Compas Business plan

Leading to the motorcycle navigation revolution

Author: Version : Date :

Bob Baeyens (bbaeyens@gmail.com) +32 485/536.663 0.2 20/01/2005

Compas: the digital nerve centre of the 21st century motorcycle

Table of Contents
EXECUTIVE SUMMARY MISSION AND VISION VISION MISSION THE MANAGEMENT TEAM CUSTOMER PROFILE GPS NAVIGATION MARKET MOTORCYCLE MARKET SIZE AND EVOLUTION MARKET SEGMENTATION GEOGRAPHIC LOCATION THE PRODUCT AN INTEGRATED, MODULAR AND OPEN PLATFORM INTEGRATED MODULAR OPEN GPS NAVIGATION ELECTRONIC ROADBOOK MP3 PLAYER FM OR DAB RADIO AND TRAFFIC MANAGEMENT TRIP COMPUTER TRACK COMPUTER GEAR POSITION INDICATOR AND SHIFT LIGHTS INTERCOM GSM VOICE AND DATA INTEGRATION SPEED TRAP WARNING CLASSIC RADAR DETECTOR GPS BASED SPEED TRAP WARNING WIRELESS SPEED TRAP LOCATION TRANSMISSION THEFT PREVENTION AND RECOVERY INTERNET AND EMAIL REDEFINING THE WORD FLEXIBILITY CUSTOMIZED SCREEN LAYOUTS, LOGOS EXTEND INSTRUMENTATION USB WEB CAM FINGERPRINT SENSOR CUSTOM IMPLEMENTATIONS COMPETITIVE ANALYSIS INDIRECT COMPETITION (STANDALONE GPS NAVIGATION) DIRECT COMPETITION Compas Business plan 4 5 5 5 6 7 8 8 8 8 9 11 11 11 11 12 14 14 14 15 15 15 16 16 17 17 17 17 18 18 19 19 19 19 19 20 20 22 22 23 Page 2/26

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GPS VENDORS MOTORCYCLE MANUFACTURERS AND THEIR SUPPLIERS SALES EN MARKETING DISTRIBUTION MARKETING FINANCIAL PROJECTIONS EXIT STRATEGY APPENDICES 23 24 25 25 25 26 26 26

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EXECUTIVE SUMMARY
While integrated GPS navigation solutions are becoming commonplace in the automobile market, motorcycle users are left in the cold with no comparable solutions. Compas aims not only to fill this void by supplying motorcycle users with the first truly integrated navigation system in the market, but by leveraging the available computing power and the flexibility of the platform, propel the system into a 21st century digital nerve centre of modern motorcycles. Compas is an integration project based almost entirely on proven technology, thereby minimizing time to market and greatly reducing R&D costs. By mixing and matching various components and gluing them together through smart software, a whole slew of functionalities is enabled into one highly integrated, yet modular package. These functions range from GPS navigation -which is the main raison dtre- but further extends to audio processing (MP3 music, intercom, GSM integration,..), instrumentation enhancements (indication of selected gear, optional additional engine gauges,..) to more exotic features like internet connectivity, radar warning or interactive theft prevention. The greatest value proposition is that most of these features replace or complement existing, popular standalone motorcycle accessories, through software only. Compas will be positioned as a high end aftermarket product initially, to overcome the very high entry barrier that exist in the automotive manufacturer business for small companies or startups such as ours. As this business plan will show, this aftermarket approach offers Compas a chance to quickly produce a profitable turnover, further develop and prove the product, before trying to enter the oem business of motorcycle manufacturers suppliers in a later stage. Our business plan also foresees establishing partnerships with key niche players in the motorcycle accessory market, like Autocom (motorcycle communication equipment), Apex (telemetry and engine tuning), Daytona (extended instrumentation), Motionresearch (helmet mounted head up displays) and others. These companies would benefit from cooperating with Compas by enabling their customers better, cheaper and more integrated solutions for their respective niches. Compas will benefit through extended market penetration and even greater versatility of its main product. Such partnerships will also provide Compas the unique opportunity of establishing a de facto market standard as digital nerve centre, thereby protecting its market from future competitors and greatly reducing the difficulty of entering the manufacturer supplier market in a few years. To capitalize on this major opportunity, Compass will be positioned as an open platform, allowing and even actively encouraging third party development of software or soft/hardware modules. Because Compas is an integration project, most of the required technology will be purchased or licensed. Therefore, there is no need for a large workforce, and this streamlined approach is also reflected in the management team which consist of a concise blend of professional experience and enthusiasm. Bob Baeyens, who will be CEO and responsible for the product development has an academic background in economy and computer science. Professionally, he has over ten years experience in managing complex software projects at companies such as Real Software, but also has a proven track record in successfully developing and commercializing a visionary telematics AVL solution in the Netherlands. Tim Baeyens, who will lead sales and marketing and oversee strategic alliances is currently Strategic Marketing Manager with Cypress Semiconductor. He has been deeply involved in growing the Belgian IMEC startup FillFactory from a 2.5M to a 24M company in 5 years time, after which the company was sold for 100M to Cypress Semiconductor company. His experience in a broad Sales and Marketing function, driving international sales at key accounts, and setting up a worlwide rep and distributors network will greatly benefit Compas. Compas is seeking a 1M equity injection to commence product development and commercial production.

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MISSION AND VISION

Vision
The 21st century customer is becoming accustomed to the convenience of mobile, digital integration. Car navigation and multi-media, wireless email and internet connectivity, PDA and GSM integration enable us more mobility than ever before. However, for motorcycle owners, achieving similar digital mobility on their bikes -their true passionjust involves too many compromises today. The high end motorcycle market is longing for a next generation digital fabric that will empower them with all the features and functionalities we are taking for granted elsewhere.

