RS and All--On potential market size--I was going to do some Loral investigation,
but thought this might be a better use of my time. The numbers give
an order of magnitude feel for where the market is.
From previous information, the worldwide total subscribers needed to fund
next generation sats is 1 million.
First, a wild-ass-guess: The US represents a quarter of the world market.
(I think it is less than that. The more cellular developed areas are less
likely targets. Greatest penetration will occur where there is less
cellular buildout, i.e., in Africa, Latin America, Asia and Australia).
Therefore, the number of subscribers needed in the US is 250,000.
Portions of the potential market in the US, from the US Statistical
Abstract. Most data is for 1996:
Establishments Employees
-------------- ---------
Water transport 8,147 171K
Freight 836 37K
Passenger 1,033 23K
Marinas 3,348 18K
Tows/Tugs 941 25K
Air Transport 707K
Air Couriers 2,639 99K
Non-Scheduled 1,791 23K
Air Terminal 3,252 80K
Gen'l Aviation Aircraft 187K
Pilot Certificates 622K
World Merchant Fleets 26,858
U.S. 495
Panama 3,998
Liberia 1,587
Employed
Transport 5,389
Truck Drivers 3,075
Farm Operators, Managers 1,317
Forestry and Logging 108
Local Trucking payrolls $10,701MM
Not Local Trucking payrolls 28,161
Local trucking, with storage 1,681
Courier services 8,889
Mining, Total Employees 574
Insurance Agents 724
Families over $75,000 income (1996) 20% of 70MM
Median Income, all families: 42,300
Earnings, top 20% of households: 46.8% of total income
Earnings, top 5% of households: 20% of total income
Total household income: $3,000,000,000,000
Households in top 5%: 3,500,000
Mean income, top 5% of households: $171,428.
Households with income above $171,000: 1.75 Million
Comments:
1. The "vertical industries" are very small. They are not central.
2. A guess still needs to be made on the marine use. 18,000 marinas suggests
(what?) almost a million boats requiring a marina, at 55 boats per
marina (my w.a.g.). A lot of those would be oceangoing boats that would
regularly be outside of cellular range.
3. The utility of the phones in general aviation aircraft is open.
I am not aware that a kit is being prepared, although I presume a car kit
would be easily adaptable. Is it legal for general aviation aircraft to
carry phones that will connect to the terrestrial network? If so, the
187,000 general aviation planes might provide a significant part of the
critical mass needed--although their MOU per unit would be low.
4. 3 million truck drivers! That is a lot of potential customers.
The only breakdown of local versus long haul is by salary, which suggests
that 3/4 of trucking is non-local, and therefore a relevant market.
No wonder Irwin seems so sanguine that the critical mass can be reached!
(Remember, Omnitracs is already carried by 300,000 trucks).
5. 1.3 million "farm owners, operators". This is distinct from farm workers.
This suggests there are over a million separate farms in the US. A lot of
American farms are out of reach of cellular. Those farms would be
likely prospects for multiple phones, imo.
6. Travelling Salesmen: No estimate was found for this category,
the person who travels by car around a wide area visiting clients
and prospects, sometimes out of cellular range. There are roughly 12,000
insurance agencies in the US (this statistic from memory). These will
typically have more than one person on the road. Every industry has
salesmen on this routine, I believe. These are the people, rather than
the international traveller, who might quickly get in the habit of
using their G* car kit.
7. Rich dilettantes (well, they aren't all dilettantes): 1,750,000.
The top 2.5% of the population might be considered relatively
indifferent to the cost. Some of these will not fit into any of the
target categories above, but will want to buy a phone to show off
(or use). I do not consider this group a key initial market, because the
MOU's will be low for the limited number of phones available.
That's it. I have missed a lot of the targets we have identified as
potential users, but I believe that any reasonable penetration
in these areas will lead to success.
Best,
JS
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