Alan, that's pretty much what I've read. I would add that Rockwell is also considered a suitor. Most probably GMH will be split three ways, which may be why this deal is so hard to complete, not to mention GM's tax liabilities and Anti-Trust issues for Raytheon.
However, Ratheon is into auto parts quite heavily so they could leave the Delco side in the deal, but that's doubtful. Also DirectTV is already international if you count Mexico and Canada. There are also several deals in the works for Asia, namely Korea, Japan and I've heard rumors about China/Hong Kong.
The plus side for DirecTV is that the units are now quite cheap, GMH doesn't spend anything on these at all since they licensed their construction to those that can build home electronics better than GMH can. As you pointed out over 2 million units have been sold, GMH has stated for quite some time that 3 million subscribers would be break even which we should see in 1997 perhaps right after this Christmas.
What they need in my opinion is a dual transponder dish, for DirecTV and DirecPC in one dish. The DirectPC technology was picked as product of the year by several trade rags and highlighted at COMDEX. This could be a big advantage over other Direct competitors as well as a good source of revenue, not to mention the two year lead you pointed out.
Even if something drastic were to happen, i.e. DirecTV goes under, the DirecPC side has 400k download speed for Internet users today. Forget ISDN, Cable modems and all that other junk, this exists today and it works. With the equipment in the $300 range it's even cheaper in some cases. It's key advantage other than raw downstream speed, it's already available nationwide, no infrastructure (read wires) to install. Someone should advertise this product a little better, it's an incredible device, not some test market product for roll out in 98.
As usual, GMH has great technology, but we can't market worth beans. The old joke is the DOD wants to buy a jeep and we build a Cadillac, that became prophetically true when GM bought us (they do make Cadillac's) ;)
Good luck and Happy New Year!!! |
