Hello everybody,
I recently encountered this market sizing, which looks quite complicated to estimate.
Any recommendation would be appreciated!
Hello everybody,
I recently encountered this market sizing, which looks quite complicated to estimate.
Any recommendation would be appreciated!
Hi,
you do that like any other market sizing question. The idea is to find the number of potential customers for the whole market.
One way to do it is to look at the number of flights per year. First of all, it would be good to understand if the question is related to a specific country or not as you need to start with a population number. Then you could think of how many flights does an average person take per year. Let's say an average person take 2 flights per year. Then you would need to estimate how many people on a plane carry devices with WiFi-connectivity. Let's say 80 per cent of passengers (alternatively, break that down again; to estimate the number of WiFi devices use the replacement concept (every three years a person buys a new smartphone on average etc.)).
The market would have a size of:
Percentage of WiFi Users * Population * Number of flights per person, for the US that would be 0.8*320M * 2 = 512M
In the end, you may propose some options of how to actually charge customers for this service. Of course, you can always add some more features to your estimates.
There you go!
Best,
Daniel
To answer this correctly you need to account for both to supply of in flight WiFi services and demand.
i would propose a solution as follows:
volume:
Number of aircraft globally x % of aircraft that are WiFi enabled (should be quite low %) x aircraft capacity in passengers x load factor % x number of flights per day x uptake of in flight WiFi % x 365 days in a year
price:
price per hour x average number of hours used
A solution based on flights per person could also be used and may be easier but needs to account for how many flights actually offer the service.