•
•
•
•
Obtain Mobile Station International Subscriber
(MSISDN)
Locate device
Optimise query to obtain coordinates for destination
Retrieve map and output it to the user
Directory
Number
4.4.2 Obtain MSISDN
Every mobile station can be uniquely identified by its MSISDN. Every positioning
technique is dependent upon obtaining the MSISDN of the mobile station to be
located. In order to determine the location of a mobile station, its MSISDN must
be sent to the MPS. There is no single way to determine a MSISDN. It varies
depending on the mobile network being used and its relevant protocols and
security measures. For our system, we used the Ericsson MPS to take care of this
(See Technologies Used).
4.4.3 Locate Device
Once the MSISDN is found, it is passed to the MPS. The FIND IT@ application
can then request the location of the mobile station, and therefore the mobile
device, from the MPS. The following process happens:
1. The application asks for the location of the station, using the MSISDN,
from the GMPC.
2. GMPC performs an authorisation check and then delivers the request to
the SMPC
3. The SMPC then collects position information from the network and
calculates the coordinates to be used by the application.
These
coordinates are then sent to the GMPC
4. The GMPC then creates a response that is in turn sent to the FIND IT@
application.
4.4.4 Optimise Query and Obtain Destination Coordinates
At this stage, the FIND IT@ application has the coordinates of the user. It now
needs to find the coordinates of the destination. Therefore, it needs to consult an
external database that contains all relevant destinations and their respective
coordinates. This information will have to be manually created before the
application can be used but it only needs to be done once. Then, as places and
businesses are added to the system, this database needs to be updated to reflect
these changes.
4.4.5 Retrieve map and output it to the User
The FIND IT@ application has now got the source and destination coordinates. It
then communicates with the Mapping server using its API (see Technologies
used). This mapping server then generates a map and provides an optimised
route between the two points and returns this to the FIND IT@ application. The
Mapping Server is responsible for calculating and optimising each route as well as
generating the map. This application then outputs this result to the user.
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4.5 Security
Mobile Security is starting to become an important issue. With the spreading of
“Smart Phones” and PDA’s, it is inevitable that new security risks are possible.
The spreading of these devices has meant that they are starting to reach the
“critical mass” required to attract developers of malware. By the end of June,
Symantec had reported 44 mobile threats worldwide. When compared to 27,000
detected on Windows platform computers, the threat to mobile phones is a drop
in the ocean but the important fact is that the number isn’t zero. These threats
are starting to slowly creep up and once “Smart Phones” have reached critical
mass, it’s feared that this number will shoot up.
Since the FIND IT@ application is only accessed through the Internet, no
application needs to physically run on the user’s mobile phone. This is an
advantage in that the user doesn’t need to grant access to anything that may
want to run on their device. Another aspect of application security is that data
needs to be transmitted over the network. In its present state, the FIND IT@
application doesn’t require any confidential information to be sent or received –
only the location of the user – so there is no security risk. However, if any future
enhancements were to be implemented, encryption of data sent, such as a user
name or password would need to be implemented to ensure identity theft doesn’t
occur.
The main security threat to be considered for this application is the web server.
Since this is subject to all the usual threats and attacks, it will be housed behind a
firewall. The database used by the server will also be secured behind a firewall.
This firewall should be set up correctly and monitored constantly.
4.6 Testing
There are three stages to testing any LBS application.
highlighted in the following diagram:
The three stages are
Source: Ericsson Mobility World
4.6.1 Code Testing
The first stage is Code Testing. This is done at a local level using the MPS
Emulator. To set this up, a map needs to be inputted into the Map Tool (See
Technologies used) along with specified coordinates of the map. We used a map
of Dublin City centre. We also specified areas of population density because this
affects the simulated mobile coverage. Once this is all input into the application,
the Map Tool creates a sample cell grid and a virtual mobile network to test with.
The tool can be used to simulate a number of users’ paths through the specified
area. This information was used in the testing of the Java Servlets we wrote to
locate a user, via their coordinates, on their routes. To test the code, we ran the
MPS Emulator and the FIND IT@ application server (A Tomcat Web Server).
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Below is an example of a map returned by the system. The suggested route is
highlighted in blue with the user’s location represented by a blue solid circle at
one end of the route.
4.6.2 Online Remote Testing
Once the application works correctly locally, a real service enabler is needed to
test the application online. This is to ensure the application interacts correctly
with a live service enabler. Ericsson allows developers to utilise a number of
online service enablers throughout the world, including Ireland. Note that this
phase was not completed because of the relatively early stage of development of
the FIND IT@ service. For the “Proof of Concept” phase, only local testing will be
completed.
4.6.3 Verification
This stage is important because it shows operators that your application works in
a radio network and on a real mobile phone. Ericsson provides this verification
service. Many operators require this phase of any new product that they intend
to deploy onto their environment. This is the final stage of testing and would be
completed before the product goes “live”. Again, this phase has not been
completed since the product is only in the “Proof of Concept” phase.
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4.6.4 Simulation
The following is a simulation of a user using the FIND IT@ service.
•
•
•
•
•
The user accesses the internet from their mobile device (phone / PDA etc)
and goes to the FIND IT@ site – www.finditat.ie For simulation purposes,
the
application
is
run
locally
so
the
user
would
go
to
http://localhost:8080/Practicum/mainPage
If a licensing option is taken, then the user will be able to access the FIND
IT@ service directly through an interface like that of Vodafone Live!
The user is given 2 options
o FindMe – This option will return a map with the user’s location on
it.
o FIND IT@ – This option requires some search criteria to be entered.
At the prototype phase, only a street name can be entered.
The application processes the relevant commands and search text (if
entered) and returns the results.
The User can then click on the “Map” link to view the map they requested.
Note that a simple database, containing a number of sample maps, was created
to simulate the interaction with the Mapping provider. Due to cost restraints we
were unable to implement interaction with a Mapping server at the prototype
phase.
4.7 Technologies Used
We utilised the Ericsson Mobile Positioning System (MPS) Software Development
Kit (SDK) version 6.0 for the development of our project. A live positioning
server is not required to develop, demonstrate or test a new positioning
application. Ericsson’s MPS SDK contained all the necessary tools we needed.
