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CELL PHONES DISPLACE MOBILE PHONE SATELLITE NETWORKS21 Motorola's Iridium, a go-anywhere mobile phone system that beamed signals down from 66 satellites, was called "the eighth wonder of the world" by Motorola CEO Chris Galvin. However, at $1,500 for a handset the size of a brick, consumers balked, and few business customers needed the security and reliability offered in remote corners of the globe like Katmandu or Tibet. As a result, Motorola's 25 percent market share in cell phones declined steadily to 13 percent in 2001, and Motorola stock fell 16 percent from 1997-2001, during a period when the S&P 500 was up 76 percent.
Questions
1. Characterize the product space for mobile phones when Iridium began.
2. What trends did Nokia pursue as it designed mobile phone products in the late 1990s? (Refer to the Managerial Challenge at the beginning of this chapter.)
3. What might a more proactive Motorola have done differently had it correctly perceived the steps its rival Nokia would take?
4. Smart phones from Apple and RIM today have imposed upon Nokia competitive pressure once associated with Motorola. What would you advise Nokia to do in light of the success of the iPhone with all its thousands of applications from independent software providers?
What is the variable cost - Please calculate the average cost function for skateboards.
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What is the optimal bid-ask spread?
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Might Wilson's failing the quiz have anything to do with the price of parking? Explain your answer.
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