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

To: Drew Williams who wrote (3191)	2/27/1999 8:57:00 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 29987

Drew, giving away the razor and selling the blades will work for some people in the Globalstar case. But unfortunately, the blades are all in stock waiting to be sold and if not sold immediately they rust away and we never get any money for them. So we have a mountain of blades to sell in a short time. If we don't get people using them soon, they won't use the Y2K minutes either. Or the 2001 start of the millennium minutes. Or the 2002 minutes! Mostly, these 12bn minutes per year are going to have to be sold cheaply to get the system going. That will put huge pressure on handset production capacity as the producers run 24 hours a day to try to make as much money as they can to produce handsets for the clamouring mobs who will want access to bargain minutes. By the way, it is so much fun to have people interested in the price of the services after years of lolling around trying to decide whether to charge $2 a minute or match Iridium at $5 per minute. We are in the nitty gritty now and customers like to know about $$$$s. They want bargains. If they don't get high quality and great value, they don't come crowding in the door. We have 1bn minutes a month to sell starting in September. We need a mad scramble of customers to make it all happen. While there will be some customers who will like a deal where they get a Globalstar handset for free, then pay $1 per minute, with a minimum per month use of 200 minutes, I believe most would rather pay the market price for the handset and the market price for the minute. That would mean [for a year] a handset price of maybe $3000 and a zero minute charge for the Globalstar part of the call. With the market rates, the handset providers would make a lot more money and the system would fill quickly, so Globalstar would make more money - but not for the first couple of years. If the handset prices were getting up to $5000, I suppose it might be wise to start charging a bit for the minutes to try to quench the handset demand because even at $10,000 per handset, handset production increases would be limited somewhat. If handset prices were too high, it would just mean that the handset providers were making more than their share. They need a big incentive to go berserk producing handsets, but they don't need to be paid a fortune. It's good that there is competition in the handset business, because it means that if Qualcomm is slow getting production capacity ramped up, then Ericy and Telital will do so if they are making $5000 profit per handset. People will buy the GSM model to use in cdmaOne areas just to get access to a Globalstar handset. They'll separately buy a cdmaOne ThinPhone to cover their terrestrial needs. That gives huge incentive to the three producers to ensure they get their share of the handset market in the early stages when the huge profits will accrue. In later years, the handset business will revert to very profitable but at much lower prices as the minute prices ramp up. That's my theory anyway. Let's not charge too much for the razor blades or we won't be able to give away the handsets. Then the minutes will rot in the sky and the constellation will die from lack of interest. Maurice PS: Once the first year is sorted out and handsets are being produced flat out, we can get to the nitty gritty of "Current Price is...." displays on handsets to manage peak demand. I wonder if a few more people are starting to think that isn't such a bad idea after all. They'll have been softened up by the current shambles in Iridium and panic over Globalstar with pricing top of the pops. We might even get some answers, at last, about whether the constellation is circuit, photovoltaic or fuel cell capacity limited. It probably varies during the year. When a satellite is edge on, it will spend a lot of time in darkness, so will be photovoltaic limited. When in 'summer' with full frontal exposure to the sun, it will be fuel cell limited. When passing over China [or USA when Mark McGuire scores a touchdown], it will be circuit limited. The way to manage those peaks and troughs is "CURRENT PRICE IS...." instantaneous p-----g.