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FIND IT@ Practicum Report August 2005
Source: Ericsson Mobility World
The Ericsson MPS SDK contains the following parts:
•
•
•
MPS Emulator
Java Mobile Location Application Programming Interface (JML API)
Ericsson MPC Map Tool
4.7.1 MPS Emulator
MPS is the name of Ericsson's Location Based Services (LBS) solution. MPS
consists of a server-based Gateway Mobile Positioning Centre (GMPC), a serverbased Serving Mobile Positioning Centre (SMPC) and software extensions for the
operator's mobile network. The communication between an application and GMPC
relies on the Mobile Location Protocol (MLP) or the Mobile Positioning Protocol
(MPP). With the MPS Emulator you are able to set up our own local positioning
system. The MPS Emulator runs on a web server, and was a crucial tool for
testing the FIND IT@ application. When loaded with the mobile network created
with the Ericsson MPC Map Tool, you can determine an emulated positioning
answer from a specific area.
4.7.2 JML API
The JML API is designed to give the location of a phone as fast and easy as
possible. All data parsing as well as requests sent and received over the Internet
is done by the system. By using this Java-based class library we were be able to
develop the FIND IT@ application without the need to know about the underlying
protocols in detail.
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4.7.3 Ericsson MPC Map Tool
A mobile network consists of a large amount of cells. The size of one cell can be
from less than 100 meters in radius in dense urban areas to several kilometres in
rural areas. With MPC Map Tool we created our network based on a map of
Dublin City centre we loaded in ourselves. MPC Map Tool generated the mobile
network for us, ready to use for testing the FIND IT@ application with the MPC
Emulator.
The Map Tool enabled us to test our application in a realistic
environment.
The main benefits of MPS include:
•
•
•
•
MPS is fully scalable and supports both networks that are standard
compliant as well as those that are not. It can also handle both GSM and
UMTS networks simultaneously.
MPS is standardised and future proof. Standardisation of positioning
technology is a key to successful global services and roaming. Ericsson
has helped drive the development and standardisation of positioning
technology. It requires no modifications to standard GSM phones and
terminals.
MPS supports the standardised Mobile Location Protocol (MLP), which is
the interface between the LBS Client, in our case the FIND IT@ application
and GMPC.
MPS is flexible and fast. Since the open API is available to download free
of charge, developers like ourselves were able to start creating an
application based on our own business ideas. In essence, the technical
problems we’re by and large taken care of by using the environment
provided by Ericsson. Applications can be easily amended or added over
time.
The design of the environment meant we could develop our
application independent of the type of positioning system to be used.
4.7.4 Mapping APIs
There are two mapping APIs that we found suitable for our project: Google Maps
and Maporama. Both stand out for their high-quality, up-to-date, accurate maps.
The Google Maps API lets developers embed Google Maps in their own web pages
with JavaScript. You can add overlays to the map (including markers and lines)
and display shadowed "info windows" just like Google Maps. The Maps API is a
free beta service, available for any web site that is free to consumers. The catch
with using Google’s free map service is that Google retains the right to put
advertising on the map in the future. Another problem is that, so far, Google
have only developed maps for certain regions: the US, Canada, the UK, Ireland
and Japan. One useful feature is that you can also zoom in on satellite photos of
urban areas in these countries.
We decided to adopt Maporama for the following reasons:
Easy-to-use: Maporama Web Services 2004 are fully compliant with XML and
SOAP, the standard protocol of web communication.
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Powerful: Maporama constantly improves its technology and allows all users of
Maporama Web Services to benefit from ever-accurate and up-to date locationcentric software.
Global: Maporama covers the world with accurate maps of every major city.
Up-to-date: Maporama updates its maps and data regularly to ensure users, like
FIND IT@, can access the most up to date data possible.
Open: Maporama Web Services are not tied to any one operating system or
programming language.
There are numerous services available from Maporama. We utilised the following
in the development of our product:
•
Map display: DrawMap Web Service: Draw a map centred on given
longitude/latitude coordinates (30 different map styles, 8 point of interest
themes)
•
Route Optimisation: OptimiseRoute Web Service: Find the shortest or
fastest route to visit up to 100 points by testing permutations. A list of
directions to follow is returned along with sentences and a large general
map of your trip.
4.7.5 Java Servlets
Servlets offer many benefits to web developers over existing server-side
application development technologies. The following are some of the reasons we
used Servlets in the development of FIND IT@.
•
•
•
•
•
•
Performance: The performance of servlets is superior to CGI because
there is no process creation for each client request. Instead, each request
is handled by the servlet container process.
Portability: Like other Java technologies, servlet applications are
portable.
Rapid development cycle: As a Java technology, servlets have access to
the rich Java library that will help speed up the development process.
Robustness: Servlets are managed by the Java Virtual Machine. As such,
you don't need to worry about memory leak or garbage collection, which
helps you write robust applications.
Widespread acceptance: Java is a widely accepted technology. This
means that there are numerous vendors that work on Java-based
technologies.
Developer experience: The FIND IT@ team felt their main programming
strength was in Java so it was ultimately an obvious choice.
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5. FINANCING
5.1 Personal Funds
The management team decided to invest €5,000 each of their own funds into the
company.
5.2 Grant
The first step is to apply for an Enterprise Ireland Proof of concept phase grant.
This scheme focuses on a "proof of concept" model. Individuals or small groups
work on short applied projects to develop a product concept through to a stage
where a route to commercialisation is clear, either as a campus company or
through licensing. It is focused on encouraging companies to “Spin-out” of a
university environment. Below is the timetable for applying and receiving these
grants.
DEADLINE
NRSFB MEETING
ROUND 6 – SPRING 2005
12th January
24th March
Round
2005
11th May
21st July
14th September
17th November
7
–
Summer
ROUND 8 – WINTER 2005
We will apply for the Winter 2005 grant. Assuming that our application is
successful, the grant will be awarded in November 2005. This will be the starting
point of the company. The exact amount of this grant varies. In Spring 2005
(the latest results available), DCU applications received an average of
€73,027.29. We take this figure (rounded to €73,000) as an estimate of the size
of a grant we would receive. As an interesting aside, DCU were awarded more
grants than any other third level institution in Spring 2005.
5.2.1 Eligibility
Eligibility to the Proof of Concept grant is based on the following areas
•
Technical Merit – 50%
This is the main area that the project has to be strong in to apply for the
proof of concept grant. To get a high score in this area, the project has to
be strong in Methodology proposed, technically feasibility and benefits /
innovation. We feel the FIND IT@ application is well thought out and
based on an existing technology that is relatively close to being
mainstream so whereas it may be lower than some projects on technical
innovation, it makes up for this in other areas.
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FIND IT@ Practicum Report August 2005
•
Commercial Viability – 30%
This section is where we think the FIND IT@ application is particularly
strong and we would hope to score highly. We feel our revenue model
(See section 2.4) is innovative and would potentially ensure our business
would be profitable. The areas these sections are marked on are an
evaluation of market potential and sector relevance. We feel that we
would score highly in each of these categories.
