Strategy and Vision – Xplora UK

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REPORTS AND PRESENTATIONS

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Annual report

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Strategy and Vision

Xplora was founded with the mission to give children a safe onboarding to digital life and a better balance between screen time and physical activity. Xplora’s vision is to enable children around the world to experience how their everyday activities can make a positive change to the world.

Over the next two years the Company aims at selling 1.5 million smartwatch units, indicating a 3% hardware penetration in target markets and around 1% share of the expected global market volume. This goal is supported by primarily three inputs; i) strong, established partnerships with telecommunication companies; ii) own experience from Nordic operations and reference points from Asian markets; and, iii) competitive situation..

 

i)

Telecommunication companies have strong incentives to market and sell smartphones for children, as this opens for increased volumes in an underpenetrated market segment and may reduce churn on existing customer base through stronger family plans. Xplora has formed strong partnerships with selected European telecommunication players, including Vodafone, Deutsche Telekom and Orange, with extensive market reach across Europe, Asia-Pacific and the Americas. The Company is targeting further telecommunication agreements.

ii)

Upon establishment of the Company, evidence from Asian markets showed penetration rates of 8-12% for kid’s smartwatches in a 2 to 3 year time horizon. Following nearly 3 years of operations in Norway, via a common Nordic distributor, Xplora has achieved a market leading position, with more than 11% of kids in the target group owning an Xplora watch. Despite only being present in Sweden since January 2020, Xplora has already reached a market penetration rate above 1%, following a similar growth pattern as achieved in Norway. While it took longer to reach 1% market penetration in the target group in Germany, the Company is now eyeing a similar growth trend as experienced in Nordic markets.

 

iii)

The market for kids’ wearables is highly competitive, with several players approaching the same target group as Xplora with comparable devices, or potential kids-friendly services for smartphones. However, Xplora views that few of these competitors offer similar value proposition as Xplora, such as value-added services and connectivity enabled by Xplora’s unique service platform, as well as engaging content developed in joint venture with business partners. Xplora has a strong time-to-market advantaged in this new and untapped market.