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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 163.32

+2.3%

Nov 21 9:30 AM EST

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To: JGoren who wrote (30096)	5/15/1999 6:06:00 PM
From: Maurice Winn	Read Replies (2) of 152472

Iridium vs Globalstar JGoren, you said: "...I have been posting for months (Lor and G* threads) that the threat to G* is a restructuring-bankruptcy of I* by which its cost structure is reduced and it can compete favorably with G*..." True, Iridium will sell the minutes at a cheap rate after they give in and face the facts, as Globalstar must too, that it is the customers who set the price. If Globalstar doesn't cut the price, then 10 billion minutes will rot in space in the first year. Iridium has about 1.5bn minutes per year to sell, so even if they give the minutes away they won't have a significant impact on Globalstar. Iridium will NOT be producing any more minutes after this constellation. Once the existing ones are sold, that's it forever for them. 1.5bn minutes is a drop in the ocean. Globalstar will have 10 - 12 bn to sell [not that they are planning to actually sell many of them]. ICO will have about 15 bn. There are others too. So Iridium is trivial in the big scheme of things. Maybe they'll slash their prices to 20c next week to really get things moving which will at least give Globalstar some idea on price-elasticity of demand before Globalstar mimics the Iridium 'high-priced rotten tomato' model for selling Globalstar. Iridium is no longer [and never really was] a competitive threat to Globalstar. They might not even sell their existing 1.5bn minutes. Not many people will spend $3000 on a handset to then be told the system is being closed down. The operating costs alone might exceed the possible revenue, even if Motorola reduces their exorbitant charges, in which case it will be shut down totally. Iridium is now a historical curiosity of the space, telecommunications and Web age, suitable for Tom Brush to adopt as a business case study. Mqurice [They've had their hayday]

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