The Rise and Fall of Iridium Essay Sample

Considering Motorola's esteemed history of innovation, completing the project successfully was crucial. Despite the higher cost and larger size of their French phones compared to those of competitors, they believed the system's high tech standards would eventually attract subscribers (refer to Q2). However, Iridium's failure can also be attributed to its business partners.

They were in charge of sales, pricing, and distribution but failed to establish sales teams, marketing plans, and distribution channels. As a result, they were unaware of being behind schedule.

Kyocera and other manufacturers failed to supply sufficient French telephones to a small number of endorsers, resulting in significant damage to their reputation. Additionally, the high prices prevented over half a million people from purchasing the phones. The executive board consisted mostly of Iridium team members, which hindered their ability to objectively analyze the situation (refer to Q3).

In a two-phase project that began in 1987, Motorola devised the engineering for the orbiter system. The initial phase terminated in 1996, after screening 200,000 people and interviewing 23,000 individuals across 42 states.

Had additional market research been performed, it would have uncovered the substantial expansion of the cellular market during the 1990s [2] [4] as well as its subsequent decline. Consequently, there would have been no requirement for the project's second phase and a significant amount of funds spent on constructing and launching satellites could have been conserved. This unequivocally indicated that the project was destined to fail.

Despite being a remarkable engineering feat, the Iridium system ended up causing one of the top 20 bankruptcies in the United States.

The decline in history was affected by decisions on technology, including satellites. The Iridium system used low-orbit satellites

to provide global coverage, but because of their low altitude (400-450 miles above Earth's surface), they could only cover small cells. [1][3]

Due to the need for 66 orbiters to surround the Earth, costs increased significantly (around $5 billion) for Iridium. To achieve this large number of orbiters, Iridium developed assembly lines which reduced production costs by 90% and enabled the completion of a new orbiter every four and a half years. The Iridium phones were smaller than those for a GEO orbiter, but still large (5) and difficult to market. In addition, the long antenna had to be pointed directly at the orbiters with open-sight access, resulting in limited functionality indoors.

The potential target audience, which included frequent travelers, were not provided with the flexibility they needed due to issues such as car travel or poor signal. Furthermore, the French phones were priced at $3000 with a calling fee ranging from $2 to $8 per minute.

The cost of using Iridium technology was higher than that of cellular phones. However, due to the fast and unforeseen advancement of cellular networks, Iridium became obsolete in areas where terrestrial mobile phones were in use. Even though Iridium provided a GSM service that could integrate into cellular networks, it remained more costly than the standard cellular rate.

The target group for Iridium shrank to those residing in areas without cellular coverage who required a communication device. However, this group was much smaller than originally predicted by the CEO due to the lengthy time it took to develop the new technology. By the time Iridium was launched, cellular phones were affordable and provided sufficient coverage.

During the organization of

Iridium, a significant issue arose as 27 out of the 28 board members were either employees of Iridium or affiliated companies, creating a lack of objective perspectives. To secure funding for the project, Iridium formed a partnership with 18 companies who invested $3.7 billion in exchange for equity and seats on the board.

The company experienced a slowdown due to the challenges in making significant decisions and taking action as a result of the size of the board of managers. If there had been a supervisory board with representatives from various fields such as science and politics, changes in the target market could have been identified earlier. Additionally, the structure made it challenging for Iridium to exert pressure on business partners who had representatives on the board.

There may have been instances where pressure was necessary to prompt partners in constructing necessary infrastructure. Appendix: [1] The 66 satellites in 11 orbits [2] Progression of cellular technology in the United States [3] An Iridium satellite that covers multiple cells [4] Global evolution of cellular technology [5] The use of Iridium satellite phones and beepers. Sources: http://mba.The web page located at tuck.dartmouth.edu/pages/faculty/syd.finkelstein/articles/Iridium.pdf and the hypertext transfer protocol link www.t-bird both contain relevant information.The file located at "edu/pdf/about_us/case_series/a07000025.pdf" is available for referencing.