"Wingcast solution for GSTRF" - Gilder Technology Report
Published jointly by Gilder Publishing and Forbes Magazine
November 2000/Vol. V No. 11
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As for Globalstar, it also offers far more potential upside than is imagined by purblind commentators, such as Merrill Lynch’s Mark Nabi who has declared that “the
equity value of Globalstar shares is zero.” Soon enough the market will even realize that Irwin Jacobs and Bernard Schwartz are not so obtuse or vain that they will
allow this immense global asset to wither away merely because two old men cannot get their act together. They could solve the Globalstar problem overnight merely
by announcing the adoption of the system by Wingcast, the Qualcomm (QCOM)–Ford (F) partnership to supply wireless services to cars. At present, other
methods—such as OnStar used by twenty-nine General Motors (GM) models for global positioning and remote control services in case of accident, theft, lockout,
or illness—do not work when you move beyond cellular coverage. OnStar excels only in populated areas where communications are available, chiefly when you
don’t acutely need it. It lacks the global star.
Similarly, Wingcast will be a failure unless it offers the universal two way coverage that only Globalstar can enable at a reasonable price. By dedicating just 20
percent of its capacity and employing car antennas with double the gain of its handsets, Globalstar could even offer 3G vehicular services at some 153 kilobits per
second to millions of automobiles. Indeed, the same megabit-plus services to be made available in airplanes, as the Qualcomm-Globalstar InFlight system adopts
HDR, are technically feasible for buses, trains, boats, cruises, or automobiles.
As North American carriers debate whether to flee to GSM or CDMA from TDMA and EDGE, the CDMA movement needs Globalstar to maintain a competitive
global footprint.
Jacobs’ assurance that the Globalstar “system” will last “indefinitely into the future” will not help Qualcomm if he and Bernie stiff the existing Globalstar shareholders
and plunge the company into a briarpatch of bankruptcy litigation and scandal. With the junk bonds recently selling as low as a dime on the dollar, the company
remains financially vulnerable even as its technology becomes ever more valuable. This paradox cannot last forever.
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