Larry, hello! Yes, this stream is in need of information, thinking and different points of view. Thanks for yours. First post?
Motorola as King? Not to be underestimated? Well, they are in some disarray having lost hugely in handset market share recently, so they can certainly get things wrong from a position of strength. That is a characteristic of people. Qualcomm will not be immune to it either and about a year ago, I predicted their decline due to hubris in about 10 or 15 years when the creative, energetic, visionary old guard have gone. Sure, people will think they are working hard and all that, but they will be like IBM in the early 80s, believing they were King. Maybe they will avoid the trap, but it is difficult.
So Motorola shouldn't be underestimated, but their Kingship confers no special power. All that matters is the strength of their Iridium ideas.
While they emphasize business information, voice will certainly be a part of the new CDMA Motorola system and it will certainly be better and cheaper than the Iridium system for voice and data. Iridium doesn't have special strength in voice, it is more that its weakness is data [as well as satellite switching and other aspects].
Yes, they did not increase their loan guarantees to $1.1 bn to see that go down the drain. But if they can get public subscription of $200 million, that will keep them going for a while longer without putting the $1.1 bn at risk. The $1.1 bn is only at risk if the loans are made. The $1.1 bn will be in part to give confidence to the IPO buyers - "Look, Motorola is putting their money up, let's be in!" I also have no doubt that Motorola intends Iridium to succeed - they are not thinking of a failure, but I bet they are not thinking it is as good as it initially looked and they are minimizing their risk.
Beta vs VHS? Quincy explained some detail on the engineering. Beta vs VHS is usually an argument that superior marketing is more important than technical performance. That is only partly true and what matters is the summation of effects and benefits that a potential consumer sees. When people sell something, they are doing much more than selling an object with function. They are inviting somebody to join with them in a sense of self with the object as the focal point. That's why "good" salesmen do so much better than others. This is a very holistic and existential approach to whether Beta or VHS is "better", but I think it is a more accurate way of looking at consumers than simply the marketing or the engineering ideas.
For example, have you noticed a "Swoosh" is a very popular emblem these days? Is it technically superior to a Swaztika? Which has superior features? It is purely expression of a sense of self and each individual is moved by the summation of their experiences to "choose" their consumer product.
I believe "Globalstar" is more akin to a Swoosh, while "Iridium", the element in the geological layer recording the extinction of the dinosaurs, is more akin to the Swaztika. But neither the people wearing the Swaztika nor those who flew off to Hale Bopp wearing he Swoosh did very well! So the analogy is looking a bit unsettling at this stage.
Anyway, my point is that I don't think the VHS/Beta ideas have much relationship to Globalstar/Iridium. Maybe B-CDMA vs W-CDMA is a better example for that idea - the race is certainly on there! Whose standard will end up most popular? It wouldn't pay to be second to market there! Because W-CDMA-One has all the IS-95 underpinning, it seems to have the advantage. But it better not muck about getting to the customers. Motorola will certainly want to choose the right CDMA for its new satellite system. They will choose W-CDMA-One which Lucent, Motorola, Qualcomm and Nortel are promulgating.
You asked about land charges for Globalstar. Yes, there will be land line charges in addition to whatever the local retailer charges for Globalstar minutes. Usually, people would just use the local cellular service as they do now, at their current prices. It would only be when there is no terrestrial service that the handset would search for a Globalstar link. Subscribers will not be using Gobalstar and a cellular service simultaneously.
I don't think $2bn bottom line is excessive. Sure that is a very good rate of return, which is why I have invested in Globalstar. As well as wanting to see the satellites flying, shrinking the world, sending us flying into the next millenium instead of grubbing around in the dirt of the 20th century. I imagine my children walking along anywhere, or sitting in a boat out on an ocean and having them able to cheaply and clearly say "Hey Dad!" and I'm always there.
While you might be at a loss for any companies turning 67% net profit, some company has to be simply the best. Why not Globalstar? You answer the question though: "Personally, I think that both will be big winners in any case because of the huge demand". My sentiments too. Iridium will probably make some money, but because Globalstar has such low costs, they will make huge heaps. Lead times are long, demand is huge, economies are booming. Subscribers will tune in by the million. What self-respecting hot-shot executive is going to want a terrestrial only system? Ha! Status symbol of the new millenium - a Globalstar phone. The service will need to be allocated by price due to excessive demand. That means big profits and lots of new Globalstar satellites being sent up as fast as they can make rockets!
Iridium is inherently expensive because they use satellites for carrying the signals which reduces the number of subscribers they can support. The capital cost is therefore spread over fewer subscribers. Iridium's satellite life is shorter, so depreciation costs are higher!
Maurice
[PS: What is Intel?] |
