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

To: djane who wrote (3015)	2/19/1999 11:54:00 PM
From: Maurice Winn	Read Replies (3) \| Respond to of 29987

What about Globalstar then? The simple market reaction has been "Heck, Iridium is in big trouble so Globalstar is too." No worries folks. This is all just confirmation of what Globalstar designers thought in the first place. Namely, costs matter and total coverage with space switching doesn't. Call quality matters and technology pathways to the future matter. There never was going to be the huge demand so that anyone who contrived to shoot some kind of satellite up was going to get rich. The geos are cheap but have rotten quality. Others such as Inmarsat have got their design and pricing wrong. An equatorial service is a good half-way house, but not good enough. Globalstar has got the right combination to have wild success. Expect big demand [assuming Globalstar figures things out and learns from Iridium - sell the handsets dear and the minutes cheap until the system is full]. While [if true] the Iridium failure to sell is a surprise, this is not bad news for Globalstar. It would be nicer for Globalstar if demand for Iridium was wild because it would mean higher margins and demand for Globalstar initially. Which would mean an early second constellation and erosion of competitor business. But there are competitive advantages to Globalstar with these problems. Competing satellite services can forget about raising money to design and launch service. The advantage of Globalstar will be apparent early on and Globalstar will be the one to go on to form second and third constellations while Iridium and other plans will be shelved. Globalstar's technological upgrade pathways are clear and later service will be cheaper, better, with smaller handsets, longer battery life, better WWeb connection and more profitable. Iridium potential customers will be interested in waiting for Globalstar service [just a few months away now assuming we don't get a lot more failures] and Iridium is advertising heaps which will help Globalstar since people will be somewhat familiar with the satellite. Since people will be hearing about Iridium problems, they'll be more inclined to wait for Globalstar service rather than buy a handset which might be problematic and expensive. It's better that competitors cancel their planned systems now than go through the capital destruction process of building networks which are doomed to be uncompetitive. That is good for Globalstar, prospective shareholders of competing LEOs and good for subscribers. Failure of businesses is bad. So let's hope Iridium gets enough customers to justify the cost of the constellation, but not enough that they get tempted to build another network. That will mean the market worked out just right and Globalstar 'hit the sweet spot' on technological development and market timing and there was not too much capital destruction around the world. In case that is confusing, it means Globalstar shareholders need have no worries although Iridium is in trouble. Jack, I just read your last post: //Save the gloating, Maurice; it reminds me of the saying, "Pride goeth before the fall...etc." I should really gloat now. I've already counted my chickens. If I don't gloat now and get my chickens counted I might never get to do it! It would be funny if Globalstar was a lemon too and these satellites were all flying around earth doing nothing. At least the Iridium flashes would be interesting [or a pain if you are an astronomer]. Thanks for the pointers on demand - if Motorola has really produced that many handsets and they are sitting rotting somewhere, I am very glad to be a Globalstar shareholder and not Iridium. As you say, dumping a whole lot of Kyocera handsets in the shops too isn't going to help. Maurice Comments on 'winners of the 21st century' here: Message 7924831