Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: Jim Parkinson who wrote (6232)	7/29/1999 8:37:00 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 29987

Who gets the handsets? Jim, from Airtouch's point of view, it doesn't really matter whether they make profit from selling the handset at a high margin, selling terrestrial minutes as a result of extra customers buying Globalstar handsets or selling Globalstar minutes as long as they maximize their profit. So, they might sell a handset for $3000 with no guarantee of any G* minutes being used and maybe no terrestrial minutes either. As a security-only item for example. That would give them a big profit. They might offer another pricing plan of $1000 handset and minimum $100 per month for 100 minutes and extra minutes to cost $1.50. Or, a free handset, monthly payment of $300 for 200 minutes etc... The priority for Satphone callers will probably be only 'right of first refusal' of whatever plans are offered. It'll be interesting to see what offers Airtouch makes. We hear what amazing marketers they are so it should be really great. So far, from what we hear about the Satphone early bird line, the competition for "Most Amazing Marketer" can't be too serious. Globalstar wants minutes sold. Airtouch shouldn't care whether handsets, terrestrial minutes or Globalstar minutes provide the profits. Their interests are not in harmony. If anyone can explain why Airtouch wants to make $1 a minute profit from a Globalstar minute but only 10c per minute from a terrestrial minute I'm interested in how that makes sense. All I can think is that they genuinely think they can sell all the handsets that can be made at a big profit and sell the minutes with them at $1.50. But again, how come they aren't trying to corner the market on handsets if that is true? If it is true, Globalstar is going to make a vast pile of profit in a very short time. I don't believe it. I think they should sell the Globalstar minutes at the same profit margin as they get from terrestrial because the company that moves the minutes in the early days will make the money in the long run as demand builds and competition for minutes increases. There are a lot of them, but not an infinite supply. The more Globalstar minutes they sell, the more terrestrial minutes they'll sell. Airtouch has done the market research. Let's hope they have got it right. They surely can't be as bad as Iridium in their market research? Drew, any comment? Maurice