•
Project Management – 10%
High marks are given in this section when there is a good project plan and
when there is good financial justification (value for money). We know how
to set project milestones and have experience as a unit meeting them.
We also feel we have an excellent financial justification.
•
Track Record – 10%
This section refers to the track record of the applicants of the grant. The
two sections it’s marked under are competence of the proposer and
previous grants received.
We feel that with the group’s extensive
educational qualifications (each having an M.Sc.) that we would be judged
to be competent. However, since we have no record of receiving grants or
being involved in such a company, we anticipate not scoring highly here.
Fortunately, this lower score would not affect our overall application too
greatly since the percentage allocated to this section is low compared to
the rest of the areas. This weakness (lack of experience in similar start-up
companies) would be addressed at a later stage should further funding be
required.
5.3 Cash Flow Forecast Analysis
5.3.1 Total Sales and Income Vs Expenditure
€500,000
€400,000
€300,000
SALES
€200,000
TOTAL INCOME
EXPENDITURE
€100,000
€0
YEAR 1
YEAR 2
YEAR 3
This chart shows our income versus our expenditure. In our first year, the total
income is made up of a €73,000 business development grant, €100,000 venture
capital and €20,000 of our own funds. We will invest €5,000 each to found our
company. The grant, courtesy of Enterprise Ireland, will be used primarily for
research and development. Once the product is ready for launch, a venture
capitalist will be sourced to finance the marketing of FIND IT@.
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FIND IT@ Practicum Report August 2005
5.3.2 Cash Flow for 3 years
120,000
100,000
80,000
YEAR 1
60,000
YEAR 2
40,000
YEAR 3
20,000
0
Sept
Nov
Jan
Mar
May
July
From this graph, we can see how the cash flow for year one is influenced; firstly
by the grant, and then by the VC. The second year is reasonably stagnant. We
don’t foresee any jump in revenues until the middle of year three.
5.3.3 Net Cash Flow per month (Excluding Venture Capital Injection)
15,000
10,000
5,000
0
YEAR 1
-5,000
YEAR 2
-10,000
YEAR 3
-15,000
-20,000
-25,000
Sept
Nov
Jan
Mar
May
July
The above gives a more realistic view of our cash flow forecast. We will initially
be spending large amounts of money to push our advertising campaign. By the
middle of year 2, we expect to see sales increasing steadily through repeat use
customers rather than new clients. This will allow us to scale back our
advertising budget.
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FIND IT@ Practicum Report August 2005
5.3.4 Sales Vs Expenses
€500,000
€400,000
€300,000
SALES
€200,000
EXPENSES
€100,000
€0
YEAR 1
YEAR 2
YEAR 3
These figures highlight our initial spending spree in R&D, marketing and
advertising. From year 3 on, we will see steady growth in sales, while at the
same time reducing our expenses.
5.3.5 Incomings for first 3 years
€500,000
€400,000
€300,000
SALES
€200,000
FUNDING
€100,000
€0
YEAR 1
YEAR 2
YEAR 3
5.3.6 Sales for first three years
€500,000
€400,000
€300,000
SALES
€200,000
€100,000
€0
YEAR 1
YEAR 2
YEAR 3
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FIND IT@ Practicum Report August 2005
5.3.7 Sales per Quarter per Year
€140,000
€120,000
€100,000
€80,000
YEAR 1
€60,000
YEAR 2
€40,000
YEAR 3
€20,000
€0
Q1
Q2
Q3
Q4
We expect the strongest growth in sales between mid year 1 and year 2. This will
be primarily made up of customers interested in trying out FIND IT@ as more and
more people upgrade to 3G mobile phones. Since there is always a boom in
mobile sales at Christmas, we aimed our product launch for December 2005.
Some will use our product a few times purely for novelty purposes. From Q2 of
year 2 onwards, increases in sales will have a more even look, with our clientele
made up of regular users, with corporate customers availing of our bundled
options.
5.4 Venture Capital
Following on from the start-up grant from Enterprise Ireland, we believe that the
best and most likely form of investment would be from Venture Capital. This
phase and the problems encountered here is sometimes called “Crossing the
Chasm” and it is a notoriously difficult phase of business development to
negotiate. We believe with the help of our advisory board and with a solid
business plan, based on the product that we will be able to secure €100,000 of
venture capital for the second year of business. This investment will be returned
within three years of the initial investment.
Ideally, we would prefer to put off sourcing a bank loan as much as possible for
two reasons. Firstly, a venture capital firm would be able to provide invaluable
advice, assistance and expertise – in both business and technology – to an
entrepreneurial company such as ours. Their vested interest would ensure that
they would help in any way possible to maximise their return on investment. A
venture capitalist is not so much a lender as an equity partner.
Another reason we wouldn’t apply for a bank loan at such an early stage is that
we wouldn’t be in a position to begin paying it off. Our company won’t be making
a profit in the first year, and we have few if any collateral to guarantee the loan
against. Applying for a €100,000 bank loan would be impractical and infeasible.
Granted, interest rates are at a nadir; nevertheless, we wouldn’t have the
resources to make the first few repayments and would rather avoid having so
much debt at such an early stage. However, once we have gained a firm foothold
on our market, we could return to the possibility of applying for a loan.
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FIND IT@ Practicum Report August 2005
5.5 Important Ratios
Current Ratio
Sales Growth
Cost of Goods Sold to Sales
Net Profit Margin
31/08/06
5.5:1
72%
-77.5%
31/08/07
2.88:1
51%
50.5%
-4.25%
31/08/08
7.67:1
14%
43.4%
10.29%
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FIND IT@ Practicum Report August 2005
6. CONCLUSION
This report shows that FINDIT@ is a viable service with a strong market potential.
Our in-depth market research proves that there is sufficient demand for
such a service, and we firmly believe that FINDIT@ can be a commercial success
as shown in our financial section.
There is enormous growth in the 3G mobile phone market at the moment, with
sales estimated at between 50-70% of all mobile phones. In the coming years,
this will increase further. Our target market of 15-44 year olds are proven
to be “early adapters” to new technologies, and are highly likely to upgrade
their phones to 3G in the very near future.
The technology behind our service is already in place, and so too is the
demand for FINDIT@ to succeed. People living their lives in the fast lane
don’t have time to waste looking for directions when they are lost. We can
provide them with accurate, detailed and user-friendly digital maps on their
mobile phones at a low cost. So if you can’t find your way to that all important
job interview, we’re here to help you.
FINDIT@’s advance functionality saves time and effort for people whose
livelihoods are dependent on finding their way as efficiently as possible from A to
B. We have created a suite of products aimed at this corporate market segment,
with tailored price package bundles available so that they can enjoy even
more savings.
