- The 3D auto stereoscopic tablet operates on an android platform which is provided by Google. The tablet offers very high resolutions and can switch from stereoscopic mode and convert 2D into 3D. The competitors that are going to market the auto stereoscopic 3D tablet are the device manufacturers which use the android platform on their devices. These are companies like Google, Samsung and Huawei who have over the past few years used the free android platform to market their devices. The marketing will start as soon as these companies start producing the devices. The 3D auto stereoscopic tablet will serve the whole market segment rather than a specific market segment because these devices will have features that can be useful to all sections of the consumers depending on their needs. The investment in the 3D auto stereoscopic tablet will be through an in licence since this is the model that is used by many device manufacturers. An in licence provides the manufacturers with the intellectual property of another entity without necessarily high costs to fund the acquisition.
- According to the residual dividend theory, dividends to equity holders are paid only after the firm has financed all its capital expenditure projects which have a positive net present value. This policy does not always benefit those investors who expect dividends payment from a firm. As thus, investors may be more biased towards other methods of dividend payment. In this regard, the competitors may not actually invest in the development of the tablet since it would likely be met with resistance from investors who may view the project as eating into the earnings of the company. This is most likely to affect those tablet manufacturers which are publicly owned such as Samsung.
- The amount of money that competitors will be willing to risk will be at least an amount which will yield positive net positive value on the investment. This means that the investment will be measured against the expected monetary cash flows that will derive from undertaking the project. The amount that a corporation is willing to risk will impact the range of the NPV outcomes. NPV is the difference between the present value of the expected monetary inflows from the project and the present value of the money invested by the company in the project. As such, the amount that a company will be willing to risk in investing in the manufacture of the tablet will have an influence on the range of net present value of the project.
- The income stream from the investment will vary from the start. Initially, the income stream will be negative since more money will be used in the establishment of the investment that will be higher than the cash flows that will be incoming from the investment. This will reduce in time until the investment breaks even and starts registering positive cash flows. The income stream will continue to grow until they level off at the peak of the sales of the tablets. From then, the cash flows may reduce if the technology employed in the devices becomes obsolete and newer technologies will be employed. The level of confidence in the NPV will be low because technology is a dynamic industry where the projections of the future income streams from the investment cannot be projected with certainty.
References
Cunningham A. (2002). "Behavioral Finance and Investor Governance". Washington & Lee Law Review 59: 767.
Kirkpatrick, D. & Dahlquist, R. (2007). Technical Analysis: The Complete Resource for Financial Market Technicians. Upper Saddle River, NJ: Financial Times Press.
