Gazette
The Official Publication of the MPX Federation for Quarter 1
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Industry Monitor
Wafer Material Prices up by  Cu.1
Labor Costs down by  Cu.1
Corporate Income Tax 30 %
Current Price Bands. Prices outside this band
will receive no sales.
Limits PALM MILLI STICK BONE
Upper 550 500 350 500
Lower 400 350 250 300
Paul Sakman, Global Partner, Pantalun Consulting.
Sakman is an acknowledged authority in the digital
home electronics industry. He is the adviser to
several Venture Capital firms in the Bay area.
Paul Sakmans’ is willing to buy equity shares of your
company. He has put some conditions for subscribing
to your equity issue:
1. He will buy at 1-10% discount to the market
price estimated considering your Quarter 1
performance. In case you offer him shares later
say in Quarter 3, the price will factor in Quarter
3 performance.
2. He will not buy shares in case their tendering
price is lower than the face value (Cu.1),
irrespective of your offer price.
3. You can exercise this option only in the first
three quarters.
4. If subscribed, the Issue proceeds would be
released to you at the beginning of the quarter of
issue. An Issue once made cannot be cancelled
or reversed. The share price expected by you
along with the number of shares, represents your
money requirement. Paul Sakman would
consider the riskiness of your business, past and
future performance, and equity size to evaluate
the attractiveness of your Issue and in
determining a tender price. The additional
volume of shares issued may depress your EPS
as well as Book Value per share, if the additional
funds of the Issue do not translate into sufficient
earnings for the company. Therefore timing
would be as important as the price and the
number of shares you expect to issue. Equity
issue risky because your issue may not go
through if your share price dips below face
value.
5. He is not willing to take up more than 25% of the
present equity capital (in number of shares) over
the three quarter period.
X.100
6. If you wish to go for an Issue, indicate the number
of Equity Shares in ADF. This entry must be made
in the quarter in which you want to raise equity.
Launch of BONE
Currently no manufacturer is producing BONEs.
However there seems to be considerable interest in
entering that market. The price levels indicated in the
table above are fairly realistic expectations of the
electronics industry. However, to enter this market, firms
need to buttress their technical support divisions which
involve an additional production overheads of Cu.
200,000 per quarter and an increase of Cu 3 per unit in
the cost of overall manpower for first three products and
twice for Bone. This additional cost is mandatory and all
firms opting to enter this market will be forced to set up
these facilities in whichever quarter they launch Bones.
Export Demand for PALM, MILI & STICK
Export demand is expected in above product categories
from Q2 and the size of demand could be between 5000
units to 15000 units per team per quarter. This demand
will be in addition to the domestic demand. You may
like to do resource planning to meet the export demand.
Brand Building in the MPX Industry
MPXs are lifestyle products and depend to a large extent
on branding and positioning in the eyes of the customers.
With a view to enable the MPX industry take decisions
on brand promotion, the Advertising Council of
Chanakya has the following “rack” rates that are
indicative of the expenses. The more difficult question to
answer is the effectiveness of these initiatives and that is
a different question that even advertising pundit find
difficult to answer. These costs are over and above the
Fixed Advertisements and branding costs (Cu.200,000)
mentioned in the Starting Conditions. The costs will be
equally divided over the four products in Quarter 1
irrespective of quarter of launch/production etc.
Brand Promotion Initiative: You can opt for MM
or BA or Both or None. One Time Cost - One
Time Offer. ONLY AVAILABLE IN QTR 1. Cost
Allocated equally over 4 products.
Mass Media Cu. 100,000
Advertisements (MM)
Appointment of Brand Fixed Celebrity Fees
ambassador (BA) Cu. 200,000