the nanoboxx by mikael thakur
DESCRIPTION
In 2007 Mikael Thakur was aiming to commercialize the world’s smallest portable computer: the Nanoboxx™. Measuring approximately 5x2x2 inches, Nanoboxx™ has no physical keyboard and no physical monitor, yet boasts a full-size laser projected keyboard and full-size projected display. By incorporating innovations in projection technology, Nanoboxx™ combines the pocket-sized convenience of a PDA with the computing power and ease of use of a laptop. Portability, durability, and feature pack: the Nanoboxx™ will go everywhere your business takes you.The following is the business plan for the Nanoboxx.TRANSCRIPT
Business Plan Prepared by:
Mikael Thakur
Schulich School of BusinessYork UniversityMasters of Business Program
Nanoboxx™ - Convergence comes of age
AGARTHA TECHNOLOGY INC.EXECUTIVE SUMMARY
Agartha Technology Inc. (Agartha Inc.) is aiming to commercialize the world’s smallest portable
computer: the Nanoboxx™. Measuring approximately 5x2x2 inches, Nanoboxx™ has no physical
keyboard and no physical monitor, yet boasts a full-size laser projected keyboard and full-size
projected display (figure 1). By incorporating innovations in projection technology, Nanoboxx™
combines the pocket-sized convenience of a PDA with the computing power and ease of use of
a laptop. Portability, durability, and feature pack: the Nanoboxx™ will go everywhere your
business takes you.
Figure 1: Agartha Inc.’s rendition of the Nanoboxx™. The Nanoboxx™ is a portable computer measuring approximately 5x2x2 inches that projects both the display and the keyboard and is targeted to businesses and the mobile professionals.
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The miniaturization of portable computing and telecommunication devices faces an inherent challenge:
as devices get smaller, so do their keyboards and displays, which makes them uncomfortable to use.
Nanoboxx™ overcomes this challenge.
Product: What makes Nanoboxx™ unique is its innovative technology which uses low cost
holographic laser projection and diffractive mirror technology to project a full colour, high-
quality graphical user interface (GUI) on virtually any surface, eliminating the challenge of small
displays many small portable devices face. In fact, the projected GUI has a diagonal
measurement of approximately 10-12 inches, which is comparable to that of many laptops. The
embedded micro projector has no moving parts, consumes minimal power and does not need a
fan to dissipate heat.
Nanoboxx™ also projects a virtual laser keyboard to generate a full-size QWERTY keyboard that
recognizes tapped strokes through an optical recognition mechanism.
Agartha Inc.’s Nanoboxx™ is perfect for general business computing, gaming, and web browsing
and all the projection technologies (for both the keyboard and the GUI) are already fully
functional and available on the market individually from different suppliers. The initial market
niche for the Nanoboxx™ within the U.S. and Canada is estimated to be worth over $1.0 billion.
Agartha Inc. intends to enter this market swiftly by partnering with a third party and
outsourcing manufacturing. Future growth opportunities include an expansion of the current
product into new markets and the development of a line of innovative peripherals and nano
devices.
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Competition: Nanoboxx’s™ competition stems from the advancement of portable computing
devices such as laptops, PDAs and Smartphone’s. Yet the Nanoboxx™ offers several benefits
over these other portable electronic devices. Nanoboxx’s™ functionality is not limited by the
size of its screen or its keyboard. The projected keyboard and screen can be displayed on flat or
curved surfaces and allow business persons to conduct presentations on the fly. The trend
toward miniaturization and the evolution of more powerful computer and projection
technologies emphasize the demand for smaller, yet practical computing. Agartha Inc. is
uniquely positioned to capitalize on this demand.
The Management Team: Agartha Inc.’s management team consists of Cristian Blidariu, Orin
Zhao, Rudi Lof, and Mikael Thakur. In addition to the fact that each member is currently
completing an MBA, the team represents a strong blend of complementary skills and diverse
business experience: Orin and Mikael have worked intensively in the high tech industry while
Rudi and Cristian have intensive corporate law experience and are presently completing the
requirements of a law degree concurrent with their MBA’s. Therefore, a matrix management
style will be employed in order to utilize all skill sets to the furthest extent. As the company
grows, additional professional help will be hired as the need for such personnel becomes
significant and justifiable.
Financial Strategy: Agartha Inc. is seeking seed capital of $100,000 for initial company
operations to:
Secure the license for the GUI micro projector from Microvision Inc; Secure the license for the laser keyboard from I-Tech; Develop a pre-manufacturing prototype; Conduct negotiations with potential industrial partners and customers; and
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Begin alpha-testing with select corporate collaborators.
Formal operations will begin in the second half of 2009. Approximately one year later, Agartha
Inc. will raise an additional $3 million in private equity, corporate partnerships and federal
grants to:
Begin full-scale product development; Hire a seasoned CEO and management team; Research and development of new product lines; Identify outside vendors and contract the design and manufacture of the Nanoboxx™;
and Develop corporate partnership efforts.
Agartha Inc. intends to raise another $5 million in follow-on investment in the third year of
operations to scale-up its production and new product development efforts. The initial investor
will receive an equity stake in the company and preferential rights to invest in subsequent
equity rounds.
