Dear Maurice,
You said "The price to the customer will be totally dependent on
what the customer is prepared to pay."
The assumption of your reasoning is wrong. I think it is better to say that "the customer is prepared to pay the perceived value" of a service or product. So, the high-income Iridium (or late Globalstar, for that purpose) customer - will he care about the price? No way. Does he know how much he pays per minute on his cellular phone? No he does not. I have myself asked this question to many people, both in Brazil and South America and North America and Europe. I lost the count on how many I have asked. Very seldom - and always telecom marketing people - knew what they were paying. Do you know by heart how much your minute costs? I bet you dont - most people parrot what they read in the newspaper or hear on TV.
I never use the phone in a plane - too expensive, I thought - and then I realized I was only parrotting - I did not KNOW. So I called my home for a few seconds ("Honey, I'm arriving in Sao Paulo, have to hang up. Bye" ) and it cost me US$ 10,32!!!. I am certainly gonna love to have an Iridium in September 98!! Will I buy Globalstar when it starts service in Brazil in the year 2000. Perhaps, if I perceive the value is higher than that of Iridium.... Would I change from Globalstar to a more expensive service? Yes, if the calls faded out too often (like cellulars do in Brazil) and that is unbearable even if they charge peanuts.
No, Maurice, its the perceived value that is important and not what the stock market skittishness thinks or feels The stock market buys profit, not service. Profit needs much more assurance than service. And perhaps Iridium is doing a poorer job than Globalstar when it gets to assurance. Perhaps that's what Irdf inherited from Mot culture ...
Iridium is going to be the Ferrari - premium car, premium service. Globalstar will be the KIA (Ok, ... a Volkswagen)- a car, and a service...Cheaper? Perhaps - and I mean perhaps - but how much will you want it? Which is the one you will always be wanting to have?
Which is the phone you will look at and say? WOW, he's got an IRIDIUM.
Wish you all a very very Merry X-mas! |
