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PRICING POLICY The pricing strategy for TouchTop's LEDCD is based on the reduction in
risk, and highly competitive ROI manufacturers will realize. The base price for licensing the technology is $25 Million Dollars. This fee entitles licensees to complete documentation, chemical formulas,
driver software, driver editor software, testing and tooling specifications and the like. Technical and manufacturing support services are contracted on an hourly basis at an average rate of $250 per hour, with
the average implementation expected to take 24,800 hours of technical and manufacturing guidance. Retooling existing AMLCD manufacturing facilities will cost another $15 Million. Finally, a royalty of 20
cents per square inch of screen manufactured is payable monthly by the licensee. A summary of how these costs compare to pursuing other alternatives follows in the table below.
Superior Payback Period and ROI Realized By Licensing Manufacturers
|
Item: |
TouchTop's LEDCD |
FED |
License |
$25,000,000 |
$7,000,000 |
Consulting |
$6,200,000 |
$5,000,000 |
Royalty (150K 12.1" Units/Mo.) |
$5,445,000 |
0 |
Plant |
$15,000,000* |
$800,000,000 |
Outlay |
$51,645,000 |
$812,000,000 |
Revenue Year 1 |
$145,000,000 |
$145,000,000** |
Cost Per Square Inch |
$2 |
$10 |
*Estimate based on detailed design takeoffs at NEEC AMLCD plant. **Assumes substantially superior LEDCDs, and FEDs, will sell at price 99' price targets for current AMLCDs, $80 per sq. inch.
As this scenario suggests, there is considerable room for TouchTop Technologies to increase its price. However, the company's marketing strategy is for quick
penetration to reduce the risk of entry by yet undiscovered technology alternatives. To encourage early decision making by prospects, the price of a license will
increase 50% per year for each agreement executed after the year 2000. Also, under the tentative NEEC agreement, no consulting fees would be charged but
TouchTop would be reimbursed for all "direct non-salary" consulting expenses. PROMOTION
Upon completion of tested, functioning prototypes, TouchTop Technologies will begin exhibiting 12.1", 27" and 50" flat screen displays based its LEDCD system at
symposiums in the United States, the Far East and Japan. These exhibitions will fall under the direction of Mr. Weinstein and the director of business development.
There is little doubt that the display community will be nothing short of shocked by what they see.The combined executive team of Touchtop Technologies has been published in
nearly every relevant trade and scientific journal in the display industry. In the course of publishing both critical and product specific articles, relationships with key
media contacts have developed. These relationships will be leveraged to gain third party endorsement of this breakthrough technology. In the end, however, the
quantum performance improvements delivered by Light Emitting Dry Crystal Displays will speak so loudly that relevant interested parties will have to listen. |