Earlier this year, when Mobile Star Corp. announced the results of a 30-day test run for their newly developed coin-operated karaoke machines, the company presented dramatic confirmation of its product’s potential. After all, the idea of someone paying for the opportunity to walk into a box and sing along to a recording has never been approached, especially when considering the fact that the user takes away a CD of their performance. The only way the company could generate meaningful numbers and prove itself to investors was to actually test the concept in a real-world environment, and this is exactly what they did, setting up at a popular amusement center in Westchester, New York.
At the end of the test run, results exceeded expectations so dramatically that Mobile Star was forced to reconsider all of their previous sales and pay-back calculations. A professional evaluation determined that the return-on-investment for an individual unit would only be about 6 months, far superior to industry standards for a coin-operated vending machine, and well below their originally estimated pay-back of 12-15 months. The company finally settled on a conservative 9 month figure. In addition, the company also upgraded its sales projections by 35%-40%, due to the significantly improved ROI it could offer the marketplace.
In the original statement, Mobile Star also indicated interest from several potential distributors following the successful pilot. It was later announced that the company had signed a distribution agreement with Apple Industries, one of North America’s major manufacturers and distributors of coin-operated electronic entertainment products. Allen Weisberg, president of Apple Industries, said regarding the system’s potential, “Today there are over 40,000 bars nationwide with jukeboxes. We anticipate placing the Mobile Star in many of these locations in the coming years, in addition to other locations such as nationwide theater chains, etc.” He went so far as to indicate that they expected to distribute over 1,000 units within the first year.
Most recently, Mobile Star announced that the company had secured the required financing to meet the company’s commercial goals for the next six months, as the company prepares for product launch.
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