GSL Slide Master

Tanawat
GROUP SENSE (INTERNATIONAL) LIMITED

權智 ( 國際 ) 有限公司 Manita
Pauline
Orrawan
權智 ( 國際 ) 有限公司
GROUP SENSE (INTERNATIONAL)
LIMITED
Company Background
Core Businesses:
2. E-Dictionary
3. Original Design Manufacturing
(ODM)
Moving to  3. Smartphone Market

built on Palm OS
Instant-Dict
Xplore G88 brand
Xplore G18
Situation Analysis
Revenue Breakdown
15%
51%
34%
Smartphone
ODM Electronic Products
Electronic Handheld Products (e-dictionary)
Situation Analysis
Smartphones  Two Categories

1.) First-tier: Market Leaders
2.) Second-tier: Others
Xplore is in this category!
Nokia RIM Samsung Sony Ericsson Motorola Others

56.90% 5.10% 3.00% 8.50% 8.10% 18.40%
Issues and Objectives
Where GSL is ISSUES TO BE SOLVED Where GSL should

be in 5 Years
•Established initial
presence in Asia and The Operating System (OS)
Europe Standard Decision “To become the
leader of the 2nd-
•Showing high growth tier Smartphone
and increasing Lack of Geographic Focus market in the
competition for Brand Development Asian Pacific
Region.”
•New opportunity
emerging in 3G
Paving the way for 3G
• Point of Decision:
Continue own brand
amidst uncertainty?
Group Sense, Good Sense

Strategy
Strategy Overview
Operating Systems Good Sense

1. Palm OS Strategy
2. Symbian
OS Selection
3. Microsoft WMS
4. Linux Constraints Microsoft
WMS
Geographic Markets Financial Resources

1. Europe Geographic Market
2. North America
Time Limitation Asia-Pacific
Region
3. China
4. Asia-Pacific (excl.
3G Anticipation
China)
3G Anticipation Enter
1. Enter
2. Not Enter
I. OS Selection
Linux
Good Sense Compatibility:
Strategy •Suitability for Smart Phones   
OS Selection
•Advanced User Interface  
•Multi-Tasking Functions   
Microsoft WMS •Flexibility
   
Geographic
•Compatibility for 3G
  
Market
Asia-Pacific Long-Term Potential
Region •Support of OS Developers
 
•Applications Availability
 
3G Anticipation
•Strategic Alliance
 
Enter
Vs.
I. OS Selection
Good Sense
Strategy Rationale for Selecting
OS Selection
Microsoft Mobile
Windows
•Suitable for “PDAphone” – Emphasis on
Functions
Geographic
Market
•Point of Differentiation from Smart Phone
Asia-Pacific Brands
Region
•Added Value: Compatibility with users’ PCs
3G Anticipation
•More Operators Joining Alliance
Enter •Entry of PC and PDA

The vendors
Safer into Smart Phone
Option
Market
II. Selecting Geographic
權智 ( 國際 ) 有限公司 Region
Marketing the Brand
Good Sense
Strategy Become the leader in the 2nd-tier smartphone
Objective market in 5 years
OS Selection
Microsoft WMS
Others (18.4%) = 2nd-tier Smart Phone Market
2nd-tier Smartphone Market
•Handspring Treo XPLORE
Geographic
Market “Good Value for Money”
Asia-Pacific •Palm One
Region Leverage Core Competencies
•Fujitsu -Product Design
-Innovative
Price Features at Competitive
•Pantech
3G Anticipation Target
•Lenovo
-Students to young working adults
Enter •Xplore -Function-oriented
Conscious) (not Brand
Nokia
RIM
Samsung
Sony Ericsson
Motorola
Others
II. Selecting Geographic
權智 ( 國際 ) 有限公司 Region
Total Asia Market =1,539 Users

Good Sense
Strategy Asia Market (excl. China, Japan, Korea) = 709
Users
OS Selection
Smartphone Market= 354 Users
Microsoft WMS
2nd-Tier Smartphone = 65 Users
Geographic
Market
GSL’s XPLORE = 1.69 Users
Asia-Pacific
Region
Market
3G Anticipation Share =
0.47%
Enter
HK, Taiwan, Malaysia,
Singapore, Indonesia,
Philippines and
Thailand
Market Potential in Asia Pacific Region by 2009 (in Millions
3G Anticipation
Good Sense 3G Market Potential in Asia Pacific Region by 2010

Strategy
OS Selection 23.82%  Significant Portion of Handset
Market
Microsoft WMS Benefits of Entering 3G
•Brand Perception as “Innovative”
Geographic
Market •To Capitalize Opportunity, Must Prepare NOW
Asia-Pacific
Region
23.82%
3G Anticipation
46.55%
Enter
2G
2.5G
3G
29.63%
Source: Reuters
3G Anticipation
Objective Prepare and enter 3G market by the end of

