...Nombre: XXXCarnet: XXXSección: “A”Curso: Mercado Estratégico, 2011Catedratico: [XXX] | | Solución al caso: “IRIDIUM – Global Satellite Phone System” 1. Describa la situación del mercado de teléfonos móviles desde que se inició la investigación y desarrollo de IRIDIUM (año 1987) hasta el lanzamiento del proyecto (año 1998): R: Para el año de 1987 aunque existía la telefonía móvil, no existía algún sistema de comunicación eficiente y de cobertura mundial (En los detalles del caso se menciona que fue Karen Bertiger la esposa del dueño de Motorola, que en uno de sus viajes se dio cuenta de la necesidad por cubrir). Cuando Iridium decide lanzarse al mercado de la telefonía móvil, se generan cambios radicales, uno de esos grandes cambios se dio en el diseño y costos de los aparatos receptores de la señal, además se le puede agregar que los costos de las llamadas sufrieron una reducción. En cuanto a la estructura de la red de telefonía, se había generado un crecimiento muy grande en Europa, en dicho continente, se había lanzado el servicio GSM que permitía una cobertura en más de cien ciudades a un bajo costo. 2. Se hizo alguna segmentación de mercado como parte del lanzamiento de IRIDIUM? Favor explicar en detalle: R: Al parecer Iridium no realizó ninguna clara segmentación de mercado, ya que en los detalles del caso no se menciona que realizaron un estudio cualitativo que les permitiera conocer las necesidades que el cliente solicitaba. En los detalles del...
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...As we approach the new millennium, satellite-based communication systems will be the next frontier for this industry. They will assume a vital role in infrastructure, securing telecommunication links during disasters and supporting humanity's space-based efforts. A new epoch in space-based wireless communications has already begun with the deployment of two low-Earth-orbiting (LEO) communication satellite systems: Iridium and Globalstar. The Motorola-led Iridium consortium successfully launched the last five satellites in its strong network during the last year. The entire Iridium network integrates terrestrial phone systems and satellites. Several other satellite systems having global or broad geographical coverage will join this new arena within the next 3 to 4 years, thereby complementing and extending existing terrestrial wireless services. Users of conventional terrestrial cellular services, business people, travelers, maritime vessels, aeronautical and industrial facilities, journalists, government agencies, the Coast Guard and emergency-related organizations, others on the go, and people living in sparsely populated areas will be able to communicate with each other via these services. Satellite-based mobile communication systems are characterized by the distance of their satellites from Earth. LEO satellites are typically located 310 miles (500 kms) to 932 miles (1,500 kms) above the planet, whereas medium-Earth-orbit (MEO) versions are located from 3,100 miles...
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...REVIVING IRIDIUM “The brilliance of the technology cannot take precedence over the market case. At the end of the day, if you’re spending $5 billion on the technology, there better be a market for it. And if there isn’t, there will be great humiliation.” - Herschel Shosteck, a Wheaton-based wireless analyst, in March 2000. “Iridium failed to match its system to its mission which caused too much pressure on the company to get customers quickly.” - Leslie Taylor, a consultant for the satellite industry in Washington, in March 2000. IRIDIUM’S FAILURE In August 1999, Iridium LLC[1] (Iridium), the world’s largest provider of global mobile satellite voice and data solutions, filed for Chapter 11[2] bankruptcy protection in the United States Bankruptcy Court. The news did not come as a major surprise to the global telecommunications industry since the company’s financial trouble was well known. It had defaulted on US $1.55 billion in bank loans. Considering the company’s investment loss of US $5 billion, the bankruptcy court imposed a deadline of March 15th 2000 to either bring forth a purchaser or to close its operations. In response, Iridium promised that if it couldn’t attract a buyer by 5 p.m. that day, it would proceed with plans to liquidate. Despite the company’s best efforts, it was not able to convince any party to support its business and it was forced to file for bankruptcy. Following this, many executives in the...
