Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Maurice Winn who wrote (3524)	3/20/1999 7:35:00 PM
From: Oliver Schonrock	Read Replies (3) \| Respond to of 29987

* Pricing Maurice I have taken it upon myself to argue some points to try to create some balance to what I must say is a very entertaining, and mostly correct, case you have presented on your favourite topic. Firstly: Marketing This airy fairy, b...s..t discipline is just that, I agree, but it is the source of success of the worlds biggest company (dare I mention the evil name M..s..t). Their products were never that shit hot, and never innovative, nor was their pricing the key, they just marketed and sold their stuff really well. Marketing is also alive and well in the wireless industry, it just looks a bit different. What is Caller-ID, really? It is zero cost b...s..t "value added" service that gives the user something to play with, while he is going about using his phone for making and receiving calls. What does it cost the SP? Approximately 10^-78 cents/call I think? This is marketing isn't it. And they will cotinue to come up with new "hair-brained" pricing-schemes and services and will suck more "stupid" users into paying whatever more for one service than another. Is there anyone else out there that has been a Sales Rep? I was one just a few years ago and the number one rule is: "at least fifty percent of the time, customers will make their purchasing decisions, based on non-rational, emotional, personal, or whatever reasons other than the real issues". This is where marketing and sales, can really have an effect. I think your philosophy gives the consumer far too much credit for being a rational being (!), present company excluded of course! This brings me to P......g, assuming (!!) that we catch one of those wonderfully educated and rational beings and put them on a leash so they can't get away, we can do some experiments on them. Here he is with his Vodaphone powered Nokia 6110 (no G sorry, just to keep it simple). He want to make a call and the screen says $7.00/min. Sh...t he says, that's so expensive, but damn it, I really need to make that call, and so he does. This happens to him a few times and then he gets a few good rates and on goes the story. The whole time he is wondering whether he is actually getting a good deal or whether he is subsidising Vodaphone for their inadequate network capacity. So he approaches The "Other" GSM SP in his town (hopefully one exists, I know there's none in my home town)........ Now the b..s..t really starts: "Well sir, given the statistical (!) anyalsis of your call frequency, length and times, and given that you are male, under 150 lbs and your wife has blond hair, we can very accurately predict that your average call cost with us would be much lower than with Vodaphone.".........I don't think I need to continue here as you can see the disaster coming. The only real way would be for at least 3 SP, offering the "same" (and I am sure the marketing guys will have a word or two to say about that little statement) service to all agree to dynamically list their respective call costs on the users phone and he makes his pick at the time and for each call. Then he gets three bills (but, but the marketing guy says, our payment options and the way we print our bills is so much better than XYZ SP!!) Anyway, my point is: Listing call cost on the screen: Only of benefit if there is competition and that is such an incredibly difficult and political (oh no don't go there) task that it'll be a while yet! Even when we are there, marketing will continue to be one of those leachy (lawyer like, but no offence to anyone) disciplines that man-kind has created and now he has to live with them. Regards Oliver

To: Maurice Winn who wrote (3524)	3/20/1999 8:49:00 PM
From: djane	Respond to of 29987

tero analysis of I* problems (via I* thread) Talk : Communications : IRID - Iridium World Communications IPO Announced! \| Previous \| Next \| Respond \| To: Jack Morgan (1461 ) From: tero kuittinen Saturday, Mar 20 1999 10:27AM ET Reply # of 1467 I'm not sure it's only about marketing and execution. It looks like Motorola never made a serious attempt to find out what the actual target consumer group would be. The best marketing and execution don't produce results if there is no actual demand for the product. There apparently was no serious re-evaluation of Iridium project prompted by the unexpected explosion in digital phone network expansion and the big gains made in making these handsets small and inexpensive. The whole Iridium project implicitly assumed that digital handsets would remain big, clumsy and expensive, just the way they were in early Nineties. When the marketplace underwent a sea change, Iridium project just went on, despite the changed competitive environment. It was a measure of Motorola's self-confidence that they picked Kyocera as their handset partner. Apparently they did not want serious competition in selling Iridium handsets that a first class manufacturer like Sony or Matsushita might have provided. They got what they asked for. This looks somewhat like Motorola's paging business - the new two-way pagers are great, but paging as an industry has no future. It will be rendered obsolete by small, cheap phones that can do everything that pagers can do - and a lot more besides. Iridium is facing a tough situation. Either they introduce a new class of handsets that weigh 50% less and cost half as much to compete with Globalstar and land-based worldphones debuting next winter. Or they try to keep selling the current mammoths. Either option does not look too appetizing. Usually producing a new class of handsets that represent a big leap in miniaturization is very expensive - that's why Motorola is asking for a stiff premium for their new 83 gram GSM V3688 phones. How can they execute an expensive redesign of their current Iridium models while simultaneously slashing the price? It just doesn't add up. The only business sense Iridium made was the assumption that they would be able to sign up so many customers that they would have a big edge over Globalstar and worldphones before they arrived - this could have bankrolled big investments in new, more competitive handsets. That scenario now looks very unlikely. The word-of-mouth on Iridium here in Europe is lethal - people are saying that the phones can't cut through even tree foliage, much less roofs of cars and buildings. Which means that you have to sleep out in the open or keep your phone in your balcony to be able to receive calls. I don't know how much of this is true, because nobody I know has even tried the model. At CeBIT nobody talked about Iridium. I don't think another massive ad campaign will do much good. I guess the point is this - sometimes it makes sense to cut your losses and dump an investment that is starting to look iffy. At least you then get a chance to recoup the money in some other company. There is a chance of an Iridium rebound - but the risks now look a lot bigger than three months ago. I don't think Motorola can afford to pump much money in this project; they are already overextended in trying to keep iDEN alive, turning around their troubled mobile network division, figuring out what to do with paging, completing the CDMA handset strategy that is 12-16 months late, creating third generation digital phone technology, trying to overcome the 6 month lead their competition has in internet phones, etc. If Iridium was the major focus of Motorola, it might have a shot at a come-back. But Motorola has other commitments that can't take a backseat. Tero