Possible exit strategies for the investor include a leveraged buyout by management, the sale of
the entire company to a major consumer, or taking the company public.
The Nanoboxx™ is an exciting and potentially very rewarding investment opportunity. Agartha
Inc.’s management team looks forward to further discussions with you regarding this Business
Plan.
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TABLE OF CONTENTS
AGARTHA TECHNOLOGY INC.EXECUTIVE SUMMARY.................................................................................................................................2
Agartha Technology Inc. (Agartha Inc.) is aiming to commercialize the world’s smallest portable computer: the Nanoboxx™. Measuring approximately 5x2x2 inches, Nanoboxx™ has no physical keyboard and no physical monitor, yet boasts a full-size laser projected keyboard and full-size projected display (figure 1). By incorporating innovations in projection technology, Nanoboxx™ combines the pocket-sized convenience of a PDA with the computing power and ease of use of a laptop. Portability, durability, and feature pack: the Nanoboxx™ will go everywhere your business takes you........................2
1.0 COMPANY OVERVIEW............................................................................................................................9
1.1 The Idea.............................................................................................................................................9
2.0 THE PRODUCT......................................................................................................................................11
2.1 Projection Technology.....................................................................................................................11
2.1.1 The Display................................................................................................................................11
.......................................................................................................................................................12
PicoP™ projector component............................................................................................................12
Canadian Dime...................................................................................................................................12
Figure 2..............................................................................................................................................13
2.1.2 How The Projector Works.........................................................................................................13
The desired image is deconstructed into electronic signals. The electronic signals drive red, green, and blue laser light sources with intensity and color formation. Spectrally pure light delivers brilliant colors using tiny red, green, and blue lasers. Red, green, blue laser light paths are combined into a single modulated light path that represents a full pallet of colors. Light output from the combiner optic is directed onto the MEMS scanning mirror which reproduces the desired image pixel by pixel. For complete specifications of the PicoP™ display engine, please refer to Appendix B.....................13
2.1.3 The Keyboard............................................................................................................................13
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The Nanoboxx™ will also embed a virtual laser keyboard by partnering with I-Tech Inc. The virtual keyboard uses state of the art infrared & laser technology to project a full-size keyboard onto any flat surface. This virtual keyboard acts exactly like any other "ordinary" keyboard and uses an optical recognition mechanism to recognize inputted keys. For the first time mobile device users can type normally and taking the pain and frustration out of existing minuscule keyboards and handwriting recognition software that current pocket PC’s have incorporated. Figure 3 shows how the I-tech keyboard is displayed........................................................................................................13
2.1.3 PC components........................................................................................................................15
2.2 Benefits............................................................................................................................................15
3.0 MARKET ANALYSIS...............................................................................................................................15
3.1 Market Segmentation......................................................................................................................16
3.2 Customer Analysis........................................................................................................................16
3.2.1 Target Market Size....................................................................................................................18
The initial market niche for the Nanoboxx™ within the U.S. and Canada is estimated to be worth over $1.0 billion. The worldwide handheld PC revenue was nearly $4.1B in 2000, which increased to over $23B in 2005. According to technology analysts ET Forecasts, worldwide handheld PC revenue will reach over $65B in 2011 for a compound annual growth rate of nearly 28% between 2000 and 2011..............18
3.3.1 Promotions...............................................................................................................................21
3.3.2 Distribution...............................................................................................................................22
3.4.1 Direct........................................................................................................................................23
There are around 20 handheld computer manufacturers around the world, such as OQO, U.S.A.; Samsung, Korea; PBJ, Japan; Han Wang, China, etc. Their products are the direct competitors of the Nanoboxx™. The competition is not intensive because the space for such a startup market to grow is huge. Therefore, the present major competitors of the Nanoboxx™ are the PDA and laptops. Regarding to the unique advantage of our products, it is not difficult for the Nanoboxx™ to win a credible market share. All these competitors have a product that do not have a full keyboard nor a full-size display...................................................................................................................................23
3.4.2 Indirect......................................................................................................................................23
4.0 OPERATIONS........................................................................................................................................23
4.2 Operating Complexity......................................................................................................................24
5.0 SUMMARY OF FINANCIALS..................................................................................................................26
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6.0 MANAGEMENT....................................................................................................................................29
APPENDICES...............................................................................................................................................31
1.0 COMPANY OVERVIEW
1.1 The Idea
What if you could embed a projector, a laser keyboard, and PC components into a box that can
fit into your pocket? That’s the idea behind Nanoboxx™ by Agartha Inc., a Toronto Ontario
base startup that is looking to commercialize the world’s smallest portable computer.
1.2 Genesis of Concept
In late 2006, a technological evolution occurred with the prospect of producing a projector the
size of a dime. In early 2007 this idea became reality. The application of the dime sized
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projector seemed limitless, and as a result the idea of the Nanoboxx™ was created.
The mission of Agartha Inc. is to commercialize new projection technology with existing
technology and transform the portable handheld computing industry with the introduction of
the Nanoboxx™. The management team of Mikael Thakur, Cristian Blidariu, Rudi Lof, and Orin
Zhao, has identified several windows of opportunity for the application of this revolutionary
technology in the portable PC industry and together constitute the nucleus of the expertise
required to take advantage of this industry.
