To: tero kuittinen who wrote (12530 ) 5/11/2000 3:20:00 AM From: Maurice Winn Read Replies (1) | Respond to of 29986
Tero, This service can't depend on early adopters, high value-customers-first or other marketing tricks of the trade. We need bulk customers and we need them now. That means getting sales people lined up and distributors humming quickly and streamlined account application forms, preferably with phones being delivered by UPS 'next day' service, ready activated. From that Aviation Week commentary Message 13667184 [Mike Kerr being the responsible for making GlobalstarUSA a winner]: <...At a price of about $1,000, Kerr said he believes there will be plenty of customers for Globalstar phones, which initially sold for $1,499 to some early trial customers in January. "We don't have to get down to $499 to reach the level of customers we need to stay in business," he said. Some Globalstar dealers also are renting phones by the month, in addition to air-time charges, for customers who only need the global capability of the system for short periods of time, he said. > They are obviously hunting for the right price and sensibly offering leases to those who prefer to avoid a lump payment now. They are just now hiring sales managers, so they can't handle many thousands of enquiries anyway. So they need to lower the price carefully to get more customer enquiries as they can cope with more demands. But they need to keep right on going down until they are filling the constellation fast. To me, Kerr's comments indicate, when taken in conjunction with the fact that Globalstar LP didn't need to cut their wholesale prices, that Verizon [Vodafone] is very serious about making Globalstar work. They are not whining that they can only cut their retail prices if Globalstar gives away margin. If they did, then Bernard has quite rightly told them to go fix their business up and get selling. I believe that Chris Gent has instructed his Verizon world-wide business that they shall make Globalstar work and work well. Any one country would NOT want to be seen to be incapable of making Globalstar work. The crucial factor is demand. Market size at the sweet spot is going to determine Globalstar's share price in Feb2002. I bet it is huge and the price will be about 50c a minute retail, meaning wholesaler and retailer will both need to cut their minute prices. Some poor area Service Providers will need to sell minutes at lower prices to generate demand because there is limited battery and photovoltaic capacity on satellites and when a satellite goes over a poor place, any minutes unused will be wasted unless the satellite goes over a high-value zone a few minutes later where those minutes can be used. This is back to the original photovoltaics/fuel-cell/circuits/cooling balance at the start of this stream. That is a bit too detailed for most people just now as they worry more about actually selling anything than whether the satellite will overheat or get flat batteries after a very busy time over the USA or Australia. Call me a cock-eyed optimist. It worked for QUALCOMM. I do feel sorry for LeoBloom, selling stock at these prices. But I must admit, I have no idea where the price will be in 3 months. [The GGMDM nothwithstanding]. Maybe Leobloom will buy back at $4 in two weeks and I'll have egg on my face. The market is huge. We just need a round or two of price cuts to see when demand surges to satisfy that market. Just feeding your addiction. Maurice