Good Sense 2005
Strategy 3G Strategy
OS Selection
Research and Development
Microsoft WMS •Increase R&D annually
•Launch 1st 3G phone in 2006
Geographic •Focus on “Entertainment Function Development”
Market
-align with Asian Market Needs
Asia-Pacific
Region
Market Penetration Plan
•Enter market when 3G market in growth phase
3G Anticipation
Enter 2004 2005 2006 2007 2008 2009

HK, Taiwan Singapore, Indonesia,
Malaysia Thailand
•Collaborate with Network Operators

Key Success Factors
Sustainable
Developme
nt
Customer
Confidenc
e
Government
Collaboration
Issues Are Solved
Presentation Slides
Overview Sustainable Development Strategy

Company Background Foreign Visitors by Nation
Situation Analysis Provinces Selection
Issue Identification
Timeline and Financial Forecast
Recommendation Timeline
Strategy Overview Cost Breakdown
Source of Fund
Financial Forecasts
Competitive Advantage Determination
Analysis NPV
Competitors’ Analysis
Kingdom of Wonders Conclusion
Key Success Factors
Southern Rejuvenation Issues are Solved
Tsunami Effects
Strategy Overview SWOT Analysis
Implementation Stage Strengths
Communication Plan Weaknesses
Opportunities
Threats
Slide Navigators I
OS Standard
Why Focus on Security Issues
Hotel Classification
Sustainable Development Strategy
Budget Allocation among 6 provinces (FN)
Budget Allocation among 6 provinces (FN)
Tourist Arrivals by Countries
Growth rate for Tourist arrivals (FN)
Personnel and Community Training
Specific Sites to Diversify
How can standardization increase prestige
Rationale for Area of Diversification (FN)
Screening Target Market
Diversification Trend in terms of Receipts
Total Tourism Receipts by province
Target for Diversification Strategy
Alternatively Countering Over-utilization
Back-up Slides
3G Penetration
• Release new 3G phone models within

each region one year after 3G has
taken off
Year When Users Network Operator
to (2004)
Hong 2005 Enter
2006 8,384,880 CSL, 3, Smartone
Kong
Taiwan 2005 2006 20,515,000 Chunghwa Telecom, Far
Eastone
Malaysia 2005 2007 16,551,000 Maxis Berhad, Celcom, Digi
Singapore 2005 2007 4,078,400 Singtel, StarHub, MobileOne
Thailand 2006-07 2008 28,000,000 AIS, DTAC, Orange
Indonesia 2006-07 2008 30,000,000 Telkomsel, Indosat, XL
** Choose to go (HK + Taiwan) & (Malaysia + SG) for
proximity reasons
Source: www.telecomasia.net
Competitive Analysis
Strengths
•Established e-dictionary market in HK – Currently Leader

•G18 – first GSL smart phone won awards for stylish design
•Has presence in overseas markets: China, Taiwan, Korea, Thailand,
Singapore, N. America, and the Middle East
•Stringent quality and cost control for ODM
•High level of competence in system integration and developing power
management schemes
•Experienced in developing user-friendly GUIs
•Good relationships with components suppliers
•Good relationships with operators in Hong Kong
•Able to produce in small batch orders
•Competitive Pricing
•Has manufacturing base in China allowing low cost production
•Sole producer of Smart Phones in HK
Weaknesses
•Repeated losses in pager operations (sold off ’02)

•New and small player in the market
•Limited R&D budget compared to competitors
•Has only alliance with Palm Source OS
•Brand name not well established worldwide
•Considered only a 2nd-Tier brand in smart phone market
Opportunities
•International Market for Smart Phones

•3G markets emerging
•Listing on Various Stock Markets: NASDAQ, Singapore Exchange,
Shenzhen’s 2nd board
•Opening of China, increased need for language learning (e-dictionary)
•Japanese manufacturer outsourcing product development and
production to cut cost
•Development of Blue Tooth electronic system to increase sales by
20%
•Fast growing smart phone markets (CAGR up till 2007 @ 86%)
•Alliance with network operators as ODM
•Capturing European Market
•Integrating e-dictionary function into smart phones
•CEPA may open up doors for future investments
Threats
•“OS standard War”

•Smart Phone market quickly dominated by big players (Nokia, Sony
Ericsson, Samsung)
•Sony (major PDA player) not going to launch PDA weakening Palm OS
importance in market
•Increasing competition from PC manufacturers
•Network operators seeking to decrease reliance on handset brands
•Requirement of JV with local companies to enter chinese market
•Korean and Taiwanese brands (2nd tier market brands)
•Short product life cycle (5-6 months)
•Unclear at this stage if ODM margin < branded products [heavy cost
for maintaining brand image and distribution]
•Telecommunication industry heavily protected in China
Strategic Alliance between
Manufacturers and OS Standards
Symbian Microsoft Palm Others