1.3 Strategy and Objectives
Agartha Inc. has identified a significant market opportunity for innovative and scalar technology
products and developed Nanoboxx™ to capture this market as the first mover. In the short term
Agartha Inc. plans to gain funding for initial working capital, secure the license for the
projection technology and form cooperative partnerships with designers, manufacturers, and
resellers to enter the market swiftly. In the medium term the company will expand its product
range by developing other innovative portable projection products such as the windshield
projected GPS. Agartha Inc.’s long-term objectives are to continue R&D, enter new markets,
and capture 1-5% of the $1Billion portable electronic computing industry.
2.0 THE PRODUCT
Agartha Inc. is aiming to solve the keyboard and display bottleneck seen in portable computing
devices by introducing the Nanoboxx™. The Nanoboxx™ is a portable computer measuring
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approximately 5x2x2 that will bridge the gap between a pocket PC and laptop. Finished in piano
black, this innovative product displays both the display and keyboard on virtually any surface.
For detailed product specifications please refer to Appendix A.
2.1 Projection Technology
2.1.1 The Display
Agartha Inc. will partner with U.S. based Microvision Inc. to bring to market the next generation
of portable projection technology. The Nanoboxx™ will embed Microvision Inc.’s PicoP™
display engine which contains Microvision's patented MEMS scanner. PicoP™ is an ultra
miniature projection module capable of producing full color, high-resolution images but small
enough and low power enough to be embedded directly into the Nanoboxx™ and enable a
large screen viewing experience. The ultra miniature PicoP™ display engine is comprised of 1)
electronics, 2) laser light sources,3) combiner optic, and 4) MEMS scanning mirror. These four
components of the PicoP display engine are brought to life using Microvision’s proprietary software
which Agartha Inc. will license. The desired image is reproduced in WVGA format onto any projection
surface. Figure 2 shows the relative size of the PicoP™ projector module relative to a dime.
PicoP™ projector componentCanadian Dime
Figure 2
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2.1.2 How The Projector Works
The desired image is deconstructed into electronic signals. The electronic signals drive red,
green, and blue laser light sources with intensity and color formation. Spectrally pure light
delivers brilliant colors using tiny red, green, and blue lasers. Red, green, blue laser light paths
are combined into a single modulated light path that represents a full pallet of colors. Light
output from the combiner optic is directed onto the MEMS scanning mirror which reproduces
the desired image pixel by pixel. For complete specifications of the PicoP™ display engine,
please refer to Appendix B.
2.1.3 The Keyboard
The Nanoboxx™ will also embed a virtual laser keyboard by partnering with I-Tech Inc. The
virtual keyboard uses state of the art infrared & laser technology to project a full-size keyboard
onto any flat surface. This virtual keyboard acts exactly like any other "ordinary" keyboard and
uses an optical recognition mechanism to recognize inputted keys. For the first time mobile
device users can type normally and taking the pain and frustration out of existing minuscule
keyboards and handwriting recognition software that current pocket PC’s have incorporated.
Figure 3 shows how the I-tech keyboard is displayed.
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Figure 3: Laser projected keyboard. Source: I-Tech Inc.
2.1.4 How The Keyboard Works
The virtual laser keyboard projects a template of the desired interface and the keyboard is
illuminated by a specially designed holographic optical element. Then an infra red plane of light
is generated just above and parallel to the interface surface. This light is invisible to the user.
The reflected light from the users interactions with the interface surface is passed though an
infra-red filter and an imaged on to a CMOS image sensor in the sensor module. Custom
hardware embedded in the sensor chip within the Nanoboxx™ then makes a real time
determination of the location of the reflected light. Tapped keys are recognized and processed
through an OCR mechanism. For full specifications of the virtual keyboard please review
Appendix C.
2.1.3 PC components
The PC components of the Nanoboxx™ are sourced from VIA Technology Inc. of Taiwan. VIA
Technology Inc. is a complete platform provider and is the foremost fab-less supplier of market-
leading core logic chipsets, low power x86 processors, advanced connectivity, multimedia,
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networking and storage silicon, and complete platform solutions that are driving system
innovation in the PC and embedded markets. VIA has also leads the market in miniaturization
of the platform, in order to allow the system design innovation that will drive the next
generation of personal electronics form factors. For complete technical specifications of the
platform that Agartha Inc. will use in the Nanoboxx™, please refer to Appendix D.
2.2 Benefits
Some of the benefits of the Nanoboxx™:
• Conference anywhere and have impromptu meetings on the fly;• Work on a full size screen and keyboard. No more squinting and slow data processing entry;• Give added dimension to videos and images otherwise limited by a tiny screen;
• Watch videos, share images, and truly have a mobile office in your pocket.• improve work efficiency through wireless connectivity
3.0 MARKET ANALYSIS
The Nanoboxx™ targeted niche is the high value-added handheld PC market. The traditional PCs
industry is under the threat of permanent decline from a revenue perspective. The targeted
handheld computer market was exploded 2 years ago in filling in the gap between personal
digital assistants (PDA) and laptops by the introduction of thumb computing. This niche market
grows very fast in an approximately 28% compound annual growth rate (Refer to Appendix E
for market share analysis). The entry of the Nanoboxx™ will extend this market tremendously
above its present horizon. However, the handheld computer market is relatively new and the
market of the Nanoboxx™ is even prior its infant stage, it is essential to cultivate the potential
market at the start of the product by appropriate promotions.