Mission
We see it as our mission to bring the motorcycle market this next generation digital nerve center, and enable third parties to supply niche markets with the missing fabric. We will realize this through a high added value aftermarket product with a clear emphasis on navigation and communication. But a solution so flexible, it will extend its reach into uncharted territories.

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THE MANAGEMENT TEAM

This information in this section is only available for potential investors upon request

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THE MARKET
Customer Profile
The Hollywood myth of the young and wild motorcycle rider is less and less a reality in the new millennium, according to Motorcycle Industry Council statistics. Fact: the average US motorcycle owner is: 38 years old, male Married college educated Significantly above-average income ($44.250 median income vs $36.250)
Source: Motorcycle Industry Council

In the US, Europe and Japan, motorcycles are bought almost exclusively for recreational purposes and commuting, and bike ownership practically always is complementary to owning a car. A motorcycle is much more than just a practical or economical transportation vehicle; not only can you get where you need to go on a motorcycle, you can get there feeling a sense of freedom, adventure and escape from day-to-day demands. Quote: Motorcycling is mainstream and it appeals to 'the guy next door' Because of this, owners typically use different, more from an emotional, economic, emotional criteria when purchasing a motorcycle or its performance and even fashion accessories than with a car; subjective criteria like image, standpoint." style, and sensation are generally far more important than more rational considerations like fuel consumption, reliability, comfort, safety or even price (Harley Davisons Beverly. St. Clair success being a good example here ). MD of Discover Today's Motorcycling One could therefore compare motorcycles, especially high end motorcycles like BMWs, HarleyDavidsons or Italian sports bikes to designer clothes: Expensive Unnecessary and often even irrational Expression of personality and style (not to say, for image building)

Another indication of this, is that our research indicates that over 80% of the motorcycles have been modified and personalized with accessories from aftermarket suppliers; these modifications include functional additions (like higher windscreens, hard cases, heated grips, GPS..), performance tuning (other exhausts, steering dampers, modified suspension,..) as well as purely aesthetical improvements (coloured windscreens, anodized bolts, custom paint jobs,..). The motorcycle accessory market is indeed a very healthy market Fact: In 1998, US Motorcycle aftermarket sales were $3.9 billion, compared to $6.5 billion in sales of new motorcycles $1.2 billion in accessory sales $1.2 billion in apparel sales $1.5 billion were spent on repairs and maintenance
Source: Irwin Broh & Associates (IB&A)

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Concluding, one could say that Compas target market consists of people who: Are willing and able to spend on their passion snobs, looking for individuality Used to buy expensive aftermarket products in specialized shops

=> In other words, the ideal target market for a high added-value aftermarket product like Compas.

GPS navigation market

There is a significant demand for navigation units on motorcycles; unlike passenger cars, motorcycles are frequently used for trips where the real destination is not a specific address, but the small scenic roads along the way. Therefore, accurate GPS navigation is arguably more often important on bikes than in passenger cars. Furthermore, unlike in passenger cars, using a conventional map is a very poor substitute as its nearly impossible to read a map while riding a bike. This demand for GPS solutions is clearly indicated by the wealth of offerings of cycle specific handlebar mounts for traditional GPS navigation units (Garmin, TomTom, Navman,..) , by the amount of articles on the subject in specialized press and the activeness of GPS sections of online motorcycle forums. Clearly, GPS is the hot topic among bikers.

Motorcycle market
Size and evolution The US market for motorcycles has been growing explosively, increasing 200% between 1991 and 2001 The overall EU motorcycle market for new motorcycles (>125cc) has been showing a similar pattern, growing steadily from 600k units per year in 1995 to almost 1.4M units in 2000 (source: Febiac).
1400 1300 1200 1100 x1.000 1000 900 800 700 600 500

Motorcycle sales Europe

1995

1996

1997

1998

1999

2000

Source: Febiac

In the year 2000, according to Febiac there where over 14 million registered motorcycles in the EU. Of this number, we estimate at least 1 million motorcycles to be touring or sports/touring bikes of less than 4 years old, and therefore ideal potential customers of a high end navigation/computing aftermarket product like Compass. Worldwide, the overall potential market is in excess of 4 million units with Japan and the US being the two other main target markets.
Motorcycle market segmentation

Market Segmentation The motorcycle market can roughly be divided into the following segments: (super)Sports (e.g. Fireblade, R1) (sports)Touring (BMW RT, K, Goldwing, Pan European, VFR,..) Off road and Enduro (KTM, BMW GS, ..) Naked and standard (Honda CBF, Suzuki Bandit) Choppers (Harley Davidson, Triumph Rocket, ..)
scooter (>125cc) 40%

naked 13% Supersport 12%

Touring 24%

Chopper 11%

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(maxi)Scooters (Silverwing, )

Each segment appeals to a very different audience and in the context of our product, has different requirements. The diagram below gives an overview of which segments represent the biggest market opportunity. We take into account the market share, average value of the motorcycle, the added value Compas provides, the number of motorcycle models compared to their market share (fragmentation) and finally how easy it is to implement Compas: (sports)touring +++++ +++++ +++++ +++++ +++++ 1 (super)sports +++ ++++ +++++ ++ +++ 2 Enduro ++ +++ +++ +++ ++++ 3 naked +++++ ++ +++ + + 4 Choppers +++ ++++/++ (HD) +++ ++++ ++++ 2

Market share High end Added Value Market fragmentation Ease of implementation Ranking

Compas will -at least initially- not be targeted towards (maxi)scooters, since these are mostly used for short range commuting, and relatively low end. Naked motorcycles do not offer a fairing making it harder to install Compas and this market also shows an enormous fragmentation. Therefore, and because naked motorcycles are among the cheapest, this segment will also not be prioritized. Instead, Sports touring is clearly going to be our primary focus, with a special interest to the BMW R/RT line, as this happens to be the best sold motorcycle product in 2003, appeals to a upper market audience and is most frequently used for both travel and commuting. Our second point of focus is sports bikes, also often used for trips, as well as for race track sessions where Compas provides a lot of added value. The third segment that will not be ignored, is that of Choppers, and more specifically: Harley Davidson. The median income of an American is H-D owner is $73.800, roughly twice the countries average. H-D are also well known to be by far the most customized motorcycles around, with modifications costing more than the motorcycle itself, not being an exception at all; their owners pay extraordinarily much attention to looks and style and therefore will resist installing something as ugly as a handlebar mounted Garmin Streetpilot.

