Hello Elisse,

Here is my report for our client company: companyX regarding renting new phones to customers
for a monthly fee instead of selling phones to customers at a discounted upfront cost. My
recommendation is that they should proceed with investing in the new product because incremental
profits will increase year by year.

Below are the reasons why I recommend this move:

Changing customer preferences

● Our research showed that our customers prefer to always stay on top of the trending
gadgets. They like to buy the most recent up-to-date smartphones.
● Industry-wide sales of mobiles have been going up by 10% yoy , and price of newer phones
are quite frankly too steep for an average person.

Competitors have introduced similar products and done well

● Increasing people are moving to leasing their effects rather than buying . Best example being
success of car renting businesses.
● I found that our main competitor, rent4keeps.com, had introduced this plan some years ago
and they have been very successful.
● Further research showed that this growth could be attributed to the changing customer
preferences and our brand being well known in the market,implementing the strategy could
actually help take higher portion of market and hence profit.

Small increase in cost

● The new plan will not significantly increase costs
● Our client will not need to invest in buying new phones while we can tie up with large
brands to provide connection free with the new sets.

In conclusion, looking at the 3 point above, our hypothesis is that this should be a profitable business
to venture into and it is estimated that the 3 year NPV of this project will be positive.