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3.1 Market Segmentation
The market for the Nanoboxx™ will overlay the current PDA market and overlap a portion of
traditional PC/Laptop market. The permeation of PCs, both desktops and laptops, led to the
human’s reliance of personal computers and naturally resulted in the born of handheld
computer. PDA was the pioneer product to response the needs. However, the weak
functionality and poor performance of PDA was not able to satisfy the major body of
customers. Hence, the market for PDA will finally end into 2 categories: the advanced cell
phone, Smartphone, and the powerful, practical and portable handheld computer. The
Nanoboxx™ is designed to fulfill the demands for the handheld computers.
3.2 Customer Analysis
Business users are a premium segment of the overall mobile market, not only spending more
on innovative technologies but also adopting advanced portable computing devices. The
Nanoboxx™ will initially target the mobile business person market. These users are willing and
eager to receive the benefits that converged devices offer. Choosing the right equipment for
the road is essential and it can make the difference between making the sale and losing an
account. This lucrative niche market has deep pockets, want the latest technological and
innovative devices that come to market, and usually work for large global organizations and do
extensive travelling and are involved in numerous presentations.
ABI Research1 analysis shows that the average revenue per user (ARPU) among business users is
24% higher than among personal users. For mobile devices, the gap is even wider - business
1 http://www.abiresearch.com
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users spend 80% more than personal users. Such users deliver the highest ARPU for both
business applications and hardware. Combining the two will pay dividends. Agartha Inc.
intends to capitalize on this lucrative market.
3.2.1 Target Market Size
The initial market niche for the Nanoboxx™ within the U.S. and Canada is estimated to be worth
over $1.0 billion. The worldwide handheld PC revenue was nearly $4.1B in 2000, which
increased to over $23B in 2005. According to technology analysts ET Forecasts, worldwide
handheld PC revenue will reach over $65B in 2011 for a compound annual growth rate of nearly
28% between 2000 and 2011.2
The major portion of the initial revenue will come from the North American
PDA market which is estimated to be worth around $2.0 billion. In the
medium run, the market for the Nanoboxx™ will be expanded to overlap the
traditional North American PCs market, especially the market for laptops.
The estimated market value is over $4.0 billion, a major portion from the
global $4.0 billion PDA market and a slight portion from the global $201.0
billion revenue of the PCs industry.
The Nanoboxx™ will lead the PCs industry trends in the end of the day. The
long run market value of the Nanoboxx™ is estimated to be more than $65
billion based on the compound annual growth rate of handheld computers.
The size of relative market is listed in following table:
2 http://www.etforecasts.com/products/ES_SP-PDA.htm
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HANDHELD COMPUTER SEGMENTS
Unit Sales 200020032005200620082010
USA Market:
PDA Sales (#M) 5.98 6.09 6.21 6.31 6.54 6.81
Smartphone Sales (#M) - 0.34 3.77 7.58 16.37 26.39
Handheld PC Sales (#M) - - 0.008 0.045 0.27 1.18
Handheld Computer Sales (#M) 5.98 6.43 9.99 13.94 23.18 33.98
Worldwide Market:
HANDHELD MARKET IN Q3 2007
Q3 2007Q3 2006Growth
Vendor Shipments
Share, %Shipments
Share, %YTY
Palm 325,000 44.6 450,000 37.5 -27.8
HP 198,100 27.2 240,000 20.0 -17.5
Mio 81,903 11.2 117,557 9.8 -30.3
Fujitsu-Siemens 39,519 5.4 25,354 2.1 55.9
Sharp 17,500 2.4 101,000 8.4 -82.7
Others 66,872 9.2 267,634 22.3 -75.0
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Source: IDC. Vendors shipped 728,894 handheld devices in Q3 2007, approximately 1.5% more than Q2 2007 but 39.3% less from Q3 2006.
Current market circumstances have opened opportunities for super-small devices. The
technological foundation to make robust, miniature computers finally exists; another factor at
play supporting handhelds is that consumers and corporate buyers have become acclimated to
portability. The explosive growth, until recently, of handheld devices and mobile phones
established the market for portable devices. Once the infrastructure for wireless networking is
established, ultra-portable PCs will become more popular than PDAs because they can do more
By 2011, research company IDC expects portable computers to comprise 66% of all corporate
PCs sold, up from 40% in 2006, and 71% of all consumer PCs sold, up from 44%.
3.3 Target Market Segment Strategy
The Nanoboxx™ is an innovative, completely original product, which is targeting at the market
niche for the powerful and practical handheld computers, which recently has experienced
explosive growth. The age of electronic convergence has arrived as consumers are demanding
smaller streamline full functional computing products. Therefore, it is necessary to educate the
potential consumers in the initial stage. We choose to start with the U.S. and Canada as the
testing market according to the North America’s leading position in the portable electronic
devices market. The largest group of technology enthusiasts and fans are in this area.
Soon as the result from this testing market is positive, Agartha Inc. will head to formal
manufacturing stage, which we define as the medium run. In order to keep the image of trend
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leader, Agartha Inc. will launch a series design competitions of customized Nanoboxx™
regarding to the coating, shape, peripheral, etc.