Geographic location
The main potential markets for Compas are located in the European Union, the US and Japan. For practical reasons, initial distribution will be limited to the Benelux region, and gradually a dealer network will be established to cover the main markets in the EU. More specifically: Germany, France and Italy which have a very high concentration of motorcycles. However, shortly after a successful pilot roll out in the Benelux, other geographical markets across the world, that are not being served through a network of resellers, will be served as well through direct internet sales of DIY kits to customers who are willing and able to either install the device themselves, or rely on their dealer to do it for them. Many motorcycle owners are technically very skilled, and would not only be able to install Compas, they might even enjoy the process. Furthermore, a number Compas Business plan Page 9/26

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of those skilled customers may choose to adapt Compas or their bikes to make the system work on a motorcycle model that our company has not yet provided a standard solution for. Such an approach of direct sales of DIY kits would allow us to immediately reach a subset of our worldwide market, as well as help our company identifying key markets, potential resellers and partners.

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THE PRODUCT
An integrated, modular and open platform
Integrated Compas aims to become the first truly integrated navigation solution for motorcycles and further evolve into the digital nerve centre of modern motorcycles. As pointed out in the Competition section of this document, current GPS navigation products leave much to be desired for motorcycle owners. But motorcyclists have many additional functional or infotainment desires which are hard to fulfill for the simple reason that motorcycles do not offer enough space to mount all the devices one could wish for. Mounting just a GPS device is already cumbersome on its own, but adding an MP3 player and a radar detector is going to be nearly impossible an all but the largest touring bikes on the market.

The only sensible way to solve this problem, is integration: having all these devices share a common multifunctional display, a common human interface and where possible or required, share CPU processing power and data storage from a single computer system embedded into the motorcycle.: The advantages of an integrated approach are huge: Superior ergonomics and ease of use Potential cost saving Space saving Enabling of interaction between different system modules Nearly unlimited functional expandability Impossible to steal Integrates seamlessly into the design of the motorcycle

The only serious disadvantage of this approach is the lackluster investment protection, since it will be hard or impossible to transfer such a system from one bike to another. This, however, is no different from the automotive world, where the resell value of integrated options like audio or navigation devices is dismal. Modular In the following sections we will highlight a large, but by no means exhaustive number of modules, both hardware and software, that will gradually be made available for Compas; but the core of Compas is made up by 3 components: A central processing unit (CPU). Human Interface Device (HID) or input device Central Multi Function Display unit (MFD)

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Compas: the digital nerve centre of the 21st century motorcycle CPU: The cpu is a small but powerful embedded processor board that is complemented with mass storage (compact flash) and extended I/O (digital and analog inputs, USB, audio and optionally Bluetooth and CAN bus). This cpu will based upon one of many available rugged, off the shelve products that are small enough to easily fit in the size of a palm.
Based on a x86 (pentium) compatible processor, the board can run a wide range of available embedded operating systems like Embedded Linux or Windows CE and be programmed in a language of choice. Further more, because of its x86 compliance, it will be easy to develop software for, leveraging the huge available software base and wealth of development tools that exist today for Linux on the PC platform. Using an off the shelve CPU dramatically decreases R&D costs, and x86 compliance significantly reduces the complexity of software development.

HID: The HID is a device that will have to be designed specifically for this project. A small, waterproof cluster of buttons and a push/turn dial will have to be mounted on the handlebar to allow safe and ergonomic operation of the device while riding. The HID can optionally be complemented with a touchscreen display that will increase the ease of use for certain operations like entering addresses or accessing more advanced features, but a touchscreen, is not very practical or safe to use while riding. MFD: Lastly the Multi Function Display will be the most visible
element of Compas. In order to really dramatically improve ergonomics and flexibility, the MFD will not complement, but replace existing instruments. This approach allows a maximum size display that is ideally positioned and does not interfere with the design of the motorcycle; quite on the contrary.

The downside of this approach is that almost each motorcycle has a different instrument cluster, and therefore motorcycle specific variants will need to be developed. To keep these costs manageable, the MFD will not replace the entire cluster, but will simply replace the analog round instrument found on almost every motorcycle. This eliminates the need for expensive injection moulds. LCD displays exists in a wide range of rugged, extended temperature range, sunlight readable and low power products. Based on a standard reflective LCD product, we will invest in a redesign to perfectly fit our very specific requirements. Especially standard round displays are very rare to come by. Thankfully, it is not that hard or expensive to redesign a round LCD based on a rectangular standard product. An alternative (or addition) to the MFD that will be seriously considered and researched, is a helmet mounted heads up display. Motionresearch, a US company has only recently released the first commercial product of this sort, the SportVue, a $320 helmet mounted display that clips on to any helmet visor and projects an image that seems to float ~3 meter in front of the user. Helmet manufacturers are also known to be working on similar products. Once this technology has proven itself mature and viable, the MFD could potentially be eliminated all together from Compas and replaced with a universal HUD solution, leaving the original instruments intact. Open To further increase the versatility of Compas, our product will be positioned as open platform. This means, third parties will not only be welcome to interface with our product, we will actively encourage this to help Compas establish itself as a market standard. Application Programming Interfaces (APIs) and hardware I/O specifications will therefore be fully documented and provided to any interested party to allow them to create software or hardware modules for Compas. x86 compliance will ensure that existing applications can be ported to Compas with a minimal effort. Compas Business plan Page 12/26

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The picture below provides a schematic of Compas base components :

GPS Multifunction (touch)display Speedo Tacho Blinker ,.. Embedded computer

Temperature Oil pressure Fuel,..

