4 ms·

I think iridium is a classical case where product was developed with out trying to understand 'what user needs'.For example (@1998) iridium had a cost of $3000

by vu3mmg 10y ago

I think iridium is a classical case where product was developed with out trying to understand 'what user needs'.For example (@1998) iridium had a cost of $3000 per handset with talk time of > $5/minute.Also cellular phone was a strong substitute for iridium. I think they have done a gross under estimate of potential target market. Since iridium needed line of site for communication had difficulty in working inside buildings , I am wondering who is there actual target customer .Number of national banks who invested in iridium lost their money .

chrisseaton 10y ago
I think you've grossly underestimated the use cases and budgets of the users. Cellular phones aren't a substitute, because satellite phones are for precisely where there is no cellular coverage, like less developed countries, remote terrain, and war zones. Nobody expects people in the street to buy them. I would image most customers are military, other governmental and NGOs, maybe some private companies working in remote places, and a few people with private yachts or who like hiking in very remote places. For all those customers and use cases, the price for the handset and cost per minute is reasonable. Mainly because there's no substitute, but also because these users are big spenders anyway. And it doesn't matter that they don't work in buildings, because of course you're normally using these in places without any buildings.
- mattkrause 10y ago
  Exactly! I posted an example right above. I think we used something like 6 minutes total, but it was incredibly useful: The weather turned nasty, we called the pilot that was picking us up and changed our rendezvous to a place that was easier for all of us to get to. This was much easier than slogging our way though a flooded mess. There's also a decent rental market for these phones, so one doesn't have to shell out thousands of dollars--you can get one for $50-75/week + airtime, which is a fairly minor expense if you are already going somewhere so remote you need to be flown in/out.
  - detaro 10y ago
    Yeah, with rentals they really became affordable for people that are doing occasional trips to far-away places. Pure emergency use is better covered with a personal locator beacon, but as soon as you want to convey some information other than "SOS" you probably want one.
    - yardie 10y ago
      You really want both. PLBs will work continuously for days. But with so many false alarms SAR agencies want second verification. Which can be as simple as filing a travel plan and letting relatives know your hiking area. Or pop the plb and then call SAR on your sat phone to say yes this is not a false alarm.
- aab0 10y ago
  > I think you've grossly underestimated the use cases and budgets of the users. I think the point of OP, and of the other magazine article linked in the comments, is that he hasn't 'grossly underestimated' it in the least bit: yes, you can pay peanuts for Iridium and run an already built Iridium network on those use-cases like the military and occasional people going to war zones and NGOs and hikers, and make the business work that way. But you cannot build one costing billions of dollars based on those use-cases, which is why Iridium went bankrupt in the first place - their business plan was based on covering way more than lost hikers and Afghanistan, it was based on the delusional ideas that businessmen in Paris would pay for it. This was delusional, so Iridium went bankrupt, defaulted on its debts, cost its original investors fortunes, and had to be rescued out of bankruptcy for $25m and refocused on the use-cases which actually did work.
  - roywiggins 10y ago
    I've read arguments that the dot-com boom and bust caused a huge amount of internet infrastructure to be built out- which were still available for the post-crash companies to use for cheap, because all the capital costs had been paid for already (by the investors who lost everything in the crash).
    - aab0 10y ago
      Google certainly benefited a ton from all the 'dark fiber' and the glut of bandwidth after the crash. Probably didn't make much of a long-term difference because it didn't solve the last-mile problem to consumers. ('We now have free terabyte/s bandwidth in between our datacenters!' 'Great. But all our customers are still connecting over 1mb/s DSLs. What do we do with it all?') And other countries which didn't build out so much have still done well in getting Internet connectivity done.
mattkrause 10y ago
The idea that people would carry an Iridium phone constantly turned out to be pretty far-fetched (if nothing else, they're big and the audio quality is pretty lousy), but they have carved out a pretty decent niche catering to people who are traveling in remote areas. My brother did some conservation work in really remote areas; I joined him for a little bit. They carried a sat phone, which was used for brief check-ins every few days ("We're fine. Will be moving down the river to site B this afternoon. Bye!") and to coordinate "operations" like receiving supplies or getting picked up by a bush pilot. Edit: I vaguely recall some of the early marketing being aimed at Gordon Gekko-style businessmen who must always be reachable. I think this never panned of partly due to the cost and partly due to the fact that cell phones got much, much better, both in terms of features and coverage.
- david-given 10y ago
  I've seen blister-packed Iridium phones in petrol stations on the edge of the Australian outback; reasonably priced, too.
- kylehotchkiss 10y ago
  Another reason: some gvmt's don't like people bringing satellite phones in due to their lack of ability to eavesdrop
PhantomGremlin 10y ago
trying to understand 'what user needs' Who is the "user"? The story of how the product began development was: Iridium began as a pet project of Motorola executive Barry Bertinger and some engineers in the mid-1980s after the former's wife famously complained of not being able to phone the US while on holiday in the Caribbean. I didn't see that story in the article, but it's probably in the book. That and Iridium flares are the two most interesting things about Iridium, to me at least. [1] http://www.independent.co.uk/news/business/down-to-earth-reasons-for-iridium-failure-1113638.html http://www.independent.co.uk/news/business/down-to-earth-rea...