3.3.1 Promotions
In the initial stage, it is convenient and effective to bring forth the Nanoboxx™ through
professional computer journalisms and websites to technology enthusiasts, who are usually the
trend change agents of the high-tech products market. After releasing the specifications of the
Nanoboxx™ to professional computer journalisms and websites and sending samples to these
media, we will open for public subscription in short time. A number between 5,000 to 10,000
devices are expected to be sold initially by subscription such as through Stuff magazine and
online.
After the initial stage, the product will be promoted on CNBC and Bloomberg and then all major
consumer and electronic shows as well as technology and financial magazines such as Fortune
and Wired, in order to attract the major body of our potential customers, the business
professionals.
3.3.2 Distribution
Regarding to the initial promotion manner, we have determined that we will distribute the
Nanoboxx™ through direct mail in the beginning to fulfill the subscription orders.
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In the medium run, Agartha will setup representative offices in major cities in North America
and utilize the traditional PCs sales channel, such as Best Buy, Future Shop to distribute the
Nanoboxx™.
In a long run, Agartha will setup branch offices in major cities around the world to cooperate
with electronic retailers worldwide. Agartha Inc. will also entertain the opportunity of a joint
venture with industry giants such as Dell, Compaq, and Microsoft.
3.4 Competitor Analysis
The Nanoboxx™ will compete with both the PCs industry players and all other portable
electronic devices manufacturers.
3.4.1 Direct
There are around 20 handheld computer manufacturers around the world, such as OQO, U.S.A.;
Samsung, Korea; PBJ, Japan; Han Wang, China, etc. Their products are the direct competitors of
the Nanoboxx™. The competition is not intensive because the space for such a startup market
to grow is huge. Therefore, the present major competitors of the Nanoboxx™ are the PDA and
laptops. Regarding to the unique advantage of our products, it is not difficult for the
Nanoboxx™ to win a credible market share. All these competitors have a product that do not
have a full keyboard nor a full-size display.
3.4.2 Indirect
However, all portable electronic devices are the potential competitors of the Nanoboxx™. The
usage of the Nanoboxx™ is unlimited so that it is very likely for the Nanoboxx™ to invade in the
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markets for other portable electronic devices, such as portable game consoles, Smart phones,
etc.
4.0 OPERATIONS
4.1 Plans for Production
In order for Agartha Inc.’s managers to focus on its core competencies, the company will want to:
rely on contracted specialists to achieve even faster speed to market; maximize the flexibility of their capital resources by eliminating unnecessary
manufacturing equipment; increase their market responsiveness by reducing their organizational structure; maintain a laser-like focus on their markets, with no manufacturing-related distractions; lower costs while maintaining and even enhancing quality.
At every stage along the Electronics Manufacturing Services (EMS) supply chain, it makes sense
for Agartha Inc. to partner with outsourcing specialists for private label production. This
somewhat fragmented structure has created profitable opportunities for product design for
niches within the portable computing industry. Appendix D shortlist’s potential EMS candidates.
By doing this Agartha Inc. will have first mover advantage such as cost advantage, less
competition, secure important channels, and price position for customers.
4.2 Operating Complexity
The following are those areas of particular concern and importance to management:
1. Timing will play a critical role in the success of the Nanoboxx™. The key variables are
• Product readiness• Financing• Approach to marketplace
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• Production, from delivery of components to assembly, inventory & shipping procedures.
2. Financial projections used are “best” estimates and all financial needs and operating costs
have been based on what is considered to be the most likely volume of sales achievable.
Because selling activity will begin in early 2009 reaction of the marketplace should be clear by
late spring. Decisions can still be made to cut back or to gear up for the 2009 seasons.
3. Financing would be another major consideration if sales were much in excess of
expectations, particularly because we must assume that early orders are going to require an
accompanying letter of credit if EMS is outsourced. For this the marketing plan is meant to
guard against some of these problems and is specially geared to reach upscale technology
retailers that will commit early to carry the “limited production” of the first year.
4.3 Production plan
The housing will be manufactured in Mainland China(Guangzhou). The labor costs and the cost
for raw material are competitive. Agartha Inc. will also outsource the assembly and testing of
the actual product to a reputable EMS an drop shipped to a storage facility in Canada, then
shipped to retailers.
4.4 Future Potential
The new technological innovations that have emerged during the development of the
Nanoboxx™ have significance for the future of the company as well. By benchmarking the
success of Apple’s iPod’s, Agartha Inc. will introduce enhanced feature packed versions of the
Nanoboxx™. At the end of the product lifecycle, Agartha Inc will cannibalize the product and
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introduce a more innovative version developed through intensive R&D. Concurrently the
company will release a plethora of peripherals for the Nanoboxx™ as well as cellular phones
and handheld PC’s. In addition, as product quality increased, specially designed device for the
mass market become possible at reasonable costs.
5.0 SUMMARY OF FINANCIALS
The major startup investment is the research and development costs, which include the
expenditure for securing license with major parts manufacturers, such as Microvision, I-Tech
and VIA. The other expenses include administration costs and travel expenses. The only
marketing expense in the startup period is to send out prototype models to few electronic
community websites, such as ZDNet.
