Neil Cybart 9/5/23 Neil Cybart 9/5/23

Globalstar Signs Launch Deal With SpaceX, SpaceX on Apple’s Radar?

Hello everyone. We kick things off with Neil’s thoughts on Globalstar, the satellite operator that Apple is relying on for Emergency SOS via satellite, signing a $64M launch deal with SpaceX. The discussion then turns to answering the question: Does SpaceX’s dominance push Apple to become more hands-on with satellites? Let's jump into today's update.

Globalstar Signs Launch Deal With SpaceX

The direct-to-device satellite communications space is heating up.

Last year, Apple unveiled Emergency SOS via satellite for iPhone 14 and 14 Pro. Apple partnered with satellite operator Globalstar for the feature. Earlier this year, the two companies signed a ~$250M funding deal that boils down to Apple funding Globalstar's efforts to update its dozens of low Earth orbit (LEO) satellites in exchange for making the constellation available to Apple. Meanwhile, SpaceX is working with T-Mobile on providing cell phone users satellite service. AT&T is working with AST SpaceMobile to boost its coverage. Qualcomm has turned to Iridium with Android devices in mind.

As for Globalstar updating its constellation, here's SpaceNews:

“Globalstar has contracted SpaceX to launch Apple-backed satellites in 2025 to replenish its low Earth orbit (LEO) connectivity constellation.

The operator said in an Aug. 30 regulatory filing it will pay a total $64 million to launch the first set of satellites ordered last year from MDA, which is using Rocket Lab to supply chassis for the spacecraft.

While the company did not give further details about the launch agreement, its $327 million contract with MDA covered 17 satellites for deliveries anticipated in 2025. The manufacturing contract also includes an option for up to nine additional satellites at $11.4 million each.

Apple has agreed to reimburse Globalstar for 95% of the constellation, including manufacturing and launch costs. The smartphone giant is also lending Globalstar $252 million to help cover upfront costs.

In return, Apple would use 85% of the new network’s capacity to upgrade satellite services launched last year for its latest iPhone, which can connect with one of Globalstar’s 24 existing satellites for emergency services when cell towers are out of reach.”

Even though Globalstar relied on SpaceX to launch a satellite in mid-2022, this new deal will raise the level of awkwardness between the two companies.

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Neil Cybart 3/2/23 Neil Cybart 3/2/23

Apple Lends $250M to Globalstar, Why Doesn’t Apple Get Into Satellites?, EU Narrows Apple Probe (Daily Update)

Hello everyone. Today’s update kicks off with Neil’s thoughts on Apple lending $250M to Globalstar. The discussion then expands to talk about Apple getting into the satellite business itself. We conclude with a closer look at the EU narrowing its Apple probe to focus on anti-steering.

Let’s jump right into today’s update.

Apple Lends $250M to Globalstar

Over at SpaceNews, here’s Jason Rainbow:

“Globalstar said Feb. 28 that Apple is lending the company $252 million to help cover upfront costs for replenishing its low Earth orbit (LEO) constellation.

Apple is providing the funds as a prepayment for using the network to upgrade satellite services launched last year for its latest iPhone, which can connect with one of Globalstar’s existing 24 satellites in LEO for emergency services outside cellular coverage.

Globalstar picked MDA and Rocket Lab in February 2022 to supply an initial 17 satellites for launch by the end of 2025 in a contract worth $327 million. The contract includes an option for up to nine additional satellites at $11.4 million each.

The satellite operator intends to fund any upfront costs not covered by Apple’s prepayment with its own cash.

Apple has already agreed to reimburse Globalstar for 95% of the constellation; however, it previously required the satellite operator first to raise third-party financing to fund the manufacturing contract.

Removing the need to raise this financing amid challenging macroeconomic conditions clears a significant degree of uncertainty for Globalstar’s constellation plans.”

With interest rates continuing to rise and prospects of securing third-party financing getting dim, Globalstar was in trouble. Apple decided to jump in and loan Globalstar the required cash to keep moving forward (to construct and deploy satellites for Apple). The use of “decided” may be charitable as Apple probably didn’t have much choice other than to step in and bail Globalstar out. Without the loan, Globalstar may not have been able to launch the satellites that Apple needs.