MKTG 762: OPPORTUNITY
ANALYSIS FINAL REPORT
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ESTIMATED SPECTRUM ADAPTIVE
POSTFILTER ALGORITHM
PREPARED FOR:
UNIVERSITY OF BALTIMORE MERRICK SCHOOL OF BUSINESS
&
NASA GODDARD SPACE CENTER
PROFESSOR: DR. MICHAEL LARIC
INVENTOR: DR. IRVING LINARES
Lauren Chaney, Cathy Coreill, Phineas Deford, Nicholette Letersky
EXECUTIVE SUMMARY

ESAP: RETAINS PHOTO (JPEG) & VIDEO (MPEG) IMAGE QUALITY
DURING COMPRESSION

COMMERCIALIZATION POTENTIAL?....YES!!!

REQUIRED INITIAL INVESTMENT: $2M

TARGET ROI: 20%

AVG IRR YEARS 3-7: 70%

5-YEAR NPV: $7M
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WHAT IS ESAP?


INITIALLY DESIGNED BY NASA TO CLARIFY LOW
BIT IMAGES OF FAR AWAY OBJECTS & OTHER
ENVIRONMENTALLY CHALLENGING APPLICATIONS
ESAP IS AN ALGORITHM USED TO CLARIFY PHOTO
(JPEG) AND VIDEO (MPEG) IMAGES THAT HAVE
BEEN HIGHLY COMPRESSED IN ORDER TO
CONSERVE MEMORY SPACE
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TAKING THIS…..
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AND TURNING IT INTO THIS…..
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ESTIMATED SPECTRUM ADAPTIVE POSTFILTER

INVENTOR: DR. IRVING LINARES, NASA

OWNERSHIP: U.S. GOVERNMENT
PATENT# 6,760,487 B1 JULY 6, 2004


ADEQUACY OF IP PROTECTION & THE NEED FOR
ADDITIONAL PATENTS AND/OR COPYRIGHTS
UB, NASA & TECHNOLOGY INCUBATION
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TRIADS (a.k.a. ideas for how the technology can be commercialized)

TOP 3 TRIADS
 SURVEILLANCE
CAMERAS
 MAMMOGRAPHY
 SMART PHONES

SWOT ANALYSIS

RESULTS
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AND THE WINNER IS…..SMART PHONES!!!
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SMART PHONE S.W.O.T.
Strengths:
•Immensely popular and growing fast
•Gaining popularity as primary source
for web access
•Gaining popularity as substitute for
cameras
•Covers a wide range of demographics
•Global market
Weaknesses:
•Loss of image quality when uploaded
from phone to web (email, Facebook,
You Tube)
•Operating speed of ESAP as firmware
•Camera quality not necessarily a driver
of smart phone sales
•Difficult to determine cost of
implementation
Opportunities:
•Enhance quality of pictures and videos
uploaded to the web from a smart phone
•Poor quality camera in most phones;
strong desire for improved camera
•Firmware
•App
•Competitive advantage
•Tablets
Threats:
•Fast-cycle market
•Diminished product life cycle
•Competitor algorithms exist on a
commercial basis
•App market
•Multiple manufacturers & operating
systems
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•Low barriers to entry
INTENT

PARTNERSHIP WITH A LEADING MANUFACTURER
OF SMART PHONES

5 YEAR EXCLUSIVE LICENSING AGREEMENT

COMPETITIVE ADVANTAGE

ASIC
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FEASIBILITY

SUPERIORITY: COMPETITIVE ADVANTAGE

SECURITY: IS CURRENT PATENT GOOD ENOUGH?

SUBSTANTIATION: QUESTIONNAIRE
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O.A.T.S.

OVERALL MARKET: 5.3B MOBILE PHONE SUBSCRIPTIONS IN 2010,
EQUIVALENT TO 76% OF WORLD’S POPULATION

ADDRESSABLE MARKET:
APPROXIMATELY 18%, or 940M SUBSCRIBERS
USE MOBILE BROADBAND. IN 2010, 22% OF ALL MOBILE PHONE SALES
WERE SMART PHONES; A 74% INCREASE OVER 2009
T
 ARGET MARKET: PERCENTAGE OF SMART PHONE USERS AGE 13+
WHO USE THEIR PHONE TO TAKE PICTURES IN 2010:
U.S. – 52.4%
EUROPE – 57.5%
JAPAN – 63.9%

SHARE OF MARKET:
APPLE INC.
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APPLE INC.

IN 2010, IPHONE RANKED 3RD AMONG GLOBAL
SALES OF SMART PHONES - 47.5 million units

2010 MARKET SHARE - 15.7%

2009-2010 SALES GROWTH - 89.2%

RECENTLY PARTNERED WITH VERIZON IN U.S.
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TARGET MARKET

CURRENT IPHONE USERS:
 57%
MALE, 43% FEMALE
 91%
WOULD RECOMMEND
 50%
PURCHASE AT LEAST 1 APP/MONTH
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TARGET MARKET
CURRENT AND POTENTIAL IPHONE USERS:
 17 YEARS OR YOUNGER:
13%
 18-24:
12%
 25-34:
21%
 35-44:
21%
 45-54:
18%
 55+:
14%
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QUESTIONNAIRE RESULTS

51 PEOPLE SURVEYED

100% OWNED A CAMERA PHONE


86% HAVE USED THEIR PHONE TO UPLOAD
IMAGES TO THE WEB
80% WOULD BE INCLINED TO PURCHASE A
PHONE THEY KNEW HAD A SUPERIOR CAMERA
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CAPITAL REQUIREMENTS & FINANCIALS

INITIAL INVESTMENT: $2M

SALE PRICE: $0.10/CHIP

VARIABLE COSTS: $0.03/CHIP

FIXED COSTS: $1.25M

TARGET ROI: 20%

AVG IRR YEARS 3-7: 70%

5-YEAR NPV: $7M
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ASSUMPTIONS

COSTS OF MANUFACTURING ASIC CHIP

CAPITALIZE ON APPLE’S PROMOTION


GROWTH PROJECTIONS NOT IN LINE WITH
GROWTH TREND FOR IPHONE
FIGURES DO NOT TAKE INTO CONSIDERATION ESAP’s
PRODUCT LIFE CYCLE AFTER EXPIRATION OF 5-YEAR
EXCLUSIVE LICENSING AGREEMENT
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CONTINGENCY PLAN

OTHER MANUFACTURERS

OTHER OPERATING SYSTEMS

APP MARKET
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QUESTIONS??
THANK YOU!!!
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