At present, there are no competitors for this product in the Irish market.
However, there is an anticipated explosion in the Location Based Services
sector in the near future. This will enable FINDIT@ to become Ireland’s
market leader, opening the door for us to enter the international mobile
market. At present our service offerings is in the find and locate area but we
expect to expand in this area also. By providing other services which will include
strategic alliances with traffic analysis to improve our “shortest route”
functionality and develop other LBS that realise massive benefits the end user.
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FIND IT@ Practicum Report August 2005
7. REFERENCES
Websites
3 Ireland - http://www.3ireland.ie/index.html
European Patent Office - http://www.european-patent-office.org/index.en.php
Ericsson Mobility World: http://www.ericsson.com/mobilityworld
Commission for Communications Regulation - http://www.comreg.ie/
Maporama – http://www.maporama.com
Meteor – http://www.meteor.ie
Vodafone Ireland - http://www.vodafone.ie
ZDNet - http://www.zdnet.co.uk/
O2 Ireland - http://www.o2.ie
Microsoft - http://www.microsoft.com
AT & T - http://www.att.com
ViaMichelin http://www.viamichelin.com/viamichelin/gbr/tpl/hme/MaHomePage.htm
Mappy.com - http://www.mappy.com
Location Based Services - www.gisdevelopment.net/technology/lbs
Ireland on Line – www.iol.ie
Articles
Competitive Strategies - Vadim Kotelnikov
http://www.1000ventures.com/business_guide/crosscuttings/competing_strategy
.html
Competitive Strategy - The Basics a la Michael Porter
http://home.att.net/~nickols/competitive_strategy_basics.htm
€1 Billion Investment in Ireland’s only 3G Network – 3g.co.uk
http://www.3g.co.uk/PR/June2005/1538.htm
Number of Overseas visitors 1999 – 2003 – Central Statistics Office
Page 52
FIND IT@ Practicum Report August 2005
http://www.cso.ie/statistics/vistoirenumoseasvisits2000to2004.htm
Lack of Interest when it comes to Advanced Mobile Phone Features –
3g.co.uk
http://www.3g.co.uk/PR/June2005/1651.htm
Mobile Messaging Forecast Europe 2005 – 2010 - Iris Cremers, Michelle de
Lussanet with Jaap Favier, Michèle Bouquet
http://www.forrester.com/Research/Document/Excerpt/0,7211,35701,00.html
Location Based Services in the Enterprise - Carl Zetie with Margo Visitacion,
Kimberly Q. Dowling
http://www.forrester.com/Research/Document/Excerpt/0,7211,34333,00.html
Targeting Accuracy, European Communications - Jake Saunders 2004
http://www.eurocomms.co.uk/features/features.ehtml?o=287
Directive 2002/58/EC of the European Parliament and of the council of
12 July 2002 - concerning the processing of personal data and the protection of
privacy in the electronic communications sector (Directive on privacy and
electronic communications) Accessed at: http://europa.eu.int/eurlex/pri/en/oj/dat/2002/l_201/l_20120020731en00370047.pdf
Commercialisation Fund – Proof of Concept – Enterprise Ireland.
http://www.enterpriseireland.com/ResearchInnovate/Colleges/Proof_of_Concept_Phase.htm
LBS, the ingredients and alternatives – Ajay Magon.
http://gisdevelopment.net/technology/lbs/techlbs006.pf.htm
IBM Developer Solutions: Location-based services – Valerie Bennett and
Andrew Capella. http://www-106.ibm.com/developerworks/library/i-lbs/
Positioning Basics – Ericsson.
http://www.ericsson.com/mobilityworld/sub/open/
technologies/mobile_positioning/docs/positioning_basics
Mobile Positioning: Where you want to be! – Christoffer Andersson.
http://www.wirelessdevnet.com/channels/lbs/features/mobilepositioning.html
Security Experts warn over mobile threats – ENN.
http://www.enn.ie/news.html?code=9617112
Java Security on Mobile Devices - Mikko Kontio
http://www.awprofessional.com/articles/article.asp?p=169542
What does the SDK Contain? - Ericsson
http://www.ericsson.com/mobilityworld/sub/open/technologies/mobile_positionin
g/about/mps_gettingstarted_what_contains_in_SDK
Maporama Web Services - Maporama
http://www.maporama.com/home/en/products/maporama_web_services.asp
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FIND IT@ Practicum Report August 2005
Java Servlet Technology Primer – Budi Kurniawan.
http://www.informit.com/articles/article.asp?p=26920&rl=1
Books
Jelassi T, Enders A, 2005, Strategies for e-Business, Creating Value through
Electronic and Mobile Commerce, FT Prentice Hall, UK
Menneck B, Strader T, 2003, Mobile Commerece, Technology, Theory and
Applications, IDE Group Publishing, UK
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FIND IT@ Practicum Report August 2005
Appendix A – Questionnaire
We are researching the likelihood of a demand for services, accessible by a
customer’s mobile phone, that will allow you to find your location and the location
of a business and other features in the area (Dublin city initially).
The service will work by a customer using the Internet functionality of their phone
to access a map of where they are and where they wish to go.
1. Are you Male or Female?
Male
Female
2. Please indicate the age group to which you belong?
15-24
25-34
35-44
45-Over
3. Please indicate your occupation.
Student
Unemployed
Self employed
Homemaker
Professional
Manual/Skilled
4. Do you have a mobile phone?
Yes
No
5. Do you find it easy to use?
Yes
No
6. Do you use it more for business or personal use?
Business
Personal
7. How often do you use it?
Hourly
Daily
Weekly
Never
8. Do you think you utilise the maximum capabilities of your phone?
Yes
No
9. Do you have a web-enabled phone?
Yes
No
Dont Know
10. Do you use any of the premium text facilities on your phone? Email, News,
picture messaging etc.
Yes
No
11. If the answer to question 10 is No why not?
Too Expensive
Too Complicated
Other Please Specify
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FIND IT@ Practicum Report August 2005
12. Do you ever avail of downloads for your mobile, e.g. Ringtones or games?
Yes
No
13. Please indicate whether you are a “Pre-Paid” or “Bill Paying” mobile phone
user?
Pre-Paid
Bill
14. Please rate your interest in the following features A- D as indicated below.
1-Extremly Uninterested 2-Uninterested
interested
3-Average
4-Interested
5-Very
A. Find your location on a map of a city
1
2
3
4
5
B. Be informed of interesting attractions in your vicinity e.g. Local tourist
attractions.
