Chapter 62 Section 4 Iridium Project

One of the greatest, most regrettable, and perhaps the most failed projects in the history of world technology is the Iridium project led by Motorola. In order to seize the initiative in the world mobile communication market and realize the use of wireless mobile phone communication anywhere in the world, some American companies led by Motorola, with the help of the government, proposed a new generation of satellite mobile communication constellation system in 1987.We know that today's mobile communication ultimately transmits information through communication satellites. In order to ensure that the satellite can send and receive signals at any time, the satellite must keep its relative position with the earth unchanged.All synchronous communication satellites must hang over the equator at a height of more than 30,000 kilometers from the earth.At the same time, many satellite base stations are established on the ground to communicate with mobile phones and satellites.If there is no base station in a place, such as in the Sahara desert, then the mobile phone has no signal and cannot be used.The Iridium project is different from the traditional synchronous communication satellite system. The new design is composed of 77 low-level satellites to form a satellite system covering the whole world.Each satellite is much smaller than a geostationary communication satellite, weighing about 600-700 kilograms, and each satellite has more than 3,000 channels, which can directly communicate with mobile phones (of course, they must also communicate with each other).Therefore, it can guarantee mobile communication anywhere on the earth.Because the metal element iridium has 77 electrons, the project became known as Project Iridium, although the total number of satellites was later reduced to 66.

This is a very grand and advanced plan. Its biggest technical feature is to realize global communication through satellite-to-satellite transmission, which is equivalent to moving the ground cellular mobile system to the sky.Technically speaking, the Iridium system is quite remarkable, it uses Starlink.In the polar regions, it is very difficult for 66 satellites to converge into one point and avoid collisions.In terms of management, it is a complete independent network, and the management of calls and billing is independent of the communication networks of various countries. (This kind of independent billing later brought great trouble to its operation.) Compared with the currently used synchronous orbit satellite communication system, low-orbit satellites have two major advantages: First, because the orbit is low, only a few hundred kilometers, information loss Small, so that it is possible to realize direct communication from mobile phones to satellites.It is impossible for any of our current mobile phones to communicate directly with geostationary satellites 30,000 kilometers away; second, since no special ground base station is required, communication can be performed anywhere on the earth. In 1991, Motorola united several investment companies and officially launched the "Iridium Project". In 1996, the first Iridium star was put into the sky; in 1998, the whole system was successfully put into commercial operation.Al Gore, the most technologically savvy vice president in U.S. history, was the first to make a call using the Iridium satellite system.Prior to this, Iridium had been listed, and Iridium's stock had quadrupled in just one year.The Iridium system was rated as one of the world's best products of the year by the American "Popular Science" magazine.Project Iridium ushered in a new era of personal satellite communications.

From a technical point of view, the Iridium mobile communication system is very successful.This is a true technological masterpiece.I often think that what we Internet companies called high-tech companies do are like toys compared to the Iridium system.There are many major technical inventions in the research and development of the Iridium system.It should be said that the entire Iridium project has been very successful from the establishment, planning and implementation.But commercially, and from an investment point of view, it was a total failure.The investment in this project is as high as five or six billion U.S. dollars, and the annual maintenance fee is several hundred million U.S. dollars.In addition to the investment provided by Motorola and other companies and the funds raised by issuing shares, Iridium has also borrowed three billion US dollars in debt, and the monthly interest alone amounts to tens of millions.In order to pay the high fees, Iridium can only set the price of the mobile phone at 5,000 US dollars, and the call fee per minute is set at 3 US dollars per minute.In this way, the user base of Iridium is greatly reduced.Until last year, it had only 200,000 users, which is less than the number of users that Apple's iPhone develops in a month.

Less than a year after the Iridium system was put into commercial operation, on August 13, 1999, Iridium filed for bankruptcy protection in the New York federal court.Half a year later, on March 18, 2000, Iridium officially went bankrupt.Iridium became a beautiful shooting star. The 66 satellites flew by themselves in the sky for several years, and were finally bought by a private equity fund company (Private Equity) at a low price of 25 million US dollars in 2001.Less than 1% of Iridium's entire investment of $6 billion.As a private company that has nothing to do with Motorola, Iridium has actually come back to life, achieving a turnover of nearly 300 million US dollars and a profit of 50 million last year. (Note: The profit here is calculated according to the US accounting settlement method, and the profit does not mean that the cash flow is positive.)

The Iridium Project is a meteor in the history of communication, a beautiful story (A Beautiful Story).Motorola has cleverly used its technological advantages to attract the world's attention.As soon as the plan came out, it attracted widespread attention from the world, and also won the favor of venture capitalists.Motorola took out one billion US dollars for this, and at the same time got nearly five billion US dollars from investment companies like fishing, thus greatly reducing its own risk.However, in terms of business operations, Motorola has been very unsuccessful.First of all, the market analysis now seems to be problematic, and the high cost makes it impossible for the number of users to reach the scale necessary for the expected profitability.The reason for the high cost is caused by the wrong choice of technology.Motorola has been a great technology company for a long time. It is good at technology, but it believes too much in the role of technology.The Iridium project is technically unparalleled, but the technology that is too ahead of the market not only leads to high costs, but also huge maintenance costs.In addition, the disadvantages of introducing venture capital itself were highlighted in the later stage of the project, that is, investors put the Iridium system into commercial use prematurely in order to recover their investment. At that time, the reliability and clarity of calls of this system were very poor, and the data transmission rate was only There's 2.4Kps, so there's no way to do anything but make calls, which disappoints potential users.Generally speaking, the Iridium project is too advanced. In the first two quarters of its opening, there were only 10,000 users worldwide. However, market analysis optimistically predicted that there would be ten times that number in China alone.in later commercial operations.Iridium had a lot of problems, which eventually caused the bank to stop lending, some shareholders withdrew their investment, and caused the fatal blow of the company's stock market suspension.