Develop a forecast for E-book demand for the first ten years (from the time e-books first became available). State all assumptions clearly. Tabulate all the results nicely.
Read the case Forecasting the Adoption of E-Books (Course Pack) and answer the following questions. I suggest you also read the article titled, Forecasting the Adoption of a New Product.
to calculate the S(t). all we need is p,q and m. we can get the m from the case and p and q is where we estimate and use the new product case study examples as a reference. And finally use excel to formulate the graph by using the formula and the values we have.
Exhibit A Key Statistics in Considering Values for the Total Population of Adopters for E-books 293.7 million 46.7% 111.3 million 74.1 million 67.8% 1. Total US Population (7/1/2004 estimate) 2. Percent of US Population Reading Literature 3. Number of US households 4. US household PC penetration (2002) 5. US internet penetration 6. Percentage of internet users likely to buy music online 7. Percentage of traditional paper books purchased online in 2003 8. US household penetration of cell phones 9. US household penetration of MP3 players 10. Cumulative number downloads from iTunes music service (4/03 - 4/05) 11. Amazon.com worldwide customer base 12. Average number of books purchased per year per consumer 8% 66% 350 million 47 million Exhibit B Market Research of Consumer Behavior Regarding Electronic Publications Read recreational material on a PDA 12% Read recreational material on a dedicated e-book device 28% Sample a business-related publication on a computer 44% Read a reference book on a computer/laptop 66% 0% 10% 20% 30% 40% 50% 60% 70% Exhibit C Bass Model Parameter Estimates for Several Products/Technologies P 0.055 Product (Period of Analysis) in in millions) CD player (1986-1996) 29,6 Cable television service (1981-1994) 68.0 Home Personal Computer (1982-1988) 25.8 Cellular telephone (1986-1996) 45.1 Handheld Organizer (1997-2004) 80.5 MP3 player (1999-2004) 388 * Global estimates, all other estimates were based on US sales, 0.100 0.121 0.009 0.043 0.378 0.060 0.281 0.421 0,565 0.009 0.783 Questions/Points to consider As you develop your forecast for the adoption of e-books, the following points and issues are worth considering.? 1. Assume that you are making a prediction from the time e-books first became available (year 2000). Although early unit sales data for e-books are available, construct your forecast irrespective of these sales, 2. What do you expect the long-run total adoption of e-books to be (i.e., the parameter m in the Bass model)? The total market size, m, should be the total number of potential consumers for e-books as opposed to the total number of e-book purchases/downloads. Do you expect the market for e-books to be guided more by imitators or innovators? Why? Once you have modeled the first-time adoption of e-books, create a 5-year annual forecast of the overall demand for e-books by making assumptions about the number of e-book purchases per consumer per year. 5. Will the adoption of e-books be similar or different than digital music obtained online? 6. Do you think that attitudes about reading/purchasing e-content have changed much in recent years? 7. What role will hardware devices play in the adoption of e-books? 8. Do you expect the size and pattern of diffusion to be different globally as compared to the United States? 3 4 Exhibit A Key Statistics in Considering Values for the Total Population of Adopters for E-books 293.7 million 46.7% 111.3 million 74.1 million 67.8% 1. Total US Population (7/1/2004 estimate) 2. Percent of US Population Reading Literature 3. Number of US households 4. US household PC penetration (2002) 5. US internet penetration 6. Percentage of internet users likely to buy music online 7. Percentage of traditional paper books purchased online in 2003 8. US household penetration of cell phones 9. US household penetration of MP3 players 10. Cumulative number downloads from iTunes music service (4/03 - 4/05) 11. Amazon.com worldwide customer base 12. Average number of books purchased per year per consumer 8% 66% 350 million 47 million Exhibit B Market Research of Consumer Behavior Regarding Electronic Publications Read recreational material on a PDA 12% Read recreational material on a dedicated e-book device 28% Sample a business-related publication on a computer 44% Read a reference book on a computer/laptop 66% 0% 10% 20% 30% 40% 50% 60% 70% Exhibit C Bass Model Parameter Estimates for Several Products/Technologies P 0.055 Product (Period of Analysis) in in millions) CD player (1986-1996) 29,6 Cable television service (1981-1994) 68.0 Home Personal Computer (1982-1988) 25.8 Cellular telephone (1986-1996) 45.1 Handheld Organizer (1997-2004) 80.5 MP3 player (1999-2004) 388 * Global estimates, all other estimates were based on US sales, 0.100 0.121 0.009 0.043 0.378 0.060 0.281 0.421 0,565 0.009 0.783 Questions/Points to consider As you develop your forecast for the adoption of e-books, the following points and issues are worth considering.? 1. Assume that you are making a prediction from the time e-books first became available (year 2000). Although early unit sales data for e-books are available, construct your forecast irrespective of these sales, 2. What do you expect the long-run total adoption of e-books to be (i.e., the parameter m in the Bass model)? The total market size, m, should be the total number of potential consumers for e-books as opposed to the total number of e-book purchases/downloads. Do you expect the market for e-books to be guided more by imitators or innovators? Why? Once you have modeled the first-time adoption of e-books, create a 5-year annual forecast of the overall demand for e-books by making assumptions about the number of e-book purchases per consumer per year. 5. Will the adoption of e-books be similar or different than digital music obtained online? 6. Do you think that attitudes about reading/purchasing e-content have changed much in recent years? 7. What role will hardware devices play in the adoption of e-books? 8. Do you expect the size and pattern of diffusion to be different globally as compared to the United States? 3 4