1
2
3
4
5
C. Get a shortest path from your location to a destination of your choice.
1
2
3
4
5
D. In the case where you have a meeting or an appointment with a business,
have them send you details of how to get to their premises.
1
2
3
4
5
15. Have you ever had difficulty getting to a destination within a city?
Yes
No
16. Would you pay for any of the above services to your mobile phone?
Yes
No
17. Please indicate the amount in cents that you would expect to pay for this
service based on a pay per map service.
Cent
18. Would you prefer to use digital or traditional paper maps?
Digital
Paper
Thank you for taking the time to partake in his questionnaire. Your answers are
taken in the strictest confidence and will be used only for the purposes of this
research.
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FIND IT@ Practicum Report August 2005
Appendix B – Irish Mobile Operators
The mobile operators in Ireland are:
Meteor
Originally under Western Wireless group has recently been acquired by Eircom. It
is unknown if Meteor will be entering the 3G market. Metor has a 10% market
share in Ireland (Approximately 251,600 subscribers).
O2
O2 plc has 100% ownership of mobile network operators in three countries - the
U.K, Germany and Ireland. By 31 March 2005, their business was serving nearly
24 million mobile customers. Combined group turnover for the year ending 31
March 2005 reached £6.683 billion. O2 have already rolled out 3G in Germany
and the U.K. They expect to start the roll out of 3G in Ireland later this year. O2
has signed a long-term agreement with NTT DoCoMo Inc, Japan's largest mobile
communications provider, to launch a mobile internet service branded i-mode® in
the U.K and Ireland in Autumn 2005.
Vodafone
Vodafone is the world's largest mobile telecommunications company, with a
significant presence in Continental Europe, the U.K, the United States and the Far
East through the Company's subsidiary undertakings. The Group's mobile
subsidiaries operate under the brand name 'Vodafone'. In the United States the
Group's associated undertaking operates as Verizon Wireless. On 30 June 2005,
the Group had over 165 million customers and the Group’s turnover was £34.1
billion. In Ireland Vodafone Live! Was introduced and worked initially on 2.5G
network and an aggressive roll out of 3G is planned.
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FIND IT@ Practicum Report August 2005
3 Ireland
3 is the newest entrant into the Irish market launched on the 27 July 2005. It
was awarded its 3G licence in June 2002. 3 Ireland is owned 100% by Hutchison
Whampoa which is one of Hong Kong's largest telecommunication companies.
Turnover for the 3 Group totalled HK$15,742 million (GBP £1,164 million) for the
full year of 2004.
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FIND IT@ Practicum Report August 2005
Appendix C – Operator Wireless Internet Connection Fees:
The following is a list of the Operators in Ireland and their Internet connection
costs. Some of the figures quoted are based on special price plans. All figures
were correct 28/07/05.
Meteor
WAP
Meteor Anytime Plus & Meteor Minutes Plans
Meteor Leisure Time Plus Plan
GPRS WAP
WAP Usage (includes browsing, downloading etc.)
GPRS
Connecting via GPRS
Pay As You Go (Early Bird/Night Owl)
GPRS
Pay Monthly Options
Basic Surf
Pay As Use
O2
€2.50 per ½ MB+
downloaded
Per KB
3c
1c
Vodafone
Special Plans
Read
Send
Read
Send
Price per Minute
9c
13c
Price per KB
3c
Price
2c/KB up to 512 KBs
0.5c/KB for any usage over
512KBs.
From €0.60 per MB
To €2.00 per MB
3
E-mail < 10kb
E-Mail < 10kb
Email 10-500kb Send E-Mail 10-100kb
Large E-Mail 100-500kb
5c
9c
25c
50c
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FIND IT@ Practicum Report August 2005
Appendix D – Value Added Services Price Profile
The following is a breakdown of the most popular value added services available in
Ireland. These services are entertainment based. From our research and analysis of
download offerings we found that the average download costs about €3.00 - €4.00.
Java Games
Logos, Screensavers & Picture
Messages
Ring tones
Wallpapers
Wallpapers
Ring tones
Games
Logos
Games
Ring tones
Online Multiplayer Game
Rent Game
Buy Game - Various
Music Video
Sports Video
Ring tone
Wallpaper
Games
Software
Meteor
From €2
From €1.25
From €1.25
From €2.00
O2
From
From
From
From
€1.50
€2.00
€3.00 (Average €6.00)
€3.00
Vodafone
From €2
From €5
3
€0.50
€1.00
€2.00 - €7.00
€1.00 - €3.00
€1.00
Jamster
€4.00
€2.00
€4.00
€4.00
(Single
(Single
(Single
(Single
Purchase)
Purchase)
Purchase)
Purchase)
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FIND IT@ Practicum Report August 2005
Ringtones
Games
Colour Messages
Wallpaper
Logos
IOL
€6.00
€8.00
€6.00
€6.00
€6.00
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FIND IT@ Practicum Report August 2005
Appendix E – Financial
Explanation of Figures for Cash Flows
Below is a list of the expenses that aren’t apparent from the Cash Flow forecasts:
•
•
•
€10,000 in Month 1: This is an approximation of the cost of fixed assets
needed to set up the business, namely computer equipment,
miscellaneous office furniture and so on.
Rent: The Company can rent office space in the Invent centre in DCU for a
range of prices, from €227 to €503. Whilst we will only need a mediumsized office space at the development stage (September to November
2005), we will be expanding with a sales team shortly after, requiring
offices costing €500 per month. The Invent centre should provide the
perfect framework to enable the company to work, prosper and grow over
time.
Miscellaneous costs cover everything from once-off payments like the fee
for registration of our company name (€252) to monthly bills like
stationery or travel costs. The figure of €3,000 in May 2006 includes
travelling to a conference in the US.
Since our service will need time to be developed, we foresee not having any sales
for the first three months of the company. The company will be sustained over
this period with funds from a grant as well as the funds provided by each
company member.
Mapping Fees
Digital map providers like Maporama or Google Maps provide their service
free of charge to users, but since we are using the maps in a commercial
product, we are required to pay a fee. Unfortunately, we couldn’t get a
quote for the actual cost of using Maporama’s map service in “FIND IT@”.
However, based on research of similar services, we calculated that the monthly
charge would be approximately €3,000.
