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No. of Recommendations: 30
In the frenzied winds of the wirless tornado,I see GLOBALSTAR as a fast-growing infant gorilla.The demands for CDMA voice capability anywhere in the world can only be handled by GLOBALSTAR. No other satellite company handles CDMA. This satellite CDMA is vital for systems on planes and auto use of internet and voice because 85% of the world is not covered by cellular. As of now GLOBALSTAR is in Moore's pre-tornado Bowling Alley stage. In the " bowling alley" the strategy is to develop niche markets where customers are under-served and have a compelling reason to buy. The goal is to become the undisputed leader and develop a loyal customer base that will spread the word about the enabling value and reliability of the product. One example of GLOBALSTAR's niche with compelling reasons to buy would be voice communication for emergency services as in the Red Cross contract or voice in Australia.
The sales force is a consultative one. They are working out the kinks allowing the next phase to be ready for the mass market. It is developing their niche base to help promote their product while generating income. After the mistrust engendered by Iridium's failure, it is imperative the GLOBALSTAR develops this base of customers that will testify to GLOBALSTAR's superb enabling product. To advertise to the masses who are still very skeptical would be a waste of time and resources. As GLOBALSTAR's customers report glowingly about the technology(as IFN's trials demonstrated), marketing will soon reach out to the masses.
The strategy in the bowling alley is to expand into other related niches within similar segments or applications. The new niche would be the same application for voice but now applied for example to military services as seen by GLOBALSTAR's GSA contract, or advertise to sailors as the VAR Wireless Zone is doing or help QCOM deliver voice in China where there is very little landline infrastructure. The cascade effect of becoming the leader in each subsequent related niches means you are knocking down the pins and right now the pins are flying and competitors are years away.
Globalstar has other applications such as internet access, two-way messaging, remote metering, and SCADA (Supervisory Control and Data Acquisition). GLOBALSTAR's relationship with Qualcomm's OmniTracs, Inflight internet access, the automobile telematics (via Ford and Qualcomm) all suggests that GLOBALSTAR is correctly positioning itself to be swept up in the tornado generated by the worldwide switch to 3G CDMA and wireless internet and data access. Once in the tornado the demand will be great enough that GLOBALSTAR will not need much of a sales force. The demand will be great enough and the VAR's are already in place and invested in GLOBALSTAR .
I believe that GLOBALSTAR is quickly approaching the tornado. It will be further escalated by QCOMS fast approaching global tornado that will dwarf the local US one witnessed last year. Furthermore because there is no competition in CDMA satellite voice, GLOBALSTAR will quickly become a leader the value chain must rally around. The tornado is marked by demand being much greater than supply. InFlight Network's CEO stated last week that there services alone could use all of Globalstar's present capacity. If GLOBALSTAR is going to take care of their IFN contract plus the Red Cross contract plus the new GSA contract plus all the gateways from Australia to Saudi Arabia to China to Canada, then they will need to raise more money. Not because they are in danger of going bankrupt like the technologically differnt Iridium, but to launch more satellites to handle the rising demands of the tornado. The demands for CDMA voice capability anywhere in the world can only be handled by GLOBALSTAR, a young Gorilla that will grow to King Kong size.

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