In 2009, the projected sales volume is 1,000 units. All the sales are expected to be from internet
subscription. The units will be distributed by direct mail. The selling price is $800 per unit and
the distribution cost which include insurance and mail cost is $50 per unit.
The manufacturing and transportation costs are totally $60 per unit. The material costs are
$263 per unit. In this year, an R&D expenditure of $100,000 is allocated in order to perfect the
Nanoboxx™. Meanwhile, one full-time general manager and one full-time product manager will
be hired at a cost of $700,000.
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In order to maintain the operation, Agartha Inc. would introduce another $3 million
investment. The total intangible assets will be evaluated at a price of $1.1 million. The total
income at 2009 is estimated to be negative $373,000. The cumulated loss is $100,000.
In 2010, there are 2,000 units expected to be sold through internet and another 5,000 units to
be sold by retailers. The retailer price will be set at $750 per unit and the wholesaler price will
be set at $350 per unit. The material, manufacturing and transportation costs will decrease by
$60 to $263 per unit. The balance from product is estimated to be more than $1 million.
However, Agartha Inc. will invest $1.25 million in R&D, marketing and Administration in order
to look for future growth. The total loss at 2010 is expected to be $11,000.
From 2011, Agartha Inc. will use electronic devices retailers as the major distribution channel of
the Nanoboxx™. 20,000 units are expected to be sold through this channel, though 1,000 units
are still expected to be sold through the Internet. The production profit is estimated to be
above $2 million. However, Agartha Inc. will keep invest $3 million in R&D, marketing and
Administration in order to seek a high future growth. The total loss at 2011 is expected to be
$348,000.
At 2011, Agartha Inc. intends to raise another $5 million in follow-on investment to seek a
potential future growth. The total intangible assets is expecting to be valued at $8.2 million.
At 2012, we are expecting a burst in sales to reach 100,000 units. With the continuing
investment in R&D and marketing, the total EBIT will reach $5.5 million. The Pro Forma Income
Statements and Balance Sheets are provided as following:
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Pro Forma Income Statement 2008 2009 2010 2011 2012Revenue
Revenue f rom subscri pti on $0 $800, 000 $1, 500, 000 $700, 000 $550, 000Revenue f rom whol esal ers $0 $0 $1, 750, 000 $7, 000, 000 $30, 000, 000Total $0 $800, 000 $3, 250, 000 $7, 700, 000 $30, 550, 000
CostsManufacturing and Transporation Costs $0 $60, 000 $420, 000 $1, 050, 000 $5, 050, 000
Material Costs $263, 000 $1, 491, 000 $3, 948, 000 $15, 958, 000Distribution Costs $50, 000 $100, 000 $50, 000 $50, 000
Nanoboxx aspect desi gn $3, 000Nanoboxx box prototype $3, 000Nanoboxx prototype R&D $12, 000Secure l i cense wi th Mi crovi si on $30, 000Secure l i cense wi th I -Tech $20, 000Secure l i cense wi th VI A $10, 000
Total R&D Cost $78, 000 $100, 000 $250, 000 $1, 000, 000 $1, 000, 000Travel Expense $7, 000I nternet communi ty promoti on $3, 000General Admi ni strati on $12, 000
Total Marketing & Admin Costs $22, 000 $700, 000 $1, 000, 000 $2, 000, 000 $3, 000, 000Total $100, 000 $1, 173, 000 $3, 261, 000 $8, 048, 000 $25, 058, 000Gross Margi n ($100, 000) ($373, 000) ($11, 000) ($348, 000) $5, 492, 000
Tax & I nterest $0 $0 $0 $0 $1, 373, 000Total $0 $0 $0 $0 $1, 373, 000Net Income ($100, 000) ($373, 000) ($11, 000) ($348, 000) $4, 119, 000
Pro Forma Balance Sheet 2008 2009 2010 2011 2012Assets
Cash and cash equi val ents $100, 000 $2, 250, 000 $1, 000, 000 $3, 500, 000 $5, 000, 000I nventory and Accounts recei vabl e $0 $0 $0 $0 $4, 119, 000I ntangi bl e Assets $1, 100, 000 $1, 100, 000 $8, 200, 000 $6, 000, 000Total $100, 000 $3, 350, 000 $2, 100, 000 $11, 700, 000 $15, 119, 000Liabilities and Shareholders' Equity
Accounts payabl e $0 $0 $0 $0 $0Long- term debt $0 $0 $0 $0 $0Total $0 $0 $0 $0 $0Shareholders' equity $100, 000 $4, 100, 000 $4, 100, 000 $14, 200, 000 $14, 200, 000Retained Earnings ($750, 000) ($2, 000, 000) ($2, 500, 000) $919, 000Total $100, 000 $3, 350, 000 $2, 100, 000 $11, 700, 000 $15, 119, 000
Please see the detail costs/benefits chart in Appendix F
6.0 MANAGEMENT
A key objective of Agartha Inc. is to be profitable early, while being nimble enough to grow
rapidly and profitably as demand grows. Taking into account these objectives, as well as a
desire to be good stewards with the resources of the corporation, Agartha Inc has developed a
plan for a flexible management team that provides for what is needed when it is needed.
