< I'll go on record by predicting 50K (Fifty Thousand) TOTAL subscribers max by this time next year on the Globalstar system. In love with the vision and technology, but dubious on the business case,
Geoff Goodfellow
Prague, CZ
11-Oct-99.>
Well, there goes the neighbourhood! After reading today's 'discussion', I figure that we are now entering the bottom of the upward curve which should look something like QUALCOMM's.
Several months ago, George Gilder caused a 'head fake' zoom upwards as hundreds [or thousands] of acolytes bought Globalstar stock with little thought or understanding. The long, slow, careful, cautious and torturous rollout has panicked many and with the Nasdaq taking a dive, caused an amazing buying opportunity; now gone.
Globalstar is now at the 'customers are actually buying a real product and doing it in quantity' stage. Sure, it'll be until the end of this year before things settle down, with most gateways operating and most countries covered, but handsets, gateways, roaming, licenses etc are pretty much all settling into place, month by month.
The big question is where will the retail prices 'stick' so that handset supply and demand are in balance. At present there is handset overcapacity. Soon, that will go into shortage. Then the fun will begun. While I've been a proponent of low prices to get things going, I suppose the Vodafone's of the world are simply unable to train enough people and get things working smoothly to take a sudden onslaught of customers, so they started their minute prices high and work their way down as they can handle demand.
While I'm of the Feral Marketing school, where you get up early in the morning and go like hell while such a huge opportunity is sitting there, I know I'm one of few, so the Vodafone people yawn their way to work and leave early for the weekend. So, motivating that mob wouldn't be easy [well, it is, but that's not how it happens]. So, we wait for them to lumber into gear. But they will.
Meanwhile Geoff, I think your prediction of 50K total subs by 11 Oct 2000 is going to miss by a country mile. That is still May, June, July, August and September away. 5 months. My guess by then is about, umm, let's see, say 141,592 [that's at 5pm, NZ time, Wednesday 11 October 2000].
There are three handset suppliers, all now in production [though I bet Telit outsells Ericy by a lot because of the rotten battery life for the Ericy handset]. QUALCOMM can produce 14,000 a month [though they haven't had orders for that many as far as I know]. Ericy and Telit I suppose will be able to produce similar numbers, so capacity would now be around 50,000 a month. So the question is how many orders from new subscribers [I'm just counting the portables whereas the fixed units will sell a lot more minutes]?
Australia, USA, China, Russia, Europe, Canada, Brazil have got a lot of people and a lot of places where Globalstar will be the best option. The other satellite phones won't be competitive.
On reflection, we don't yet have the momo crowd in this stream, but no longer is it just the technical and fundamental people [technical in the true sense, not the silly chicken entrails trading patterns sense]. Now there are some shorts. Cool! They should be able to show why Globalstar won't succeed. I haven't seen any reason yet why it won't [apart from bald assertion about cash flow and slow sales for the next year]. Valueman gave the best reasons [including the cash flow issue, which I agree with but don't think it's enough to worry about].
Meanwhile, nobody has commented on the nice, new, up to date heading for this stream.
Maurice
PS: Maybe it's time to start multiple Globalstar streams such as 'Write what you like' so people can insult ignorant shorts, and shorts can tell people not to crap their shorts. It's fun seeing the raving starting - it means things are finally heating up for real. Come in Gregory Mullineaux!! My Tonka Truck is full. I hereby predict that QUALCOMM and Globalstar will both be at $1000 a share [no splits allowed] Feb 2004. That's a GSTRF 100 bagger from the recent lows! There is the usual double your money back guarantee on that...send your cheques to my usual Eketahuna address. Graviton Spin Reversal Systems stock still available too...
Incidentally, I'm a little disappointed at how few people take up my double your money back guarantees. It's not really fair for you all to just make a fortune on my excellent prognostications and not pay that fee. Maybe I should publish a newsletter like George Gilder...yeah, send money for that! |
