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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (7677)	8/24/2001 6:07:03 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

CB, anyone can, without reasoning, facts or understanding or based on the flimsiest of such, "warn" people. You offered nothing of value. Anyone who was sentient could see that because Iridium didn't sell at high prices, Globalstar would have big trouble doing the same. Everybody knew that Inmarsat and competing services existed and that Globalstar would have to do better in ways that mattered to customers. The single reason Globalstar failed as a business [it has not yet failed as a system and probably will not fail even in terms of capital invested in the system though the original owners of that capital will not be the ones to benefit] was that the service providers did not test price elasticity in the beginning by starting with high demand and reducing it. They operate on the mantra "You can't raise prices". They are wrong. You did not identify that fault and that was the single fault which caused the failure. I pointed out in 1998 [and 1997] that they would fail if they did not get the price right [meaning cheap] and am amused by Johny-come-latelies who didn't understand the situation and made a lucky guess, for the wrong reasons. Chimps can do that. You didn't answer any of my arguments about 'lock', 'Inmarsat first to market' etc... I understand that you wouldn't because you couldn't. Do not expect me to say "Aw shucks, I guess you were right". Because you weren't. You were wrong about what the problems were. So was nearly everyone else. I will repeat so it's easy to get. Globalstar failed because they didn't test minute and handset price elasticity starting with high demand and cheap prices. They didn't lower minute prices rapidly when they realized demand was slow. It turns out they were so incompetent, arrogant and full of hubris that they didn't listen to the sales people feedback that minute prices were too high. Incredible but true. You didn't point out that fault. I did not understand the metaphysical certitude that they would rather fail than change their marketing when they couldn't sell it at their initial high prices. That was my failing = assuming more intelligence and responsiveness than they had. Jay probably has a saying: "Before the correct strategy, all other options will be attempted". I am delighted to see Uncle Al getting things right. The unenlightened want him sacked. They should go and work for Globalstar, Iridium, or the dot.coms. They are about as enlightened. Meanwhile, a small wall of money went stampeding into [and, as I always like to point out, out of] the stockmarket today. Uncle Al has told them not to try to hide in the US$. They are scuttling like crabs from under a rock which has just been lifted. I expect there will be no more interest rate cuts. I would not be surprised if we have seen the bottom. Once sentiment turns, it can happen quickly. What's really nice is that Uncle Al has still got interest rates at a reasonable level = not really low as in Japan. BUT, be warned, they will have to rise again and while stockmarkets will loft ever higher, the irrational exuberance of 1998 and 1999 and into Y2K will not be back in a hurry. Okay, that's my rant for the day. Mqurice