WMS Source
Fujitsu 
GSL 
Kyocera 
Legend
 
Motorola
  
Nokia

PalmOne 
Samsung
   
Sendo 
Siemens 
Sony
Ericsson

Source: Case Material

Growth of Smart Phones
Market Share of the 3 Handset Types (2003-

2008)
80%
Growth Peaks at 2006
Vanilla to Feature < Feature Phone to Smart
70% Phone
60%
50%
40 Vanilla
40%
% Feature Phone
31 SmartPhone
30%
%
22
20% %
13
10% 6% %
2%
0%
2003 2004 2005 2006 2007 2008
Source: ARC chart estimates

Market Share
Smart Phone Manufacturer Market Shares,

2003
Nokia RIM Samsung Sony Ericsson Motorola Others
56.90% 5.10% 3.00% 8.50% 8.10% 18.40%
Nokia
RIM
Samsung
Sony Ericsson
Motorola
Others

Deriving Market Potential
GSL Turnover Forecast
1000
900
800
700
Electronic Handheld Products
HK $ (‘m)
600
ODM Electronic Products
500
Pager and Other Products
400
SmartPhone
300
200
100
0
t)
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)
st
st
al
al
al
al
al
al
as
as
ca
ca
tu
tu
tu
tu
tu
tu
ec
ec
re
re
c
r
(a
(a
(a
(a
(a
(a
(fo
(fo
(fo
(fo
98
99
00
01
02
03
04
05
06
07
19
19
20
20
20
20
20
20
20
20
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
1,114 1,123 1,407 1,613 978 1,147 1,602 1,962 2,294 2,418
Source: Case Material

Turnover Analysis
Analysis of Turnover by Geographical Region
0.20%
2.30%
3.60%
Other Asian Markets (including
Japan)
10.10% The People's Republic of China
(besides HK)
12.90% HK
N. America
Europe
70.90%
Middle East

Only one OS?
• GSL cannot allocate too many R & D

resource
– Expect to launch at most two models per
year
– Limited financial resource
Transition Plan
• From Palm to Microsoft WMS

platform
– New models launch prior to 2006 will still be
using Palm OS
– Sign agreement with Microsoft by 2006
– Anticipate the rise of 3G at the end of 2005 
develop models on Microsoft WMS platform to
support 2.5G to 3G
Microsoft WMS
Drawbacks:
2. Lack of flexibility due to the strict
parameter
3. Resistance from handset OEM
Not to concern because:

2. Few models to be launched per year
3. Point of differentiation on application
and hardware, not OS
Creating Brand Awareness
‘Xplore’ with 3G
Marketing tactics to implement :
3. Advertisement (magazine, media)
4. Distribute through network operators
5. Product Placement (Movies)
Why not focus on Europe
European Market
-Nature of Market – Sold Through Network Operators
 takes effort to push through the network
-Previous models released G88 did not achieve good sales
-Currently, penetrating through “Original Design Manufacturing” - ODM for
Nokia
-Lack Market Knowledge
-Proximity and Control Considerations
Why not focus on China
Chinese Market
-High Barriers to Entry
-Telecommunications heavily protected industry
-CEPA agreement emphasizes on the service industry – wait till it extends to
manufacturing
-Most phones users use Vanilla phones
-Intensified Competition anticipated from Local Players
ODM Plans
-Continue ODM strategic business Unit

-GSL seeking for another 2 non-Japanese companies for ODM
-aim to preserve customer relationship (i.e. Nokia)
Chinese Market
-Continue ODM business model
-Currently no right to market in China
-achieve 0.3%-0.5% market share in Mainland Mobile Phone market
ODM Plans

Chinese Market
Human Resource Plan

Chinese Market
E-Dictionary Plans

Chinese Market
Why collaborate with Network Operators in
3G
Positioning and Competing in
the 2nd Tier Market

GSL Slide Master

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Tanawat

GROUP SENSE (INTERNATIONAL) LIMITED

Moving to  3. Smartphone Market

Smartphones  Two Categories

Nokia RIM Samsung Sony Ericsson Motorola Others

Where GSL is ISSUES TO BE SOLVED Where GSL should

Group Sense, Good Sense

Operating Systems Good Sense

Geographic Markets Financial Resources

Enter •Entry of PC and PDA

Total Asia Market =1,539 Users

Good Sense 3G Market Potential in Asia Pacific Region by 2010

Objective Prepare and enter 3G market by the end of

Enter 2004 2005 2006 2007 2008 2009

•Collaborate with Network Operators

Overview Sustainable Development Strategy

• Release new 3G phone models within

•Established e-dictionary market in HK – Currently Leader

•Repeated losses in pager operations (sold off ’02)

•International Market for Smart Phones

•“OS standard War”

Symbian Microsoft Palm Others

Source: Case Material

Market Share of the 3 Handset Types (2003-

Source: ARC chart estimates

Smart Phone Manufacturer Market Shares,

Source: ARC chart estimates

Source: Case Material

Analysis of Turnover by Geographical Region

Source: ARC chart estimates

• GSL cannot allocate too many R & D

• From Palm to Microsoft WMS

Not to concern because:

-Continue ODM strategic business Unit

-Continue ODM strategic business Unit

-Continue ODM strategic business Unit

-Continue ODM strategic business Unit

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