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To: Dragonfly who wrote (2440)	4/2/1998 8:14:00 PM
From: JMD	Read Replies (2) \| Respond to of 10852

Dragonfly, first let me reiterate that I hope you make 30 bazillion dollars on your I. It will still piss me off that that implies that MOT is making money, but my personal joy for you will offset that, okay? So now, we're buds. You are of course right to point out that merely because Plant A has more capacity than Plant B, it does not logically follow that Plant A will make more money. A still has to sell its output at some price/volume as does B and until each does, their individual profitability cannot be compared. Further, if both plants are under capacity (because there is not enough demand for their combined output), then A's ability to pump out more widgets than B will be meaningless. That said however, I assume you are an investor in satellite telephony stocks because you think that there will be a fairly robust demand on the part of folks who want to chat on sat phones. And let me assume moreover that we both agree that 98.734% of all such chatters will not give a flying fig if their conversations get launched via GSM/TDMA/CDMA or smoke signal. Now, I build a steel mill and it can produce 100 tons/month of finished product and my cost to build the mill is a million bucks. You build a mill and it can ship 10 tons/month of finished product (which we assume is same-same, i.e. my steel is indistinguishable from your steel) and your cost to build your mill is one and a half million bucks. There are 3 potential outcomes. 1) total market demand is equal to or greater than 110 tons/month in which case we both run our mills flat out and sell at the same price per ton. We both make money, but I make more both absolutely (cause I'm selling 10X) and relatively (cause my cost basis is 2/3 of yours). 2) total market demand is zero in which case I lost a million and you lost a million and a half. 3) total market demand is more than 0 but less than 110 in which case we get in a price war. I can maintain my return on investment or profit margins depending on how you want to calculate it) one helluva lot easier than you can cuz my invested cost per ton of output is one million divided by one hundred tons (1,200 annually obviously) whereas your invested cost is . . . .well you can do the math. I tend to not get too excited about this stuff, but your last reply to me suggested that I, like Maurice, tended to be a little short on the FACT side of life. If you will kindly re-read my last post to you, you will note that I, very FACTUALLY, pointed out that I will cost TWO AND ONE HALF BILLION DOLLARS more than G* and pump out 1/10 the volume. I suggest that these are not trivial observations (see above for their impact), nor are they grandiose generalizations. $2.5 billion ain't what it used to be, but it's still not grocery money, even for the evil empire in Illinois (sorry, prejudices die hard). So, for me and my capital, the vote is for G* cause it's a winner in one, two, or three which is all there is, there ain't no more. Could you still make money in I? Absolutely, and now you see why I'm so Mother Teresa like in wishing I well: that means that demand is there up the ying-yang, and we're both gonna run flat out. No worries mate. Mike Doyle

To: Dragonfly who wrote (2440)	4/2/1998 8:14:00 PM
From: Dragonfly	Read Replies (1) \| Respond to of 10852

I think the implication that its some sort of a shady payoff is an example of the kind of biased view I find alarming in many of these threads. Another example is quoting $3,000 retail prices for I* handsets and $750 cost of manufacturing prices for G* handsets as if they are comparable. And then people turn around and compare the G* wholesale charge of $0.47 a minute to the $2.00+ RETAIL charge for I* minutes and say they are cheaper. I wonder if I* is that much more expensive when you add up the cost of all the groundstations, and other investments of the G* partners to the core $2.7B constellation cost? Consistently wholesale costs and prices are used when talking about G* and retail prices are used when talking about I*. Dragonfly