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FIND IT@ Practicum Report August 2005
Venture Capital
Venture Capital Funding Available in Ireland from the following Companies:
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
Dublin Business Innovation Centre Seed Capital Fund
Executive Venture Partners
Hotorigin
Kernal Capital Partners
Mentor Capital
4th Level Ventures
ACT Venture Capital
Cross Atlantic Capital Partners / Crucible
Delta Partners
ICC Venture Capital
Trinity Venture Capital
3i
ABN-AMRO capital
Accel Partners
Advent
Benchmark Capital
B Ventures
Greylock Capital
Highland Capital
TL Com
Warburg Pincus
West LB Panmure
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FIND IT@ Practicum Report August 2005
Cash Flow for year ended 31/08/06
Details
Sept
Oct
Income
Sales
0
0
Venture Capital
Nov
Dec
Jan
Feb
Mar
Apr
May
June
July
Aug
Total
0
20,000
25,000
100,000
125,000
15,000
20,000
20,000
20,000
25,000
25,000
30,000 200,000
100,000
300,000
Expenditure
Map fees
Insurance
Telephone
Legal fees
Auditing
Utilities
Rent
Fixed Assets
VAT
Wages
PRSI
Marketing
Miscellaneous costs
Website fees
0
0
0
250
250
250
0
200
0
2,000
0
0
0
0
0
0
250
250
500
500
500
10,000
0
0
0 2,100
95
10,000 10,000 10,000
1,075 1,075 1,075
0
0 10,000
700
200
200
0
500
0
0
250
200
0
0
250
500
0
53
15,000
1,613
15,000
200
0
3,000
250
0
0
0
250
500
0
4,295
15,000
1,613
15,000
200
0
3,000
250
200
0
0
250
500
0
5,303
15,000
1,613
5,000
200
0
3,000
250
0
0
0
250
500
0
3,245
15,000
1,613
5,000
200
0
3,000
250
200
0
0
250
500
0
4,253
15,000
1,613
5,000
200
0
3,000
250
0
0
0
250
500
0
4,295
15,000
1,613
5,000
3,000
0
3,000
250
200
0
0
250
500
0
4,253
15,000
1,613
5,000
200
0
3,000
250
0
0
0
250
500
0
5,345
15,000
1,613
5,000
200
0
3,000 24,000
250
3,000
200
1,200
0
2,000
2,000
2,000
250
2,750
500
6,000
0 10,000
5,303 38,535
15,000 165,000
1,613 17,738
5,000 75,000
200
5,700
0
500
Total Expenditure
24,525 15,075 22,370
33,065
40,107
31,315
29,057
30,265
32,907
30,265
31,157
33,315 353,423
86,544 77,487 67,222
20,000 20,000 20,000
29,057 30,265 32,907
-9,057 -10,265 -12,907
77,487 67,222 54,315
54,315
25,000
30,265
-5,265
49,050
49,050
25,000
31,157
-6,157
42,893
42,893 93,000
30,000 300,000
33,315 353,423
-3,315 -53,423
39,578 39,578
Opening cash on hand 93,000 68,475 53,400 31,031 17,966 102,859
Total Income
0
0
0 20,000 125,000 15,000
Total Expenditure
24,525 15,075 22,370 33,065 40,107 31,315
Net Cash Flow
-24,525 -15,075 -22,370 -13,065 84,893 -16,315
Ending Balance
68,475 53,400 31,031 17,966 102,859 86,544
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FIND IT@ Practicum Report August 2005
Cash Flow for year ended 31/08/07
Details
Sept
Oct
Nov
Income
Sales
30,000 30,000 30,000
40,000
Expenditure
Map fees
Insurance
Telephone
Auditing
Utilities
Rent
Fixed Assets
VAT
Wages
PRSI
Marketing
Miscellaneous costs
Website fees
3,000 3,000 3,000
250
250
250
0
200
0
0
0
0
250
250
250
500
500
500
0
0
0
6,395 6,353 6,395
15,000 15,000 15,000
1,613 1,613 1,613
5,000 5,000 5,000
200
200
200
500
0
0
Total Expenditure
Feb
Mar
Apr
May
June
July
Aug
40,000
30,000
35,000
35,000
35,000
35,000
35,000
35,000 410,000
3,000
250
200
0
250
500
0
6,353
15,000
1,613
20,000
200
0
3,000
250
0
0
250
500
0
8,495
15,000
1,613
15,000
200
0
3,000
250
200
0
250
500
0
8,453
15,000
1,613
5,000
200
0
3,000
250
0
0
250
500
0
6,395
15,000
1,613
5,000
200
0
3,000
250
200
0
250
500
0
7,403
15,000
1,613
5,000
200
0
3,000
250
0
0
250
500
0
7,445
15,000
1,613
5,000
200
0
3,000
250
200
0
250
500
0
7,403
15,000
1,613
5,000
200
0
3,000
250
0
0
250
500
0
7,445
15,000
1,613
5,000
200
0
3,000 36,000
250
3,000
200
1,200
2,000
2,000
250
3,000
500
6,000
0
0
7,403 85,932
15,000 180,000
1,613 19,350
5,000 85,000
200
2,400
0
500
32,707 32,365 32,207
47,365
44,307
34,465
32,207
33,415
33,257
33,415
33,257
35,415 424,382
Opening cash on hand
Total Income
Total Expenditure
Net Cash Flow
39,578
30,000
32,707
-2,707
34,506
30,000
32,207
-2,207
32,299
40,000
47,365
-7,365
24,934
40,000
44,307
-4,307
20,627
30,000
34,465
-4,465
16,162
35,000
32,207
2,793
18,955
35,000
33,415
1,585
20,540
35,000
33,257
1,743
22,283
35,000
33,415
1,585
23,868
35,000
33,257
1,743
25,611 39,578
35,000 410,000
35,415 424,382
-415 -14,382
Ending Balance
36,871 34,506 32,299
24,934
20,627
16,162
18,955
20,540
22,283
23,868
25,611
25,196
36,871
30,000
32,365
-2,365
Dec
Jan
Total
25,196
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FIND IT@ Practicum Report August 2005
