Putting the Entire Map on the Map

November 30, 2010 by · Comments Off on Putting the Entire Map on the Map
Filed under: Business, Technology 

This week Google backed satellite operator O3b, which stands for the Other 3 billion, secured $1.2b in funding to launch a satellite based fiber quality broadband service for the un-wired world (not to be confused with the wireless world).  O3b estimates that 70% of the world’s population does not have access to the internet, and their satellite service will fill that gap.

Now, that is not new.  Motorola tried to offer phone service around the world with the now defunct Iridium venture.  What’s different, one might ask?  For starters, Google is backing it, which means they are not afraid of risk.  Not that Motorola was, but Google has also a business model that can allow them to reach other heights if the forgotten 70% of the world starts searching online.

Second, and the fun part, the satellite constellation will be launched at 8000 km above the Earths surface, or 4 times closer  than geostationary satellites (like Iridium was).  This means that users will get 4 times less latency (aka delay) one of the limitations that made Iridium usage so annoying.   At this distance a signal will take roughly 50 mS to go up to the satellite and back to Earth.  Seems acceptable, right?

Third, it is not necessarily meant for mobile applications.  This means that you can have a huge battery since you will not be carrying the device with you all the time.  Again, like Iridium that needed a 20lb backpack to make a phone call.  Although they will probably do offer telephone services it is not its main purpose.  Internet access is.

O3b plans to start commercial service by the first half of 2013 after their first 8 satellites.  The question, my fellow reader (singular) is:  will they survive?  Who knows.  Like I said, Google backing means a lot, especially since they are so used to non-money making ventures but with a strategy to make them money in the future (Android anyone?).  But it is definitely an interesting approach that confirms the “universally available” part of Google’s mission. Will it support it’s “Don’t Do Evil” motto? Let’s wait for the business model.



Garmin Needs Rerouting

November 3, 2010 by · 2 Comments
Filed under: Business, Finances, Technology 

Imagine you are a leader in your market and you have been dealing with your competition day in and day out, extremely successfully by having arguably the best product in your category.  Then, all of the sudden, a disruption occurs that makes your product obsolete.  If you still hold Garmin shares (NASDAQ:GRMN), well, I’m sorry.  They are not coming back up, ’cause that’s exactly what happened to Personal Navigation Devices (PND), where Garmin was a dominant player.  Smartphones with integrated GPS made them obsolete.

Now, to their credit, they tried to remain relevant by launching 2 phones, one of them even running Android.  But as they reported today in their 3Q results call, they’ll be “winding down” that business.  I can’t blame them.  Trying to compete with Apple, RIM, Motorola, LG, Samsung, Nokia, and all those multimillion brands that spend millions on each smartphone is tough.  The question is what’s left for Garmin to hang their hat on?

At roughly $6B US in market cap and still making $130M in earnings last quarter you’d think there is hope.  Focusing on their fitness, aviation, and marine business, which grew last quarter, seems reasonable, but I doubt they can sustain a $6B market cap that way.  So, my fellow reader (singular) there might still be room to short, but not a lot.  They may be an acquisition target for their technology, but it is a gamble.  So exit your position, whatever it is and be glad it didn’t go any worse.