RS, we are really only haggling over the details. We agree that Globalstar calls are bursty and that some are very high value, worth $1m a minute. But we can't segregate those calls - well, we can with Maurice's "CURRENT PRICE IS ...." handset price auction system for minutes to ensure no busy signals ever, even with totally full system all day every day.
So, dumping all minutes in a pool, which is what we are going to do, reducing their value to the lowest common denominator, which seems a silly way of marketing, but that's the idea for now and we're stuck with it, those minutes will have a value to the callers. To get those minutes sold, we sell them not at the average at which people would value those minutes, but at the lowest price to attract the last caller to make their call and that price sets the price for all.
Sure, there will be a bit of messing around with bulk minute plans and stuff like that to separate out the business callers a bit and stuff like that, but it won't change things much.
My argument is that Globalstar phone calls won't be as bursty as the time spent buying a new house, car, travelling on a plane or filling the tank with gas to use your example. They will be much more close to regular working hours value. I've made thousands of cellphone calls on business and for private matters and they were not particularly bursty, though the odd ones were.
Mostly those calls are more valuable than other activities, but not hugely so. Sometimes it was quicker, cheaper and generally better to just drive to the place I wanted to contact than take the trouble to make a call first [if they were only 15 minutes away and I was sure they'd want to see me anyway].
I too have no idea what the 'right' price for Globalstar minutes is. Neither does anyone. It is an infinitely variable fractalized value system out there for communications and we will only know the real value of the system which is built and can't be significantly changed when millions of people measure it up compared with what they think of their own needs, wants, or luxuries.
All I know, is that starting high and working down is likely to be a big mistake. Especially given the Iridium and ICO messes. I know that's how new notebook computers, cellphones, cars and other consumer electronics and most other new technologies are handled. They all have high marginal costs of production and limited production capacity.
Globalstar has done it the other way round. Vast, huge and perishable minutes in space are built all in one go! No production! So they have got to be sold. The Globalstar handsets are the item which might start high and come down in price and that is the way it should be. Some people think the handsets should be cheap and subsidized by minute prices. That is totally the wrong idea.
The handsets should be expensive and the minutes really cheap. That will get the incentives right, to Qualcomm, to the service providers, to the handset buyers [who will have a need for lots of minutes and will buy heaps if they are cheap enough].
The handsets should be sold off the end of the production lines direct to the highest bidder, arriving at their address next day [in the USA] ready to turn on! There is no need to take them to shops and put them in glass cases. This is a wide and thin market. It needs the Web to get the customers. The people who buy Globalstar phones will be Web users. Other than the village chiefs who will buy [or more likely lease to buy] fixed phones to rent service out to the tribe.
So, while I guess the right price is around $1 a minute for the first couple of years, to get there, we should start at 50c per minute, not $2 per minute.
It's obvious from Bernie Schwartz's comments posted a few posts ago and other things we see that Globalstar and Service Providers are starting to think along those lines.
We need a clamouring demand for Globalstar service.
Everyone forget about the Iridium idea that rich stupid people, whether business with bursty high value calls or private with $100 a glass champagne calls, will pay really high prices! They didn't and won't - not in sufficient numbers. We want 6m subscribers at least. We want 15m of them in 4 years. We want 30m of them in 7 years.
Build, build, build. Launch, launch, launch.
Get those ASICs fast, powerful and small. Get those data rates up. Shrink that handset. Shrivel that aerial.
Rah! Rah! Rah!
Maurice
PS: I agree with you on the negotiated discounts for big volume customers, but that all takes time as Iridium found. There is a limit to the value of negotiation. Businesses don't want to negotiate over toothpicks and while Globalstar handsets are going to be a lot more expensive than the toothpick bill, we need fast uptake so fairly fixed price plans and big demand will be the way to get it to happen pretty quickly. Since Airtouch has heaps of terrestrial customers, of course they have to sell individually to those businesses.
Gee they could have a lot of fun with this. Sales competitions in Airtouch USA should be fun when they get this going. They are going to know within two days whether they have got it right or not.
I think Globalstar has got it wrong keeping the sales figures secret. Part of the way to sell is to show how fast it's selling. Keeping minutes and handsets sold secret until March next year is like saying it's bound to be a failure. Shout the sales figures from the rooftops. That's all there is to talk about. Nothing else! If there's nothing to shout about, we want to know that anyway so we can start shouting. |