Mass storage Map data

In the following chapters, we will highlight a number of software or soft- and hardware modules that will be developed for Compas over time.

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GPS navigation
Superior GPS navigation is probably the most compelling feature of Compas. In the section Competition of this document, one can read the main attributes that will differentiate Compas clearly from its competition. In short, the integrated approach gives Compas some key advantages that its stand-alone GPS competitors can not match: ideally positioned, large display perfect sunlight readability (albeit at the expense of multicolor) ease of use through customized, better positioned human interface device superior navigation precision using motorcycle speed information clutter free looks: no cables, no mounts theft protection possibility to interface with (future) helmet mounted displays or other projection devices (eg on windscreen for large tourbikes)

Electronic Roadbook
Motorcycles are very frequently used for trips over scenic roads. In this case, a traditional GPS device is not ideal since it will only allow you to navigate from point A to point B using the shortest or fastest route, but it will not guide you through the most beautiful places or the most challenging curves. What motorcyclists need, is a way to follow an exiting route that is prepared by someone who knows the region. Such routes are widely available in the form of ball-arrow schemas that can be printed on paper and inserted into a roadbook reader. Tripy is a 550 device that will shortly be introduced into the market to replace such roadbook readers with a more intelligent electronic alternative using a GPS and a LCD display to guide the rider through a route previously downloaded from the internet. It was designed specifically and exclusively to address this need in the motorcycle market. It does not contain any (streetlevel) maps and can only be used to navigate the preloaded trip. Compas, however, will completely eliminate any need for such device, enabling the exact same functionality but with added advantages like the ability to deviate from the route without losing the navigation ability, and by leveraging the internal geodata to navigate to nearby hotels, restaurants or fuel stations, etc.

MP3 player
Contrary to popular belief perhaps, many motorcycle riders do like to listen to music while riding. For this reason high end vehicles from Honda and BMW come with factory installed FM radios and (optional) CD changers, to play music through the integrated speakers or helmet mounted speakers. On less luxurious touring or sports touring bikes this demand also exists, but its rarely seen for the simple reason its nearly impossible to practically install an aftermarket radio or CD changer. Instead, walkmans or small MP3 players are frequently used and connected to the helmet speakers. Compas will replace the need for such a separate MP3 player, by storing the MP3 tracks on its onboard storage, and providing music playback through the unified audio out, as well as volume and other controls through its unified HID. The advantages of such a simple software-only addition are fairly impressive: eliminates the cost of a separate MP3 player ensures there are less cables to worry about Compas Business plan Page 14/26

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no need to replace the batteries volume and playback control will be much more useable than the tiny MP3 player controls that can not be operated wearing motorcycle gloves play list and selected song can be displayed on the central console, not on a display hidden inside your jacket. Compas could automatically increase the volume as the speed increases, something not possible on a standalone MP3 solution.

FM or DAB radio and traffic management

Additionally, an FM or DAB tuner could be sold as an option and be integrated into the system, allowing the user to also listen to the radio, or just use the traffic information functions of DAB and RDS.

Trip computer
Compas, like most of its stand alone GPS alternatives, will feature an extended trip computer, allowing the user to record his trip, display information like average speed, maximum speed, track distance, etc. Compas could also display some additional statistics like fuel consumption. To accommodate desires of performance enthusiasts, this can further be complemented with a track computer:

Track computer
Many motorcycle owners regularly take their vehicles for a track day or weekend, to fully experience the potential of their machines in a legal and safe way, and to increase their riding skills. For this audience, Compas will open a slew of possibilities; by logging GPS and instrumentation data (speed, revs, gear, temperature..), Compas owners will be able to playback and fully analyze their laps on their PC using (available) software. The MFD and HID can also be used to act as an advanced lap timer, or even display customized information (breaking points, graphs showing current speed versus last lap, etc,..) Such functionality is currently only possible using specialized equipment from companies like Apex, but Compas could bring this into the realms of recreational track racers as well. Companies Apex and Racepak sell GPS enabled data loggers for this very purpose, and complement their offering with an wide range of additional sensors like fuel/air mixture, tire pressure, G-Force sensors, etc., as well as displays to mount in the cockpit. These products are clearly geared towards semi professionals; the market offers a wealth of these sensors, but the missing link is the interfacing, logging and displaying of the information for which only very expensive, and outdated devices are currently available (limited storage, no or clumsy display, RS232 output, ..). Compas could over time replace those with a much more powerful, single standard solution and our company will therefore strive to establish partnerships with established niche market providers like Apex, allow and even promote them to integrate their know how into Compas soft/hardware modules. Compas might even accommodate on-the-fly reprogramming of engine parameters (fuel injection, ignition ECU) in collaboration with experts in the field of chip tuning.