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...Strategic Finance Management Project [pic] Iridium LLC Submitted to Prof. S. Kuntluru Prepared By GROUP 7 Ajinkya Parab (20% contribution) Azeera Aziz (20% contribution) Keerthi Sindhuri (20% contribution) Shachi Tayal (20% contribution) Shraddha Jose (20% contribution) 1. Assuming the market was rational at the time (i.e. market prices reflect fundamental values), how much was Iridium worth on a per share basis at the end of 1998 according to the projections in Exhibit 5? What are the important determinants of value? How confident are you in your answer? (Please assume the market risk premium equals 7.5%.) |Year |1998 |1999 |2000 |2001 |2002 |2003 |2004 |2005 |2006 |2007 | | |A |Interest expense |265 |387 |454 |424 |278 |59 |0 |0 |39 |92 | | |B |Net Income |-1253 |-1549 |-81 |996 |1911 |2948 |3284 |3468 |3590 |3658 | | |C |Dep Expense |552 |811 |966 |1213 |1333 |1084 |1109 |1020 |822 |605 | | |D |Inc in NWC |-398 |290 |63 |-102 |-81 |-54 |-28 |-12 |-4 |-1 | | |E |Cap Expenditure |716 |927 |1349 |1246 |1258 |1274 |385 |391 |413 |844 | | | =A+B+C-D-E |Cash Flows |-754 |-1568 |-73 |1489 |2345 |2871 |4036 |4109 |4042 |3512 | | | |PV of Cash flows |-754 |-1369.85 |-55.7157 |992.8338 |1366.004 |1461.065 |1794.382 |1595.979 |1371.559 |1041.118 |7443.375 | | Discount rate = 5.09 + 1.25*7.5 = 14.65% NPV of all cash flows = $ 7443. 375 Approximate PV of terminal value from Exhibit 4b - $ 8000 Company Value = PV of Terminal...
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...Iridium Case My initial thought on the reading was that Iridium never adequately identified their target market. The entire venture was very capital intensive and the company wanted to create their satellite communications network as fast as possible without solidifying the research on a proposed consumer base and having enough time for due diligence of their service. The system's design was overambitious from the start. Capital requirements forced Iridium to seek lending sources that were tied to subscriber forecasts to ensure profitability to pay the loans back. Overconfidence in these forecasts led to Iridium's assumption that subscriber targets and profitability would be reached in a short period of time. When subscriber and revenue forecasts were not met, Iridium was faced with mounting debts that led to more pressure within the company and a scramble to change their target market from personal consumers to government and industrial users, which also did not work. The design of Iridium's product depended on coordination of transferring a straight line signal from the cellular antenna and the orbiting satellite. As a result, phones were not able to get clear signals and could not be used inside buildings, in crowded urban areas, or even inside moving vehicles. The intended target of business travelers could not use the phones while ‘traveling.’ Around the time of launch, Iridium also experienced problems with its suppliers, particularly Kyocera. This supplier...
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...Iridium, a 485 miles view The name Iridium is derived from the chemical element “Iridium” which has an atomic number of 77. The original architecture of Iridium had 77 satellites, but later the altitude was raised, leading to a 66-satellite constellation(1). 1) What were some of the problems of mobile phone services during the 1990s? In early 1990’s with the use of digital voice coding and digital modulation, the 2G - Global System for Mobile communication (GSM), technology was introduced and some limitations of 1G were addressed. GSM increased bandwidth, allowing addition of more customers, and the rapid increase in customer base was not followed by a rapid increase in cell sites (towers) to provide better signal quality to expand the CPC (Cell Phone Coverage). Narrow service region resulted in poor signal quality causing dropping calls, chopped conversations and frustrated customers. Also the different communication technologies, such as GSM, TDMA, WCDMA, GPRS, HSCSD,(2) used by different telecom companies within a country and across continents generated roaming fee and also the incompatibility of devices among different carriers. The three main problems of mobile services during the 1990s were (1): Signal Quality, Roaming fee and Infrastructure problems. 2) What are the advantages of the satellite phone service over the cell or PCS phone services? When compared to cell phones services, satellite phones services have strong signal everywhere in the world with access...
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...1. Iridium’s system design is marked by technological sophistication but a lack of appreciation for financial practicality. The system comprises a large number LEO satellites designed to communicate with each other and relay information (voice, pages, data, etc.) to land based gateways which then relay calls to phones on the network. In this design and with this large number of satellites, Iridium allows for near ubiquitous telephone coverage around the world. From a purely technical standpoint, the design is to be admired as the realization of the musings of engineers thinking about what is possible in telecommunications. At each hurdle, the engineers overcome obstacles by innovating technology beyond what had existed before. With little oversight though, the costs of implementing and successfully commercializing and generating profit from the new technology fades as a priority for the engineers. At each stage of development, the goal of making the technology the absolute best it can be causes the venture’s costs to spiral up and require unreasonable adoption rates in order to pan out financially. 2. Iridium’s business organization is flawed in that the goal of developing the absolute best technology possible is never adequately weighted against the costs incurred and management seems to fall asleep is carefully monitoring competing technologies or consumer demand and willingness to spend. Ultimately, Iridium’s falls prey to the classic problem of recognizing...