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6.1 Start-Up Team
The president of Agartha Inc. is Mikael Thakur. Mr. Thakur has more than four years of
experience in the High Technology Industry and is presently in the MBA program at the Schulich
School of Business. Mr. Thakur is a dynamic entrepreneur, results oriented professional with a
proven ability to establish rapport and build relationships’ with people from diverse
backgrounds. Creative with a flair for forecasting trends with solid academic preparation. He is
also adept at handling new challenges with a wide range of industry knowledge such as
marketing, e-business, equities, and supply chain management. Mr. Thakur is recognized by
clients and colleagues as a consummate professional with a high degree of personal integrity.
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APPENDICES
Appendix ADetailed Product Specifications of the Nanoboxx™
PROCESSOR & CHIPSET - 1.5GHz VIA C7M ULV (also available with 1.2GHz and 1.0GHz)- VIA VX700 with integrated GPU
GRAPHICS - Embedded with MPEG-2, MPEG-4, WMV9 Hardware accelerationOPERATING SYSTEM - Ubuntu Linux + OpenOffice
- Windows Vista® Ultimate, Business (optional)- Windows® XP Tablet PC Edition 2005, Windows® XP Professional, Windows® XP Home(optional)
STORAGE DRIVE & MEMORY - HDD capacity: 1.8 inch HDD 40 - 120GB- HDD protection: shock-mounted, drop detect technology- memory: DDRII 512M - 1GB
DISPLAY - Microvision PicoP™ Display Engine
- native resolution: WVGA (848 x 480)- Brightness: 10 Lumens- size: 200mm – 2000mm (Ideal) Image size (diagonal) = image-to-projector distance- external display support: VGA, HDMI, & DVI monitors up to 1920x1200 resolution
INPUT virtual laser full-size QWERTY keyboard, dedicated mouse
WIRELESS AND NETWORKING Wireless LAN: Atheros tri-mode 802.11a/b/g Wi-Fi with diversity Bluetooth 2.0 with EDR VGA/Ethernet adapter Wireless LAN: Atheros tri-mode 802.11a/b/g Wi-Fi with diversity Bluetooth 2.0 with EDR VGA/Ethernet adapter
PORTS audio jack: 3.5mm line out/line in video out: HDMI port, VGA/Ethernet adapter (included) 1 docking/power connector 1 USB 2.0 port
BATTERY type: removable lithium-ion polymer capacity: 4500mAh (standard), 9000mAh (double capacity) estimated life: up to 3 hours (standard), 6 hours (double capacity)
SECURITY embedded security: TPM v1.2 security engine: VIA Padlock™ hardware AES encryption engine
DIMENSIONS size: 5.0”(W) x 2.0”(H) x 1.8”(D) weight: 1.0 lb with standard battery (may vary based on hardware configuration)
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Appendix BMicrovision Inc.’s PicoP™ Display Engine Specifications
Display
Technology
Microvision PicoP™ Display Engine: Single Bi-axial MEMS Scanning Mirror Technology
Performance Resolution WVGA (848 x 480)
Brightness 10 Lumens
Aspect Ratio 16:9 Native
Light Sources Red, green, and blue lasers
Refresh Rate 60 Hz
Color Range 16-bit, greater than 150% of NTSC
Projection Lens None: image always in focus, no manual adjustment
Image Size 200mm – 2000mm (Ideal) Image size (diagonal) = image-
to-projector distance
Dimensions Volume ≈120 cc, including battery
Weight ≈ 220 grams, including battery
Video Inputs RGB (VGA) Composite
(NTSC/PAL) S-Video
Connects to cell phones, personal media players, laptops,
digital cameras and more
Power Internal Lithium Polymer Battery 1.5 hour battery life on a single charge
Power and charge using external Mini USB
Operating
Temperature
10 – 30 degrees C, Ambient
Availability 1st Half 2008 to qualified global OEM’s and leading mobile operators
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Appendix CI-Tech Inc.’s Laser Virtual Keyboard Specifications
Keyboard Projection Light source: Red diode laser Keyboard layout: 63 key / full sized QWERTY layout Keyboard size: 295 x 95mm projected keyboard size Keyboard position: 60mm from VKB unit Required Projection surface: Non-reflective, opaque flat surface Visibility: Good contrast up to 600 lux ambient illumination
Keystroke Sensor Ambient illumination: Works under all standard indoor illuminations up to 600 lux Detection: rate Up to 400 characters per minute Detection algorithm: Multiple keystroke support Effective keystroke: Approximately 2mm Operating surface: Any firm flat surface with no protrusions greater than 1mm
Bluetooth Bluetooth Spec: Bluetooth v1.1 class 2 Bluetooth Profile Supported: HID and SPP Range of Frequency: 2.4GHz Spectrum Transmission range: 9m Number of supported passkeys: 5
Electrical Power source: Integrated, 3.6V rechargeable lithium-ion battery Battery capacity > 120 minutes continuous typing Charge Method: Included 100-240V AC Wall Adapter
Dimensions Approximately 35 x 92 x 25mm (1.38" x 3.6" x 1")
Compatibility Support for PalmOS 5, PocketPC 2003, Windows Smartphone, Symbian OS, and Windows 2000/XP (Mac OSX will work but drivers are not provided. See the bottom of this page for details.) Look below for a list of specific compatible devices. Please note your device may still work properly if not on this list as long as it supports one of the OS listed above.
