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Subject:  Re: GMH show me the money Date:  5/8/2000  1:09 PM
Author:  mojotoad Number:  1747 of 7023

My last post looked a bit noisy since the paragraphs got stripped away (mozilla still has a way to go as a browser...)

Anyway, here are the major points of my post:

1) Two major issues: content control and mobile access.

2) The "push" paradigm of content will be (and is currently being) replaced by on-demand "pull" modes of distribution.

3) The "pull" methods of distribution will be available via regular internet access points, whether they be wireless or not.

4) Wireless WAN, plus roaming abilities for the client devices, represents significant competition to satellite based wireless access. (see below for some more thoughts on that).

5) Wireless consumers will require regular internet access in addition to whatever else their unit provides.

6) If spread-spectrum wireless WAN is competitive in both cost and bandwidth, there is no reason to use a dedicated satellite-based unit since the content will be available through regular internet access.

This is why it is a grave mistake to tightly bind your content product with your wireless access infrastructure. Since internet access will be pervasive for your product (it had better be, unless you want to lose market share immediately), your content business will have to subscription based, portal based, or some combination of the two.

The infrastructure of wireless access has tremendous potential, but it should be considered just that. This is the realm of ISP's, or even Cisco type companies. They make money from providing backbones.

Will satellite based access points or backbones be viable? I really don't know, but consider the following:

Sats are handicapped in that their hardware is far more expensive, deployment costs are obviously enormous, and upgrades and repairs are extremely costly. This is the price you pay for *immediate* global coverage.

A network of cell towers has cheaper hardware (does not have to be shock resistant, space-hardened, or as redundant), cheaper deployment, and cheaper access for upgrades and repairs. However, you require more units for more localized coverage. (I really wish I had some hard numbers on what these costs really add up to once all units are tallied...but it's the upgrade aspect that concern me the most, since your hardware will be inadequate within 5 years of deployment).

Currently, most of the market is going to be clustered around metropolitan areas and jet setting. Access from remote locales, although really cool, is a small segment of the market. Wireless WAN networks will be going head to head with satellite based access in these metropolitan markets.

When we talk about end-user applications, it's only that first connection that is the important one. Once you're on the net, how you "dialed in" is irrelevant.

One possibility that I don't see discussed that often is providing backbones via satellite. Rather than concentrate on the end user, provide backbone infrastructure to remote areas of the globe in lieu of running land lines...oh, wait, I think they call those telecommunications satellites! ;-)

Personally, I would love to have wireless satellite access anywhere on the planet. I just don't see it effectively happening with the market reality being what it is today -- it will take a cultural shift. Once telecommuting becomes more widespread, there will have to be a diaspora away from the major metropolitan areas. Satellites might look downright cheap once you are faced with the prospect of setting up cell towers in every hamlet and berg on the planet.

Mojotoad

P.S. I don't own GM stock -- I've just been researching it lately. But if I did own it, I would not convert to GMH -- in the short term, mgriehle's analysis is dead on. In the long term...well, reflect on the issues I've touched on above. At this point it seems sketchy to me, even though I would personally love to see it happen.
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