The Rise and Fall of Iridium
The Rise and Fall of Iridium
The Rise and fall of Iridium
In 1999 Iridium LLC and ICO Global Communications services were declared bankrupt due to serious financial issues regarding interests and financing commitments. Iridium LLC was the first in introducing satellite telephone industry in the market and it gained a great fame in its period. Its collection of round about 77 satellites and the system is using Inter-Satellite Links between the satellites. These links help in reducing the number of required gateways for communication. The Iridium technology was using 48 spot beams and TDMA method for user capacity. Iridium was a project with so many dreams. This project was started by the Motorola executive Barry Bertinger along with some engineers after a complaint from Karen Bertinger (wife of Barry Bertinger) saying “But we cant go on vacation now, Im just getting close to making the deal work. How can I close it from Green Turtle Cay-its one of the most remote island in the Bahamas! They wont even have phone.”
For understanding the failure of Iridium technology different factors are being considered to evaluate the disaster tale. The major reasons for failure of any project belonging to any domain are the same these includes bad planning, insufficient involvement of management or lack of management control, adoption of wrong marketing methods and adoption of flop technology in the sense that not considering the market trends.
The first mistake of Iridium was that they had developed their own stand alone network in the space or simply a proprietary sort of network was devised for the Iridium technology. The call from a telephone or handset accesses the nearest satellite and travel across space through linked satellites and then ultimately reached down the destination point. Such system are prone to the problem that the technical manpower which is working on the proprietary technology is also unaware of the prevailing technologies because the compatibility with the existing technologies, which are not using satellite system, is also crucial technical management issue.
The price introduced in the market was also very surprising. A business ever demands the before launching a campaign in business markets its essential to evaluate the customer trends in the market. What are actually the needs of customer with respect to technology i.e. customers views about cost performance, availability, services and many more. But in case of Iridium technology no such analysis was performed to analyze the market trends with respect to customer. The cost of handsets which was introduced in the market was $3000 dollars which was a surprising amount for the customers. On the other hand the price of the call was also too much which was round 7 – 8 dollars for international calls and 3 dollars for domestic. Further the handset, which were manufactured, were also very bulky in weight and was describe the size of actual brick. So the factor like weight of handset, heavy costs of handset and call forced the customers that not to adopt the technology. The senior management had not taken the pain to explore the market and readjust the price of handset and call rate.
Time to market for every innovative technology is considered as a business point. If the idea is launched late it would not be applauded by the community if the community has already got awareness about such an idea. The Iridium project started in 1987 and it was launched in 1999. So Iridium took eleven years for introducing it in the market. During these eleven years the lifestyle of the community had changed due to the new emerging technologies, customer needs and new market trends. The Iridium was well aware about the changes but still an outdated product was introduced in the market. Outdated in the sense the set was too