[extropy-chat] Slashdot draft: Prediction markets and spacedevelopment

Mike Lorrey mlorrey at yahoo.com
Tue Jun 14 17:34:20 UTC 2005


--- giorgio gaviraghi <giogavir at yahoo.it> wrote:

> I don't believe that Iridium failure is due to the
> dotcom bust
> iridium is a portable global telephone system based on
> multiple satellites covering the entire world
> nothing to do with internet
> What happened was that iridium was the wrong answer to
> a requested need
> Wrong product, bulky and heavy compared to cell phones
> wrong costs
> around 5$ per minute OF CONVERSATION
> wrong market approach
> with the exception of deserts and middle of oceans the
> entire world was accessible by non iridium comsat cell
> phones so that left a minor customer base
> in the end a wrong business plan that is taught in
> business schools as a negative example similar to the
> EDSEL
> it was obsolete by the time it became operational
> that's one of the main problems of space business,
> same thing happened with most space manufacturing
> activities, it was possible to make them better and
> much more economically on Earth

http://www.iridium.com/product/iri_product-detail.asp?productid=446&method=specification

No larger than a home cordless phone:

9505 Portable Satellite Phone
Specifications
 Basics  
 Dimensions 158L x 62W x 59D mm 
 Volume Under 375cc (22.9 ci) 
 Weight Under 375g (13.2 ounces) 
 Battery 
 
 Continuous Talk Time Up to 2.4 hrs (Standard)/ 3.2 hrs (High
   Capacity)/Up to 9 hrs* (Extended Lithium Ion) 
 Standby Time Up to 24 hrs (Standard)/ 30 hrs (High Capacity)/
   80hrs* (Extended Lithium Ion) 
 Fast Charging Time Up to 2.5 hrs (Standard) 

Frankly I find the puny cellphones of today to be little girls toys.
They are too easy to lose, drop, etc. and the buttons are frequently
too small and crowded. Iridium phones are, in fact, lighter and smaller
than other satellite phones, which need to reach geosynch satellites,
versus iridiums LEO satellites.

Apparently the DoD agrees. The UN and the DoD are the biggest Iridium
customers. Customer growth was 44% in 2003, and 17% in 2004. The UK
MoD, many state and provincial law enforcement and other agencies have
these phones, while Iridium has expanded into data and SMS services.
The FCC expanded their frequency range in 2004 to meet increasing
demand.

Iridium, LLC's advantages are that its current costs are fixed, as its
global infrastructure is in place (the 44 satellite constellation) and
they have 13 spare satellites in orbit. This constellation is
considered self-sufficient until 2014 without any new satellites.

Current growth rates are considered sufficient to self-fund any future
satellite replacements. As of July 2004, there were 100,000 subscribers
with growth rates in the 2,000-3,000 per month range since relaunch in
2001.

Iridium, Inc., the original, now defunct, corporation founded by
Motorola may have had a bad business model: it was financing its
entirely global infrastructure before having a single paying customer,
and expected cellular phone rates to remain in the $0.30-0.50/minute
range. The capital costs were enormous. Iridium, LLC picked up the
assets of the company for about $50 million, despite the invested cost
being some $2-3 billion. Writing off this original investment was
clearly necessary to make it a going concern. Current Iridium resellers
are selling airtime for between $1.20-1.40/minute, which is
significantly lower than the $5/minute you quoted. Phones are selling
for between $1,200-3,600 USD.

I doubt, though, that Iridium was ever intended as a mass market
product. There are limitations on the number of subscribers such a
constellation can handle, particularly when most of them tend to be
concentrated in certain areas like North America, the Middle East, etc.
which is a result of having a few large customers like the US DoD and
the UN.

Mike Lorrey
Vice-Chair, 2nd District, Libertarian Party of NH
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
                                      -William Pitt (1759-1806) 
Blog: http://intlib.blogspot.com

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