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...ACARS via Iridium Iridium is a large satellite constellation that consists of 66 low-earth orbiting (LEO), cross-linked satellites operating as a fully meshed network providing truly global coverage (including oceans, airways and polar regions). Iridium satellites are in a near-polar orbit at an altitude of 485 miles. The network is composed of 66 active satellites that fly in six orbital planes, each with 11 satellites per plane. Satellites circle the earth once every 100 minutes. ACARS is an Aircraft Communication Addressing and Reporting System otherwise known as Digital DataLink System. ACARS was first developed in the 1970’s. It is a point-to-point service that either sends air-to-ground messages or receives ground-to-air messages from the cockpit. ACARS via Iridium now gives Flight Departments the capability to communicate with the aircraft in their fleet all over the globe. ACARS is now a viable option via Iridium. Until now ACARS was only available by 2 different mediums. ACARS via Very High Frequency (VHF) communication is only available through line of site. ACARS via Inmarsat (Satcom) is only available over the populated continents and does not provide communications over polar routes. The cost of Iridium service is far less than that of Satcom and is available over oceans whereas VHF is not. This allows aircraft to access various services provided by ACARS Service Providers. Aircraft can now send a number of automatic reports (OOOI, engine oil pressure...
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...1) The iridium project was designed to create a worldwide wireless handheld mobile phone system with the ability to communicate anywhere in the world at any time. Iridium’s innovation was to use a large constellation of low-orbiting satellites and this could make the phones much smaller and the voice delay imperceptible.Dr.Leopard made a design in which the entire system would be inverted and only one gateway earth station would be required to connect mobile to landline calls to existing land bases telephone system. The general manager of the company believed in this project and viewed it as a potential symbol of technological prowess. The challenge also provided motivation for the engineers .In order to minimize exposure to financial risk, Iridium started as a project financed company. The 12 regional gateways made Iridium a global project and it made it easy to get regulatory approval to operate in 170 countries. Gateway owners were granted seats on the board of directors. Meetings were conducted between these 28 board members. Iridium also exposed Motorola in developing satellite technology that would provide significant expertise in building satellite communication systems and vast intellectual property. The design of Iridium network allows voice and data to be routed virtually anywhere in the world. They had excess satellites in the orbits which are ready to replace any unserviceable satellites. It ensured that every region of the globe is covered. Ground network is comprised...
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...with society. In the late 1990’s, Iridium wanted a piece of the action. Iridium was a “mobile communication network that allowed any kind of phone transmission (voice, data, fax, and paging) via a system of satellites” (Crawford and Di Benedetto 404-405). This system, composed of 66 satellites and many ground stations, claimed to reach any destination in the world. The Iridium phone also boasted to be able to not be obstructed by tall building or mountains, have all-digital technology, and could be compatible with many local services. However, despite of all these claims of a great phone, the company “filed for chapter 11 bankruptcy on August 13, 1999 with $1.5 billion in outstanding debt” (Iridium files Chapter 11). Through research, it has been found that there were two significant areas of weakness that Iridium could have done better to help the company survive. Iridium entered the cell phone market with absolutely no price advantage and they also targeted the wrong market for their service. Iridium made the mistake of entering an increasingly saturating market with cell phones. The initial cost to build the entire Iridium system was roughly $5 billion. This starting figure already had the company in a hole of debt before it ever took off. Also, the “initial price for a handset purchase was $3,000 with user charges that ranged from $1.10 to $7.00” (Crawford and Di Benedetto 404-405). Taking those figures in account, the Iridium handset was more expensive than a cheap...
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...Moore and Sharma say, “We are proposing a comet because that conclusion hits a ‘sweet spot.’ With comets having lower levels of iridium and osmium than asteroids, yet with a high-velocity comet would have sufficient energy to create a 177-km-wide crater. Asteroids move much slower than comets, so comets have more energy on impact, which in combination with their partially ice make up means they don’t contribute more iridium and osmium.” (Science Teacher, 2013). “In synthesizing the data generated by two very disparate fields of research—geochemistry and geophysics—we are 99.9% sure,” Sharma said, “that what we are dealing with is not an asteroid but a comet impact.” (Science Teacher, 2013). With comets having mostly ice bodies it would make sense that it would have a lower level of metals and other elements. Hector Javier Durand-Manterola and Guadalupe Cordero-Tercero found, “Kinetic energy of the impactor is in the range from 1.3x10^24 J to 5.8x10^25 J. The mass is in the range of 1.0x10^15 kg to 4.6x10^17 kg. The...
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...Review the theories put forward in the literature that attempt to explain why there was a mass extinction at the end of the Cretaceous period. You should aim to outline the main theories, the claims they make, briefly explain any supporting evidence, and compare and contrast the rival theories. Reasons for the Cretaceous mass extinction have been hotly debated for more than 200 years, since the founding days of geology. Cretaceous mass extinction is referred to the mass extinction that happened in the period of Cretaceous (just after Jurassic), more than 100 million years ago. Many creatures, especially dinosaurs, disappeared in the end of Cretaceous. K-T layer which marks the boundary between the Cretaceous and the Tertiary becomes the key point for the solutions. Till now, four main theories which are gradualism, supernova, volcanism and cosmic impact, have been put forward to solve the scientific problem. And, the last three models belong to catastrophism in favor of sudden extinctions, opposite to gradualism. However, this essay will attempt to argue that cosmic impact should be the most reasonable explanation due to evidence that have been found up to now. In order to demonstrate it, this essay will analyze these different theories separately paragraph by paragraph, along with corresponding findings. In addition, it will compare rival theories. In the ‘gradualistic’ view (theory of gradualism), the Earth was a slowly evolving word and the turnover of living species...
