Laptop sales have dropped substantially as tablet/Ipad use has grown--same functions in smaller size and cost. Hard to start selling $300K aerostat units when your company was built around $4M units IMO. Good for you if you can right size as you suggest, though. More likely outcome is probably that you try to acquire any successful competitor and try to leverage up the cost again by upselling. DoD is always susceptible to overpaying IMO.
But, with low cost of entry, a new competitor can spring up at any time. That is why WSGI's ability to jump from BiB Mark 1 to BiB Mark 2 in three months was important. WSGI has to keep running hard--won't take a lot more money IMO to do tactical LTA but they will have to tap a lot of innovation through formal and informal partners other than Eastcor IMO. This is all tactical LTA talk, of course. Autonomous and Stratospheric LTA will take more money than tactical. That is my new four fold division of WSGI:
Satcomms/satdata (GTC)
Tactical LTA
Autonomous LTA
Stratospheric LTA
I think Glenn's "spiral up" from the Colorado presentation works but miniaturization is changing sizes and costs IMO and tactical LTA is an added rung on the ladder IMO. That means there has been good news in the market environment in the past two years. The strategic opportunity makes sense--IMO it is now about capitalization (note GS's cash flow concerns) and execution. But, then, isn't that always the triad--
clear strategy
capital
crisp execution
If it were easy everyone would do it, however. But the big LTA guys got kicked in the nacelles by miniaturization of ISR IMO. Good discussion, as always, Run. Thank you. IndyJonesOhio