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Gear position indicator and shift lights

Motorcycle gears are always sequential (Formula 1 style). By pulling or pushing a lever with the left foot, the rider can shift up or down one gear at the time. Therefore, there is no way of knowing for sure which gear is currently selected. Especially less experienced riders usually have difficulties with this, for instance when they do not downshift quickly enough when slowing down for a red light, and then find themselves searching frantically for the appropriate gear when the light switches to green again. But not only novices benefit from a visual indication of the selected gear, also experienced riders will have trouble knowing whether they are in fifth or sixth gear at higher speeds. This is because motorcycles generally have close ratio gearboxes and compared to passenger cars, an extremely wide range of useable RPMs (0-12.000 rpm being typical). The result is that even seasoned bikers continually find themselves trying to shift into a seventh gear that does not exist, or forget to shift into sixth. Since almost no bike on the market offers a factory installed solution for this, a popular accessory is a gear position indicator as shown in the image (~450). It uses a sensor in the shift lever and a separate display indicating current selected gear. Such devices will generally also provide so called shift lights, formula one style indications of the optimal time to shift; a feature mainly performance enthusiasts or recreational track racers appreciate. Compas could easily replace both functions of this device, and extrapolate the gear currently selected by dividing the speed and rpms and display the selected gear on the central display. Shift lights are obviously even easier to implement, and once more, neither functionality requires any additional hardware. All that is needed is a minor software module. Optionally, this could be complemented with a sensor to increase the accuracy (e.g. when the clutch is pulled).

Intercom
Intercoms are by far the most popular accessory on touring motorcycles. Using a helmet mounted speaker and microphone set, such a device allows the rider to communicate with his backseat passenger. A wide range of factory installed and aftermarket products exist, ranging from the most basic units to voice-activated units with intelligent volume control and noise reduction. Higher end solutions also provide additional audio inputs to combine MP3 music, GPS vocal guiding and/or other audio sources like GSM. Most solutions also provide the option to connect an FM radio transmitter, to enable short range bike2bike communication; a must-have feature for people doing trips with friends. Compas will not replace the radio transmitter, but will optionally integrate it. Compas will eliminate the need for the intercom device, allowing the owner to plug his helmet mounted headset(s) straight into the system. Using software, Compas will implement the voice activation (if desired, push-to-talk is of course also possible), volume control as well as greatly increase the ergonomics by centralizing both the human interface device (buttons) and the display output (eg selected FM/CB radio channel). Some cross over functionalities are also enabled, like Compas Business plan Page 16/26

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sharing MP3, radio or GSM audio between rider and passenger, intelligent muting, speed dependent volume, etc. Of course, Compas will also be able to connect to existing wireless solutions; some helmet manufacturers offer products with battery powered integrated Bluetooth connectivity and factory installed speaker/microphone sets to free the motorcycle owner of additional cable clutter.

GSM voice and data integration

Compas can also optionally enable GSM integration through either Bluetooth connectivity or by using an integrated industrial GSM module (including SIM). Advantages of using Compas as GSM controller are obvious: No cables to connect Multi function display (MFD) and Human Interface Device (HID) centralization provide superior ease of use, eg: Display caller name and phonebook on MFD Display SMS messages on MFD Control GSM through HID Intelligent muting, volume, etc

However, by combining the power of Compas CPU, the flexible MFD and the GSM connectivity, suddenly an entire world of revolutionary new applications is enabled, some of which are highly desirable, and all of which only require software. These applications include, but are by no means limited to: Internet connectivity Interactive anti theft Interactive radar trap warning

These applications will be described in detail further in this chapter.

Speed trap warning

Most motorcycles offer ample performance, and a typical sports bike will accelerate from standstill to a loss of driver license in less than 5 seconds, even on highways. Its therefore no surprise motorcycle owners are looking for ways to prevent high fines and loss of their license. Currently, there are two (complementary) approaches here, the first is illegal in most EU countries but is affordable and works fairly well: the radar detector. The second is a very recent development, a perfectly legal, GPS based warning system, but that only works for immobile traps. Compas could also implement a third approach, that is both legal, and works for both mobile and immobile traps. Classic Radar detector While illegal in most EU countries, radar detectors are still among the most popular accessories found on motorcycles, especially on sports bikes. Compas could be used to interact with detectors that have a standard output to display a more readable warning on the central display, and/or connect to the audio signal. GPS based speed trap warning Very recently, a few companies have started offering devices that use a GPS receiver combined with a database of all immobile speed traps. These devices warn the driver when he approaches such a trap at a speed that is superior to the maximum allowed speed. This solution is simple and effective. Compas Business plan Page 17/26

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Further more, it is not only legal, it is even encouraged by governments since it will ensure the driver will not speed on places where such a trap is placed (which typically are dangerous roads). Motorcycle riders however, up to now can not benefit from these devices, since currently none of these products are waterproof, and again, they are too bulky to mount. Remarkably, none of the mainstream GPS navigation devices currently implement this functionality either, although one can expect Streetpilots and other navigation devices will incorporate this in the future, most likely even before Compas hits the market. Compas, upon launch will also use this speed trap database to provide early warning when speeding. The added benefit over a future Streetpilot class product here is clearly a better visual (as well as optional audio) warning; its not much use having such a solution if you can barely read the display under averse lightning conditions or when the display is positioned out of sight. Wireless speed trap location transmission Compas flexibility could be used to enable an entirely new way to avoid speeding tickets from mobile speedtraps; locations of such traps are reported to radio stations by and to their listeners, and in many countries, up to date lists of these locations are published on the internet. Neither approach is truly practical though, a better way would be to transmit these locations to the vehicle. This could be done continually through RDS data or DAB traffic management by the radio station. If and when this ever happens, Compas will be ready to make use of it, requiring only a software update (provided the radio option is installed) Another approach that could be implemented right away, is to have the vehicle request those locations to a provider using GSM data (requiring the GSM option), or by simple SMS, to which the provider could respond by sending the coordinates in a format Compas understands. One could easily imagine a third party or our own company offering such a service in collaboration with radio stations or other providers of this data. Owners of Compas could even report radartraps by semi automatically sending an SMS containing the position of the radar. Using special paying SMS number to request the data, this could both serve as a lucrative revenue stream as well as a major selling point for Compas. Such a service could well be extended to other programmable products capable of communicating through GSM or connecting to the internet, such as PDA based navigation devices or smartphones, and form the subject of a separate business plan all by itself.

