Iridium: Is the sky falling again? [Mqurice, check out the free phone for 1 year idea...]
By Fred McClimans
Network World Fusion, 06/28/99
Iridium last covered the earth 65
million years ago, when a meteor
hit the Yucatan and wiped out the dinosaurs.
Today, Iridium once again covers the earth, only this
time as a satellite-based phone network. But this time,
it could be going out with a whimper, instead of a
bang.
As you may recall, Iridium is one of those companies
(along with competitors such as GlobalStar and ICO
Global Communications) that has lobbed dozens of
satellites into low-earth orbits in an attempt to create a
universally available cellular phone service. The idea
itself is splendid: Who wouldn't want to have a single
phone that could be used in any country, in any
location, without worrying about different cellular
systems, pricing plans, and the like?
But Iridium has fallen far short of its plans so far. It
only has 15,000 subscribers to date, so it's going to
have to do some pretty extraordinary marketing to
reach its stated goal of 150,000 subscribers by the
end of the year.
Give Iridium credit for trying. It's lowering its prices to
$1.50 a minute - a 65% reduction, if you can believe
that. And it's chopping the price of those luggable
phones by two-thirds as well, down to $1,000. [See
Iridium cuts prices, eyes smarter marketing, Network
World, 6/28/99 for more details]
But come on. $1,000 for a phone that doesn't even fit
in your pocket?
If Iridium's execs really want to succeed, they should
give the phones away: Buy a year's service, get a free
phone. It's not such a revolutionary concept - tons of
other communications providers use it all the time, and
quite successfully (who's ever actually bought a cable
TV box?).
Sure, there's a market for companies who send their
employees into remote locations halfway around the
world. But it's not really that big. To succeed, Iridium
has to appeal to the weekend warrior out on the boat,
climbing the mountain, paddling the river or driving
through the desert. And to do that, they've got to
make it a lot cheaper.
So while its new simplified pricing plans are a good
step, Iridium is going to take a few more steps, and
perhaps a leap or two, before it has any real impact
this time around.
For more in-depth analysis on this subject, check out
the report "Iridium Tries to Breath New Life into Its
Failing Business" in the Public Reports sections of the
Current Analysis site at www.currentanalysis.com.
Fred McClimans is
CEO of Current
Analysis, Inc., a
competitive
intelligence and
analysis firm. You
can link to the
Current Analysis
Web site or reach
Fred at fred@
currentanalysis. com
Reaction: Here's
what some Fusion
users are saying
about this article:
Too expensive in
general but invaluable
for remote locations
Rent them to
travellers via Travel
Agents
Iridium Article
Irridium phone booth
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