Cash Flow for year ended 31/08/08
Details
Sept
Oct
Nov
Income
Sales
35,000 35,000 35,000
40,000
Expenditure
Map fees
Insurance
Telephone
Auditing
Utilities
Rent
Fixed Assets
VAT
Wages
PRSI
Marketing
Miscellaneous costs
Website fees
3,000 3,000 3,000
250
250
250
0
200
0
0
0
0
250
250
250
500
500
500
0
0
0
7,445 7,403 7,445
15,000 15,000 15,000
1,613 1,613 1,613
5,000 5,000 5,000
200
200
200
500
0
0
Total Expenditure
Dec
Jan
Feb
Mar
Apr
May
June
July
Aug
Total
45,000
35,000
40,000
40,000
40,000
40,000
45,000
45,000 475,000
3,000
250
200
0
250
500
0
7,403
15,000
1,613
10,000
200
0
3,000
250
0
0
250
500
0
8,495
15,000
1,613
10,000
200
0
3,000
250
200
0
250
500
0
9,503
15,000
1,613
5,000
200
0
3,000
250
0
0
250
500
0
7,445
15,000
1,613
5,000
200
0
3,000
250
200
0
250
500
0
8,453
15,000
1,613
5,000
200
0
3,000
250
0
0
250
500
0
8,495
15,000
1,613
5,000
200
0
3,000
250
200
0
250
500
0
8,453
15,000
1,613
5,000
200
0
3,000
250
0
0
250
500
0
8,495
15,000
1,613
5,000
200
0
3,000 36,000
250
3,000
200
1,200
2,000
2,000
250
3,000
500
6,000
0
0
9,545 98,574
15,000 180,000
1,613 19,350
5,000 70,000
200
2,400
0
500
33,757 33,415 33,257
38,415
39,307
35,515
33,257
34,465
34,307
34,465
34,307
37,557 422,024
Opening cash on hand
Total Income
Total Expenditure
Net Cash Flow
25,196 26,439 28,024
35,000 35,000 35,000
33,757 33,415 33,257
1,243 1,585 1,743
29,767
40,000
38,415
1,585
31,352
45,000
39,307
5,693
37,045
35,000
35,515
-515
36,530
40,000
33,257
6,743
43,273
40,000
34,465
5,535
48,808
40,000
34,307
5,693
54,501
40,000
34,465
5,535
60,036
45,000
34,307
10,693
70,729 25,196
45,000 475,000
37,557 422,024
7,443 52,976
Ending Balance
26,439 28,024 29,767
31,352
37,045
36,530
43,273
48,808
54,501
60,036
70,729
78,172
78,172
Page 66
FIND IT@ Practicum Report August 2005
Cash Flow for year ended 31/08/06
Details
Sept
Oct
Nov
Income
Sales
0
0
0
20,000
Expenditure
Map fees
Insurance
Telephone
Legal fees
Auditing
Utilities
Rent
Depreciation
VAT
Wages
PRSI
Marketing
Miscellaneous costs
Website fees
3,000
250
100
0
0
250
500
167
4,295
15,000
1,613
15,000
200
0
Total
Net Profit/Loss
Feb
Mar
Apr
May
June
July
Aug
25,000
15,000
20,000
20,000
20,000
25,000
25,000
30,000 200,000
3,000
250
100
0
0
250
500
167
5,303
15,000
1,613
15,000
200
0
3,000
250
100
0
0
250
500
167
3,245
15,000
1,613
5,000
200
0
3,000
250
100
0
0
250
500
167
4,253
15,000
1,613
5,000
200
0
3,000
250
100
0
0
250
500
167
4,295
15,000
1,613
5,000
200
0
3,000
250
100
0
0
250
500
167
4,253
15,000
1,613
5,000
3,000
0
3,000
250
100
0
0
250
500
167
5,345
15,000
1,613
5,000
200
0
3,000
250
100
0
0
250
500
167
5,303
15,000
1,613
5,000
200
0
3,000 27,000
250
3,000
100
1,200
0
2,000
2,000
2,000
250
3,000
500
6,000
167
2,000
6,395 44,930
15,000 165,000
1,613 17,738
5,000 75,000
200
5,700
0
500
17,142 13,136 22,594 40,374 41,382 29,324 30,332 30,374 33,132
-17,142 -13,136 -22,594 -20,374 -16,382 -14,324 -10,332 -10,374 -13,132
31,424
-6,424
31,382
-6,382
34,474 355,067
-4,474 -155,067
0
0
0
250
250
250
100
100
100
2,000
0
0
0
0
0
250
250
250
500
500
500
167
167
167
2,100
95
53
10,000 10,000 10,000
1,075
1,075
1,075
0
0 10,000
700
200
200
0
500
0
Dec
Jan
Total
Page 67
FIND IT@ Practicum Report August 2005
Cash Flow for year ended
31/08/07
Details
Sept
Oct
Income
Sales
30,000 30,000
Nov
Dec
30,000
40,000
Expenditure
Map fees
Insurance
Telephone
Auditing
Utilities
Rent
Depreciation
VAT
Wages
PRSI
Marketing
Miscellaneous costs
Website fees
3,000 3,000
250
250
100
100
0
0
250
250
500
500
167
167
6,353 6,395
15,000 15,000
1,613 1,613
5,000 5,000
200
200
500
0
3,000
250
100
0
250
500
167
6,353
15,000
1,613
5,000
200
0
Total
Net Profit/Loss
32,932 32,474
-2,932 -2,474
32,432
-2,432
Jan
Feb
Mar
Apr
May
June
July
Aug
Total
40,000
30,000
35,000
35,000
35,000
35,000
35,000
35,000 410,000
3,000
250
100
0
250
500
167
8,495
15,000
1,613
20,000
200
0
3,000
250
100
0
250
500
167
8,453
15,000
1,613
15,000
200
0
3,000
250
100
0
250
500
167
6,395
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
7,403
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
7,445
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
7,403
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
7,445
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
7,403
15,000
1,613
5,000
200
0
3,000 36,000
250
3,000
100
1,200
2,000
2,000
250
3,000
500
6,000
167
2,000
7,445 86,982
15,000 180,000
1,613 19,350
5,000 85,000
200
2,400
0
500
49,574
-9,574
44,532
-4,532
32,474
-2,474
33,482
1,518
33,524
1,476
33,482
1,518
33,524
1,476
33,482
1,518
35,524 427,432
-524 -17,432
Page 68
FIND IT@ Practicum Report August 2005
Cash Flow for year ended
31/08/08
Details
Sept
Oct
Income
Sales
35,000 35,000
Nov
Dec
35,000
40,000
Expenditure
Map fees
Insurance
Telephone
Auditing
Utilities
Rent
Depreciation
VAT
Wages
PRSI
Marketing
Miscellaneous costs
Website fees
3,000 3,000
250
250
100
100
0
0
250
250
500
500
167
167
7,403 7,445
15,000 15,000
1,613 1,613
5,000 5,000
200
200
500
0
3,000
250
100
0
250
500
167
7,403
15,000
1,613
5,000
200
0
Total
Net Profit/Loss
33,982 33,524
1,018 1,476
33,482
1,518
Jan
Feb
Mar
Apr
May
June
July
Aug
Total
45,000
35,000
40,000
40,000
40,000
40,000
45,000
45,000 475,000
3,000
250
100
0
250
500
167
8,495
15,000
1,613
10,000