Theft prevention and recovery

Theft is the nightmare of every motorcycle owner. No matter all the products on the market, fact remains bikes are relatively easy to steal. Furthermore, most insurances only cover theft when it occurs inside a closed garage. To reduce the risk of theft, every motorcycle owner resorts to all sorts of locks, and a large fraction installs an alarm that is triggered upon sudden movement. Spyball is the largest supplier of such devices. Compas , when installed with the optional integrated GSM with SIM card, will greatly reduce the risk of theft, and increase the effectiveness of Spyball-class products, by enabling two additional functions: Paging functions Remote tracking The paging function can be used to send an SMS or make a call to the owner, warning him his alarm is going off, allowing the owner to check out his motorcycle when he is nearby. The remote tracking option is even more revolutionizing; when the Compas enabled bike does get stolen, the owner will be able to call the phone number of the integrated SIM card, enter a pin code, and Compas will respond by using text to speech software and the integrated GPS to tell the owner the current (or last known position) of his stolen bike!. This is quite feasible by putting the system in a low power, deep sleep mode when the alarm is activated, and wake the system up on

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incoming calls. To prevent battery draining, Compas will have to switch itself completely off after a certain time, but this also applies to Spyball alarms. Again, one should note that this functionality requires no more than some software, and for the paging function, a connection to the movement sensing alarm.

Internet and email

Since Compas features a standard CPU as well as optionally GSM integration, adding internet connectivity (GPRS or GSM data) is trivial. For each platform and OS there is a wealth of browsers and email programs available. Opera for instance, has internet browser products that are specifically designed to display normal websites on very small displays such as PDAs or smartphones. Email functionality could be implemented just as easily, and to be more useful on a motorcycle, text-tospeech software could be implemented to have emails (or SMS) read to the user through his intercom. Clearly, there is not yet a huge demand for internet connectivity on a motorcycle today, but 5 or 10 years ago email functionality or DVD playback in a car sounded even more absurd. Furthermore, like so many other features that Compas offers, all that is required is a minor software addition to create a feature that just does not exist yet and certainly will appeal to people who love high tech gadgets. Still internet connectivity could indeed become very useful on a motorcycle if it is used to connect to a portal site designed just for this purpose. This portal could supply the Compas owner with focused, up-to-date information like weather forecasts, locations of speed traps, connect him to repair services or help him locate a nearby motorcycle dealer. It could also be used to download scenic routes to his navigation device, thereby not only replacing a device designed for this very purpose (Tripy, a 550 tripcomputer), Compas would even be clearly superior as these routes can be downloaded on the fly instead of having to download them from a standalone PC.

Redefining the word flexibility

Since Compas is an open platform, featuring standard connectivity (eg USB), nothing will stop enthusiasts from creating applications to accommodate gadgets and applications we would never have thought of. These could be volunteer projects (shareware/freeware/opensource) that publish their programs online for others to download, or these could be commercial third party niche market solutions. Some examples: Customized screen layouts, logos Since motorcycle owners tend to personalize their bikes so much, why not let them personalize their digital dashboard ? Let them create custom logos and display layouts, and let them share it over the internet. This approach didnt hurt Nokia in the early GSM days. Extend instrumentation Many motorcycles come with very limited instrumentation; Even high end bikes like the BMW R1150R often lack basic instruments like temperature or fuel gauge. Using cheap, off the shelve sensors, Compas could extend this basic instrumentation and centralize the information on the MFD. USB Web cam By attaching a 20 USB web cam, someone could turn Compas into a digital video recorder. Some people will surely like the prospect of being able to record their trips, stunts, or track sessions without risking and having to mount a 1.000 DV camera.

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Someone could even write an application to use a web cam as a rearview mirror, by displaying the image on the MFD (rear view mirrors are a notorious problem on motorcycles, some people actually mount a camera and display for this purpose alone). Fingerprint sensor One can buy USB fingerprint recognition devices for as little as 30. With a little software, this could be used as anti theft device, or to identify the owner and configure the bike according to his preferences. Custom implementations Specialized companies could use Compas devices to create very specific niche market implementations; for instance police motorcycles, parcel services, VAB, or bike rental companies. The list is literally endless.

GPS

Speedo Tacho Blinker,.. Temperature Oil pressure Fuel,. Radar detector

GSM

Intercom

Multifunction (touch)display

Embedded computer (Web) Camera Finger print recognition & Other gadgets Chip tuning Telemetric sensor data Gear indicator And/or Helmet mounted Head Up or lens viewer Map data Radar trap data

MP3 music Data logging

Headset

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Below is a summary of all the devices Compas will entirely replace though software modules: Product GPS (Streetpilot, Navigator II) Market Value 1.000-1.600 Advantages over Compas Investment protection Main Disadvantages over Compas Mounting No Traffic information Risk of theft Impossible to use with HUD Requires batteries (or extra cables) None Ergonomics (controls) Display positioning Limited # CDs Limited # audio inputs No sharing of MP3, GSM,. No speed dependant volume Mounting Can not be used autonomously (needs PC for download) ~30 monthly fee Displays optional GPS optional Readability Ergonomics Accuracy Looks

Gear position indicator MP3 player CD Changer (Goldwing, BMW RT) Intercom GPS radar warning Electronic roadbook (Tripy) GPS theft recovery and paging (Onstar,..) Track logger (ex. sensors, no display, no GPS)

450 100-300 1.200 150-300 300 550 200-1500 1.500-3.500

Slightly better accuracy at low speeds Portability None None None Routes available on internet Extended functionalities Potentially harder to circumvent Standard connectors Comes with PC software

No speed dependant volume Needs batteries Takes up a lot of space (trunk) Troublesome HID Cables, mounting, batteries Not waterproof Requires batteries No backlight No motorcycle specific products available Impossible to use with HUD 1-4 Mb storage only

Total value

5.400 9.700

Note this list does not include completely new features Compas will enable such as interactive radar warning or internet/email connectivity, nor does it include any of the functionalities that could be enabled by the user or third parties (camera, instrumentation extension,..) or does it list the advantages of cross over functionalities like better GSM integration.