by vu3mmg 10y ago

chrisseaton 10y ago

I think you've grossly underestimated the use cases and budgets of the users. Cellular phones aren't a substitute, because satellite phones are for precisely where there is no cellular coverage, like less developed countries, remote terrain, and war zones. Nobody expects people in the street to buy them. I would image most customers are military, other governmental and NGOs, maybe some private companies working in remote places, and a few people with private yachts or who like hiking in very remote places. For all those customers and use cases, the price for the handset and cost per minute is reasonable. Mainly because there's no substitute, but also because these users are big spenders anyway. And it doesn't matter that they don't work in buildings, because of course you're normally using these in places without any buildings.

mattkrause 10y ago
Exactly! I posted an example right above. I think we used something like 6 minutes total, but it was incredibly useful: The weather turned nasty, we called the pilot that was picking us up and changed our rendezvous to a place that was easier for all of us to get to. This was much easier than slogging our way though a flooded mess. There's also a decent rental market for these phones, so one doesn't have to shell out thousands of dollars--you can get one for $50-75/week + airtime, which is a fairly minor expense if you are already going somewhere so remote you need to be flown in/out.
- detaro 10y ago
  Yeah, with rentals they really became affordable for people that are doing occasional trips to far-away places. Pure emergency use is better covered with a personal locator beacon, but as soon as you want to convey some information other than "SOS" you probably want one.
  - yardie 10y ago
    You really want both. PLBs will work continuously for days. But with so many false alarms SAR agencies want second verification. Which can be as simple as filing a travel plan and letting relatives know your hiking area. Or pop the plb and then call SAR on your sat phone to say yes this is not a false alarm.
aab0 10y ago
> I think you've grossly underestimated the use cases and budgets of the users. I think the point of OP, and of the other magazine article linked in the comments, is that he hasn't 'grossly underestimated' it in the least bit: yes, you can pay peanuts for Iridium and run an already built Iridium network on those use-cases like the military and occasional people going to war zones and NGOs and hikers, and make the business work that way. But you cannot build one costing billions of dollars based on those use-cases, which is why Iridium went bankrupt in the first place - their business plan was based on covering way more than lost hikers and Afghanistan, it was based on the delusional ideas that businessmen in Paris would pay for it. This was delusional, so Iridium went bankrupt, defaulted on its debts, cost its original investors fortunes, and had to be rescued out of bankruptcy for $25m and refocused on the use-cases which actually did work.
- roywiggins 10y ago
  I've read arguments that the dot-com boom and bust caused a huge amount of internet infrastructure to be built out- which were still available for the post-crash companies to use for cheap, because all the capital costs had been paid for already (by the investors who lost everything in the crash).
  - aab0 10y ago
    Google certainly benefited a ton from all the 'dark fiber' and the glut of bandwidth after the crash. Probably didn't make much of a long-term difference because it didn't solve the last-mile problem to consumers. ('We now have free terabyte/s bandwidth in between our datacenters!' 'Great. But all our customers are still connecting over 1mb/s DSLs. What do we do with it all?') And other countries which didn't build out so much have still done well in getting Internet connectivity done.

mattkrause 10y ago

The idea that people would carry an Iridium phone constantly turned out to be pretty far-fetched (if nothing else, they're big and the audio quality is pretty lousy), but they have carved out a pretty decent niche catering to people who are traveling in remote areas. My brother did some conservation work in really remote areas; I joined him for a little bit. They carried a sat phone, which was used for brief check-ins every few days ("We're fine. Will be moving down the river to site B this afternoon. Bye!") and to coordinate "operations" like receiving supplies or getting picked up by a bush pilot. Edit: I vaguely recall some of the early marketing being aimed at Gordon Gekko-style businessmen who must always be reachable. I think this never panned of partly due to the cost and partly due to the fact that cell phones got much, much better, both in terms of features and coverage.

david-given 10y ago
I've seen blister-packed Iridium phones in petrol stations on the edge of the Australian outback; reasonably priced, too.
kylehotchkiss 10y ago
Another reason: some gvmt's don't like people bringing satellite phones in due to their lack of ability to eavesdrop

PhantomGremlin 10y ago

trying to understand 'what user needs' Who is the "user"? The story of how the product began development was: Iridium began as a pet project of Motorola executive Barry Bertinger and some engineers in the mid-1980s after the former's wife famously complained of not being able to phone the US while on holiday in the Caribbean. I didn't see that story in the article, but it's probably in the book. That and Iridium flares are the two most interesting things about Iridium, to me at least. [1] http://www.independent.co.uk/news/business/down-to-earth-reasons-for-iridium-failure-1113638.html http://www.independent.co.uk/news/business/down-to-earth-rea...