I am not trying to rain on the parade, but the following was my experience/observation today posted on the GTR board:
BTW, I am very long LOR.
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posted: 03/08/2000 03:09:55 PM -- read 867 times, 9 replies
author: Bob G. <rgarrasi@hotmail.com>
subject: G* - Not Good News - IMHO
OK. Just got off the phone with the Vodaphone/G* marketing guy, Andy Radlow. It's my understanding now that Vphone has the exclusive USA distribution and air rights to G*. My question to him was where did they get the $1,495 price point for the QCOM phone.
He said -
1. They polled their distributors and that's the number they came up with. (he was very defensive)
2. They think that the phone is cheap compared to the $3k Iridium phone. (Gollleee, Sgt. Carter)
3. The phone is your basic QCOM 860 with satellite guts.
4. The phone and service is NOT FOR THE MASSES. It is for BUSINESS use, and as such, it is very cheap (he says).
5. As time goes by, pricing should eventually come down, so eventually the masses of the unserviced and unwashed will have an opportunity to buy the phone and subscribe.
6. They believe that they are on target with their share of the 500k units Bernie spoke about on CNBC. He refused to say what percentage is business, govt, individuals.
7. All the above with a very arrogant and dismissive demeanor.
You can call him yourself and leave your telephone number on his numeric pager (they won't give out his direct phone number). His pager number is 925-947-9687. He returned my call quickly.
You know, folks, I was going to take a position in GSTRF later this week, but will now pass. Even though I believe that they have the science end of the deal right. I just don't think that these guys are going to be able to execute.
Unless my memory fails me, GG has always alluded to G* in his posts as bringing telephone service to the 70% of the earth's population which does not have phone service. The villagers in Outer Mongolia and on the Indian Subcontinent, etc., etc. Ken Ehrhart even mentioned the strong correlation he found between access to telecommunications and wealth building.
To me, that basically has been the story and the reason for investing in this company. But that apparently is not what G* has planned. Seems to me that they are planning to go down the same path as Iridium. Not that they shouldn't go after the business/govt sector first, but it just seems to me that Henry Ford proved their high ticket approach wrong 80+ years ago. Unfortunately, this marketing kid Andy Radlow may never have heard of Henry Ford. And it is the Henry Ford pricing model that George is always pounding the table about...price elasticity...rapidly falling prices are the plan, etc., etc. ...except for G* I guess.
Perhaps G* is the real jewel that McCaw has his eye on, and will pick it up for a fraction of today's share price somewhere down the road.
Having said that, I'm outta here.
Bob G.
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