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...the MBA program at University of Texas, Austin. His area of interest is entrepreneurship and is considered an authority on the subject. He is also the author of the book titled: “If You Build It Will They Come”, which he also presented in this symposium. During his presentation, Dr. Adams explained how market validation is crucial to a successful venture. To illustrate this he presented two case studies. The first one was about Motorola’s project called Iridium while the second case study’s subject was Apple’s iPod. Even though the technology that Iridium offered was far more sophisticated and ahead of its time than iPod; nevertheless, Iridium failed because of poor marketing strategy and false assumptions about their tentative customers. iPod, on the other hand, was not a technological breakthrough rather a design breakthrough and was highly criticized and considered a flop idea. However, it targeted the right customers with the right strategy and went for a narrower market than the wider one like Iridium. Unlike Iridium, which went into bankruptcy, iPod was a big success which is evident from its stock market value. These case studies made the distinction between doing a lot of work and not gaining anything, and doing little work but doing it right. According to Dr. Adams the most important job as an...
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...HOMEWORK #1 – SAMPLE SOLUTION SAMPLE #1 DENVER AIRPORT: AUTOMATIC BAGGAGE - HANDLING SYSTEM System Overview Early in the planning stage, United Airlines insisted on an automated high speed baggage system. Denver officials had sound reasoning in choosing to install an automated baggage handling system. The Airport was approved in 1989 and planned to be operational by end of 1993. They designed a large scale baggage handling system that cost $193 million. The system requires no manual labor personal and was designed to run faster and more reliable than traditional technology. The original system relied on a network of 300 computers to route bags and 4000 telecars, carry luggage across 21 miles of track. Laser scanners were to read multi-digit bar-coded luggage tags, while photocells tracked the movement of toboggon-like baggage carts. But buggy software crashed the system again and again. The resultant delay in opening has cost the city of Denver and the airlines roughly $1 million per day. Problems Hardware and software bugs (not fully tested), telecars were misrouted and crashed baggage was lost and damaged. This problem occurred as follows : The baggage system continued to unload bags even though they were jammed on the conveyor belt, because the photo eye at this location could not detect the pile of bags on the belt and hence could not signal the system to stop. The baggage system loaded bags into telecarts that were already full, because the system had lost track...
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...Max Guard 1.25 Lugnuts (Blue) CA-1042-AA-BL 25 May 2015 1,200.00 899.00 1 ONOFF Momo Steering Wheel Semi Deep Tuner CA-1041-SDT 25 May 2015 2,200.00 1,799.00 6 ONOFF APEXi Air Filter with Adapter CA-1003 16 Mar 2015 2,200.00 1,199.00 2 ONOFF HKS Grounding Kit (Blue) HKS GK BLUE 13 Apr 2015 1,200.00 699.00 5 ONOFF AAA Car Alarm System CA-1092 25 Apr 2015 2,500.00 1,299.00 18 ONOFF MUGEN Oil Filler Cap (Silver) CA-1044-SI 30 Apr 2015 1,200.00 799.00 2 ONOFF MUGEN Oil Filler Cap (Black) CA-1044 24 Apr 2015 1,200.00 799.00 2 ONOFF APEXi Air Filter with Adapter and Racing Air Breather Package CA-100371 05 Sep 2015 2,300.00 1,399.00 2 ONOFF Max Guard 1.50 Lugnuts (Neo Chrome) CA-1042-BB-NE 25 May 2015 1,300.00 1,099.00 4 ONOFF K&N MRL-1004 Short Type Air Filter + Racing Air Breather Package CA-100271 05 Sep 2015 1,700.00 1,399.00 1 ONOFF F1-Z SF Power Launcher Single Fan (Blue) CA-1037-SF 27 Mar 2015 2,000.00 1,199.00 8 ONOFF Mugen Manual Pedal Pad CA-1049-MT 25 May 2015 2,500.00 1,099.00 1 ONOFF Skunk2 EK Racing Lower Control Arm (Gold) CA-1060-EK-G 28 Mar 2015 5,500.00 4,499.00 2 ONOFF K&N MRL-1004 Short Type Air Filter CA-1004 16 Mar 2015 1,500.00 1,199.00 4 ONOFF AAA Voltmeter Pack of 2 CA-1054 20 Jul 2015 1,000.00 799.00 9 ONOFF Mugen Automatic Pedal Pad CA-1049-AT 25 May 2015 2,500.00 1,099.00 4 ONOFF Thermo-Tec...
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