200
0
3,000
250
100
0
250
500
167
9,503
15,000
1,613
10,000
200
0
3,000
250
100
0
250
500
167
7,445
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
8,453
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
8,495
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
8,453
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
8,495
15,000
1,613
5,000
200
0
3,000
250
100
0
250
500
167
9,545
15,000
1,613
5,000
200
0
3,000 36,000
250
3,000
100
1,200
2,000
2,000
250
3,000
500
6,000
167
2,000
9,545 100,674
15,000 180,000
1,613 19,350
5,000 70,000
200
2,400
0
500
39,574
426
40,582
4,418
33,524
1,476
34,532
5,468
34,574
5,426
34,532
5,468
34,574
5,426
35,624
9,376
37,624 426,124
7,376 48,876
Page 69
FIND IT@ Practicum Report August 2005
Balance Sheet as at
31/08/
2005
Fixed Assets
Equipment
less Depreciation
Total Fixed Assets
10,000
2,000
Current Assets
Bank
Total Current Assets
39,578
Capital & Reserves
Share Capital
Venture Capital
Reserves
Net Liabilities
8,000
2,000
8,000
Net Assets
Current Liabilities
VAT
Utilities
Mapping Fees
Phone
Total Current Liabilities
2006
2007
6,000
2,000
6,000
25,196
4,000
78,172
39,578
25,196
78,172
47,578
31,196
82,172
6,395
250
3,000
7,445
250
3,000
9,645
93,000
100,000
-155,067
9,545
250
3,000
10,695
193,000
193,000
-172,499
37,933
47,578
12,795
-123,623
20,501
31,196
69,377
82,172
Page 70
FIND IT@ Practicum Report August 2005
Appendix F - Questionnaire Results
1. Are you Male or Female?
Female
40.00 / 40.0%
Male
60.00 / 60.0%
2. Please indicate the age group to which you belong?
Valid
Frequency
Percent
36
17
16
31
100
36.0
17.0
16.0
31.0
100.0
15 - 24
25 - 34
35 - 44
45 +
Total
Valid Percent Cumulative
Percent
36.0
36.0
17.0
53.0
16.0
69.0
31.0
100.0
100.0
3. Please indicate your occupation?
Frequency Percent
Valid
Valid Percent
Cumulative Percent
Home Maker
Manual/Skilled
Professional
9
8
35
9.0
8.0
35.0
9.0
8.0
35.0
9.0
17.0
52.0
Self Employed
Student
Unemployed
21
24
3
21.0
24.0
3.0
21.0
24.0
3.0
73.0
97.0
100.0
Total
100
100.0
100.0
Page 71
FIND IT@ Practicum Report August 2005
4. Do you have a mobile phone?
Valid
No
Yes
Total
Frequency
Percent
Valid
Percent
Cumulative Percent
2
98
100
2.0
98.0
100.0
2.0
98.0
100.0
2.0
100.0
5. Do you find it easy to use?
2.00 / 2.0%
No
22.00 / 22.0%
Yes
76.00 / 76.0%
Page 72
FIND IT@ Practicum Report August 2005
6. Do you use it more for business or personal use?
2.00 / 2.0%
Both
24.00 / 24.0%
Business
Personal
8.00 / 8.0%
66.00 / 66.0%
7. How often do you use it?
Age Group
Always at
Hand
Daily
Hourly
15 - 24
25
2
9
25 - 34
35 - 44
45 +
8
3
9
4
13
11
5
2
7
Weekly
2
Page 73
FIND IT@ Practicum Report August 2005
8. Do you think you utilise the maximum capabilities of your phone?
Yes
25.00 / 25.0%
2.00 / 2.0%
No
73.00 / 73.0%
9. Do you have a web-enabled phone?
2.00 / 2.0%
Dont Know
24.00 / 24.0%
Yes
53.00 / 53.0%
No
21.00 / 21.0%
Page 74
FIND IT@ Practicum Report August 2005
10.Do you use any of the premium text facilities on your phone? Email,
News, picture messaging etc.
Valid
No
Yes
Total
Frequency
Percent
Valid Percent
2
58
40
100
2.0
58.0
40.0
100.0
2.0
58.0
40.0
100.0
Cumulative
Percent
2.0
60.0
100.0
11.If the answer to question 10 is No why not?
Too Complicated
17.00 / 17.0%
Too Expensive
Other
26.00 / 26.0%
57.00 / 57.0%
12.Do you ever avail of downloads for your mobile, e.g. Ringtones or
games?
Valid
No
Yes
Total
Frequency
Percent
2
61
37
100
2.0
61.0
37.0
100.0
Valid Percent Cumulative
Percent
2.0
2.0
61.0
63.0
37.0
100.0
100.0
Page 75
FIND IT@ Practicum Report August 2005
13.Please indicate whether you are a “Pre-Paid” or “Bill Paying” mobile
phone user?
2.00 / 2.0%
Bill
31.00 / 31.0%
Pre - Paid
67.00 / 67.0%
14.Please rate your interest in the following features A- D as indicated
below.
1-Extremly Uninterested 2-Uninterested
interested
3-Average
a. Find your location on a map of a city
N
Minimum
Maximum
Attractions
98
1
4
4-Interested
Mean
2.66
5-Very
Std.
Deviation
1.139
Page 76
FIND IT@ Practicum Report August 2005
b. Be informed of interesting attractions in your vicinity e.g. Local
tourist attractions
N
Minimum
Maximum
Mean
Std.
Deviation
Shortest path
98
1
5
4.02
1.166
c. Get a shortest path from your location to a destination of your
choice.
N
Minimum
Maximum
Mean
Std.
Deviation
Find Location
98
1
5
3.53
1.095
d. In the case where you have a meeting or an appointment with
a business, have them send you details of how to get to their
premises.
Business
send you a
map
N
Minimum
Maximum
Mean
98
1
5
4.35
Std.
Deviation
1.104
15.Have you ever had difficulty getting to a destination within a city?
2.00 / 2.0%
No
15.00 / 15.0%
Yes
83.00 / 83.0%
Page 77
FIND IT@ Practicum Report August 2005
17. Would you pay for any of the above services to your mobile phone?
2.00 / 2.0%
No
12.00 / 12.0%
Yes
86.00 / 86.0%
18. Please indicate the amount in cents that you would expect to pay
for this service based on a pay per map service.
Would you pay for above
Services?
No
Yes
Total
Amount Willing to pay:
Mean
N
63.33
123.02
117.37
9
86
95
Std. Deviation
27.839
92.531
90.094
Page 78
FIND IT@ Practicum Report August 2005
19. Would you prefer to use digital or traditional paper maps?
paper
30.00 / 30.0%
2.00 / 2.0%
Digital
68.00 / 68.0%
Page 79