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COMPETITIVE ANALYSIS
GPS navigation is slowly becoming a commodity product in the automobile market, where more and more car models are offered with full fledged integrated navigation devices. The aftermarket is also being served well with a wide range of add-on or integrated devices from established industry players like Garmin, TomTom and VDO-Daytona. In the motorcycle market such a wealth of solutions does not exist. Quite on the contrary, all but one motorcycle manufacturer even completely ignore this market up to now, and instead rely on poorly adapted third party solutions available on the aftermarket. The only minor exception to this rule is BMW that is the only manufacturer to date that offers a GPS solution at all, the BMW Navigator II, but this product is basically a rebranded Garmin Streetpilot, a device conceived primarily for automobiles.

Indirect competition (standalone GPS navigation)

Today, these solutions are nothing more than the same devices that are positioned as automobile solutions and do not take into account any of the very specific requirements that exist on a motorcycle, nor are they integrated in the design of the motorcycle or can they be used to interact with other electronic devices onboard. As can be seen in the table below, serious compromises have to be made today:
Solution Basic GPS GPS enabled PDA I-Cue Streetpilot TomTom Navman BMW Navigator II Waterproof Sometimes No No Yes No No Yes Audio routing No Yes Yes Yes
1

Navigation precision N.A. Poor Poor Poor Poor Poor Poor

2

Memory capacity N.A. Variable /good Very limited Variable /good Variable /good ? Good

Ergonomics/ Versatility ease of use on motorcycle Poor Very Poor Very poor Good (Stylus) Very poor (Stylus) Mediocre Mediocre Poor Mediocre Good Very Poor Very Poor Very poor Very Poor

Price Cheap Expensive but multipurpose Expensive but multipurpose Expensive Expensive ? Expensive

No audio out ? Yes

1 These devices have audio out, however there are no provisions to combine this audio with other audio sources like MP3 player, GSM or intercom requiring additional hardware and cabling to combine them. 2

Some Streetpilot models do have an input for speed pulse signal to increase accuracy, but this can not be used on a motorcycle since there is no standard speed signal out on motorcycles today !

None of the available solutions offers high navigation precision like we are used to with our integrated car solutions; to enable this accuracy, such devices need to complement GPS reception with an electronic compass and information about the speed of the vehicle (typically obtained by standard connector in a car). This is the only way GPS navigation can work reliably in cities with high skylines, in tunnels, in mountainous areas or high density forests where GPS reception can be temporarily obstructed and extrapolations need to be made during the time it takes for the receiver to reacquire its satellites. Further more, none of the solutions presented can be called anywhere near ergonomic. Some of the solutions like the I-Cue (which is a PDA based device with integrated GPS receiver) rely on a tiny stylus to manipulate the touchscreen, a downright horrible idea on a motorcycle. None of the

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solutions can be positioned ideally, most of them need to be mounted either on the handlebars or on the tank using specialized mounts where the display is positioned out of sight of the rider and/or blocks the view to the rest of the instrument cluster. The list of inconveniences goes on: devices require either batteries which empty quickly or additional cabling high risk of theft means you need to remove the device every time you leave your bike unattended (what to do with the cables ?) bolted on solutions like this are both ugly and bulky, practically excluding the possibility of mounting other accessories like GSM, intercom, MP3, or even disallowing the use of a tank bag without obscuring the display of the GPS (BMW navigator). Lastly, it should be pointed out that almost all popular GPS devices with street level navigation today have colour displays. This is clearly an advantage in a car, but a double edged sword on motorcycles: current LCD technology is not yet able to deliver truly sunlight readable, colour displays without consuming excessive amounts of power or being completely unaffordable. The result is that the displays of all these navigation devices are hard or even impossible to read on a motorcycle under direct sunlight; a situation that never occurs in a passenger car with fixed roof. Compas on the other hand, would use a reflective LCD display, which is currently only available in single colour grayscale technology. Reflective displays reflect sunlight, and therefore become even more readable as more light is applied. Colour is certainly not essential to Compas, and far less important than readability; but if and when colour display technology matures, Compas could easily be offered with a colour display as well.

Direct Competition
To date, Compas has no direct competition from other integrated, multi functional navigation devices in the motorcycle market, but considering the vast amount of deficiencies associated with current products and the advantages of an integrated approach, it may be hard to believe better solutions are not being worked on. And yet, none of the current market players are truly well placed to produce a product that could compete head on with Compas GPS vendors Garmin is major force in the market with ample technical resources, experience and marketing muscle. It is also currently the uncontested market leader, if not, monopolist in the motorcycle navigation market. This is not because of Garmins clear focus on this market, but because Garmin happens to have the only waterproof streetlevel navigation unit available. Its important to note the water resistance was not built into their unit for the purpose of conquering this market, but rather was a heritage from the product the Streetpilot was derived from: a maritime navigation unit. Based on that product, Garmin developed a street level navigation device for vehicles, using the same waterproof enclosure. Garmin however, never marketed their product as a motorcycle solution until the motorcycle market discovered it as the only water resistant navigation option Even today, Garmin does not seem to be doing any effort whatsoever to increase its penetration in this specific market; neither on the marketing front, nor with technical innovations that would address at least some of the specific requirements for this market. For instance, it should be really easy to adapt the software to display larger buttons on their touchscreen so they can be operated wearing motorcycle gloves. And yet, in order to work around this problem, BMW had to design a cradle with some additional (large) buttons to replace frequently used touchscreen functions. Another example of their lack of focus on this market is the fact that to date, they have not even added an MP3 playback feature, something the device should be more than capable off with a minor update and a simple feature, but one that would be quite an asset in the motorcycle world. And yet, apparently because this is not useful for their main market (automobile), Garmin doesnt add it. One