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Appendix DElectronic Manufacturer Services Shortlist
POTENTIAL EMS COMPANIESINDIC EMS ELECTRONICS PVT. LTD.CelesticaFlextronicsFoxconnElcoteqGPC ElectronicsIntegrated Microelectronics, Inc.Jabil CircuitPlexusQuanta ComputersSanmina-SCISMTC CorporationSolectronSwisstronicsPantronix CorporationQuality Assembly (Thailand),LTD.
Appendix EMarket Size and Market Estimates
Worldwide: Preliminary PDA Vendor Shipment Estimates, 1Q06 (Units)
Company 1Q06 Shipments
1Q06 Market Share (%)
1Q05 Shipments
1Q05 Market Share (%)
1Q05- 1Q06 Growth (%)
Research In Motion
929,883 25.5 711,000 20.7 30.8
Palm 459,970 12.6 614,750 17.9 -25.2
Hewlett-Packard 421,336 11.5 601,352 17.5 -29.9
Mio Technology 216,728 5.9 119,622 3.5 81.2
Dell 143,200 3.9 217,000 6.3 -34.0
Others 1,482,433 40.6 1,164,564 34.0 27.3
Total 3,653,550 100.0 3,428,288 100.0 6.6
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Smartphone Market
Notebook and Portable PC Market Share
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TOP 5 COMMERCIAL VENDOR PORTABLE PC MARKET SHARE
TOP 5 CONSUMER VENDORPORTABLE PC MARKET SHARE
Vendor Share: IBM 17.8% Dell 15.3% Acer 15.2% Toshiba 15.0% HP 13.1% Others 23.6%Total 100.0%
Vendor Share:HP 30.6%Toshiba 19.7%Dell 11.7%Acer 10.8%LG 7.3%Others 19.9%Total 100.0%
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Notebook PC Shipments, Share and Growth by Supplier
Brand
Q3'06
Q4'06
Change
Q4'06
HP
3.6M
4.7M
29%
20.0%
Dell
3.6M
3.5M
-2%
15.0%
Acer
2.4M
3.1M
29%
13.3%
Toshiba
2.2M
Nanoboxx™ - Convergence comes of age
Appendix FCosts/Benefits
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Notebook PC Shipments, Share and Growth by Supplier
Brand
Q3'06
Q4'06
Change
Q4'06
HP
3.6M
4.7M
29%
20.0%
Dell
3.6M
3.5M
-2%
15.0%
Acer
2.4M
3.1M
29%
13.3%
Toshiba
2.2M
Nanoboxx™ - Convergence comes of age
2009 2010 2011 2011Anticipated Retailer Sales (In units) 1,000 2,000 1,000 1,000Anticipated Wholesaler Sales (In units) 0 5,000 20,000 100,000Retailer Selling price $800.00 $750.00 $700.00 $550.00Wholeseller price $0.00 $350.00 $350.00 $300.00
Processor $30.00 $25.00 $20.00 $20.00Motherboard $30.00 $25.00 $20.00 $20.00Display $50.00 $40.00 $30.00 $30.00Input $30.00 $25.00 $25.00 $25.00Storage $30.00 $30.00 $25.00 $25.00Memory $30.00 $25.00 $25.00 $25.00Box $2.00 $2.00 $2.00 $2.00Battery $10.00 $10.00 $10.00 $10.00Power cord $0.50 $0.50 $0.50 $0.50Package $0.50 $0.50 $0.50 $0.50Other $50.00 $30.00 $30.00 $0.00
Total Material Costs per Unit $263.00 $213.00 $188.00 $158.00
Revenue $800,000.00 $3,250,000.00 $7,700,000.00 $30,550,000.00
Total Material Costs $263,000.00 $1,491,000.00 $3,948,000.00 $15,958,000.00Box Manufacturing Costs $20.00 $20.00 $20.00 $20.00Assembly Costs $20.00 $20.00 $18.00 $18.00Transporation & Insurance $20.00 $20.00 $12.00 $12.00
Overall Variable overhead $60,000.00 $420,000.00 $1,050,000.00 $5,050,000.00
Distribution Costs $50,000.00 $100,000.00 $50,000.00 $50,000.00
Cost of Goods Sold $373,000.00 $2,011,000.00 $5,048,000.00 $21,058,000.00
Research & Development $100,000.00 $250,000.00 $1,000,000.00 $1,000,000.00Sales and marketing $200,000.00 $400,000.00 $1,000,000.00 $1,800,000.00General Administration $500,000.00 $600,000.00 $1,000,000.00 $1,200,000.00
Expense $800,000.00 $1,250,000.00 $3,000,000.00 $4,000,000.00
Profit -$373,000.00 -$11,000.00 -$348,000.00 $5,492,000.00
Appendix GAgartha Inc.’s rendition of the Nanoboxx™
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Notebook PC Shipments, Share and Growth by Supplier
Brand
Q3'06
Q4'06
Change
Q4'06
HP
3.6M
4.7M
29%
20.0%
Dell
3.6M
3.5M
-2%
15.0%
Acer
2.4M
3.1M
29%
13.3%
Toshiba
2.2M
Nanoboxx™ - Convergence comes of age
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