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Segment Zero

Segment Zero. Rev: Sep, 2012 Euiho (David) Suh , Ph.D. POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management Engineering POSTECH. Contents. Segment Zero (1/2). Segment Zero

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Segment Zero

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  1. Segment Zero Rev: Sep, 2012 Euiho (David) Suh, Ph.D. POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management EngineeringPOSTECH
  2. Contents
  3. Segment Zero (1/2) Segment Zero Definition: Low-end market requiring low-end technology Stated by Andrew Grovein an Winter 1999 Leader to LeaderJournal Technology Improvement & Customer Requirements Customers expect to have products with better performance Over time, technologies improve faster than the expectations of the mass market
  4. Segment Zero (2/2) The Way It Was The Way It Is Small population,High margins Narrower & More profitable Huge population,Low margins PC costingless than $1,000 “Segment Zero” Segment Zero has been neglected Low-end versions of the technology can earn margins Someone requiring a low performance, limited features and application was never included Intel’s market Rebuilding the Segment Pyramids (Intel)
  5. Pareto Principle and Long Tail Pareto Principle Suggested by a business-management consultant Joseph Juran Named after an Italian economist VilfredoPareto He observed in 1906 that 80% of the land in Italy wasowned by 20% of the population He developed the principle by observing that20% of the pea pods in his garden contained 80% of the peas 80-20 rule, Law of the vital few, Principle of factor sparsity For many events, roughly 80% of the effectscome from 20% of causes Long Tail Large number of occurrences far from the "head“or central part of a distribution of popularities Popularized by Chris Andersonin an October 2004 Wired magazine article 20% of a population which draws long tailin the graph expression of the Pareto Principle Intention to ignore the long tail Economic meaning the long tail has
  6. Real Application in Market – Segment Zero High-End CPU: 1.5GHz Dual CoreNetwork: LTE / HSPA+ Display: 4.5’ SuperAmoled+ Camera: 8 million pixel Ram: 1GB Etc.: Full HD 1080p Low-End CPU: 823Mhz ~ 1.4GHz Single CoreNetwork: HSPA+ Display: 2.66’~3.7’ TFT LCD Camera: 2~5 million pixel Ram: 512MB~1GB Etc.: Qwerty keypad S2 LTE W M Pro Y Galaxy Families (2011)
  7. Real Application in Market – Long Tail IT Development Amazon.com’sTarget Existing offline bookstore’sTarget Amazon.com Offline bookstore: Limitation of display space Only focusing on the 20% of best sellers Amazon.com: No limitation of space Offering all kinds of books Welcomed by the customers in the “Long Tail”
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