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can only conclude Garmin is resting on its laurels and focusing its attention on other markets (automobile, maritime, and sports) In general, GPS vendors like TomTom, Navman and Garmin have a clear focus on one size fits all, high volume products. They need to, since they have to compete rigorously on price in the automobile or handheld/PDA market. One should expect product derivates from TomTom or Navman that might be better suited than todays solution (water-resistance being a sine qua non), but these upcoming products will almost certainly: not extend the functionality of the device much beyond their core business which is navigation. be a standalone product, therefore not integrate into the instrument cluster, and therefore, not be able to take advantage of functional crossovers like gear position indication, GSM interfacing, etc. Most of the shortcomings mentioned above, like cumbersome positioning and mounting, and lacking precision will also still apply as these limitations are inherent to a non integrated approach.

Motorcycle manufacturers and their suppliers Motorcycle MFGs are better positioned to see and respond to the demand that clearly exists in their markets, especially since many of them (like BMW and Honda) already have tangible experience with such solutions through their passenger car divisions. BMWs rebranded Garmin solution is a first indication of things to come, and recently Syca, a Taiwanese scooter vendor presented a prototype of a scooter with integrated PDA, used for navigation as well as multimedia (email, internet, MP3). Hard to believe, this prototype (that will never be commercialized) is the first and only public display to date of a somewhat integrated motorcycle GPS solution -it was a rather poor attempt at it too, a fragile PDA mounted out of sight, in the tank behind a Plexiglas cover. Motorcycle manufacturers, like their automotive brethren are typically slow to adapt to changes. It is only recently that integrated car navigation is becoming widespread and affordable, as well as a key selling point, in spite of the fact that quite useable aftermarket products have been readily available for over 15 years. Presumably for reasons of economy of scale, it is also a pattern that innovations are introduced into automobiles roughly 10 to 15 years before they are introduced onto motorcycles. Examples of this include anti lock brakes, a standard feature on just about any car in the last 10 years, yet only now do Honda and BMW offer anti lock brakes as an option on their high end motorcycles. This is all the more remarkable as ALB/ABS is far more important on a motorcycle than in a car (lock the brakes on a car, and you may not be able to turn, lock the front wheel on a bike, and you will most likely crash). The same pattern is observed with technologies as diverse as fuel injection (today, many motorcycles are still carburetor fed), digital instrumentation, catalysts, variable valve timing, etc. If this trend is continued in GPS navigation, it will be more than 10 years before optional, factory installed, integrated GPS devices on two wheels become commonplace. Telling in this context is also the fact that even though BMW very recently introduced a totally renewed high end product pallet (K1200, R1200RT, K1200S), packed with exotic luxury features like hydraulic center stand, electrically adjustable windscreen or seats (!), integrated CD audio, electronically adjustable and intelligent suspension, still the only navigation option is the Navigator II with all its flaws. Worse even, on the brand new flagship luxury cruiser (K1200LT), a 23.000 motorcycle, the optional BMW navigator II (1500) blocks the view on part of the integrated LCD display (picture).

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Even if these companies vastly accelerate their plans, it will be at least 10 years before the aftermarket for navigation devices has dried up. Well before that time, Compas will be in a pole position to become an oem supplier. Conclusion: motorcycle manufacturers are clearly much more a long term business opportunity than a competitive threat.

SALES EN MARKETING
Distribution
Compas will be distributed through 2 channels: direct internet sales, and accessory distributors. For motorcycle accessories, international distributors exist that provide motorcycle dealers and accessory/apparel shops with a wide range of products. Examples of such distributors are Splash Design (Benelux) and Bike Design. These companies will enable us to reach almost every motorcycle dealer/shop with minimal effort and costs. However, because of the relative complexity of the product and to assure quality, Compas will be sold mainly through and installed by authorized dealers, who have been trained to install, maintain and support the product. To enable us to quickly and cheaply reach a worldwide customer potential, Compas will also be sold as a Do-It-Yourself kit through the internet. This approach would target technically skilled riders (many motorcyclists are technically highly skilled), but also others could purchase the kit and have it installed by any dealer. For such devices, support and guarantee will be limited to the device itself, and not the installation.

Marketing
Compas will be marketed primarily through specialized motorcycle press, both in the form of traditional adverts and by having these magazines review our device. Four out of five motorcycle riders regularly read such publications. Furthermore, articles/reviews of our product are the best way to inform our customers of the broad feature set. In addition to paper press, Compas will also rely upon active online communities to market its product, again leveraging traditional online advertising on specialized sites, as well as ensuring online product announcements, articles and reviews are made available on specialized websites like www.motor-europe.com. Compas will present its product on a limited number of international motorcycle fairs, where possible in collaboration with distributors and technology partners which generally already have a presence there. Finally, Compas will be marketed through our dealers, providing them with POS advertising material.

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FINANCIAL PROJECTIONS
This information in this section is only available for potential investors upon request.

EXIT STRATEGY
This information in this section is only available for potential investors upon request.

APPENDICES

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