Apple will invest another $1.1 billion into Globalstar and will also take a 20% ownership stake in the company. But what exactly Apple plans to do with Globalstar and its satellite network remains unclear.
Apple plans to invest another $1.1 billion into satellite operator Globalstar. But the details and contours of that investment remain unclear.
"The Updated Services Agreements provide that Customer [Apple] will make cash prepayments to the Company, including for approved capital expenditures in connection with the Extended MSS Network," Globalstar disclosed in a new SEC filing. The company's shares spiked on the news.
In its filing, Globalstar said Apple will also take a 20% ownership stake in an equity deal worth about $400 million. Apple, of course, first launched satellite messaging with its iPhone 14 in 2022 via Globalstar's satellites. That gadget, and Apple's subsequent iPhones, support direct links to Globalstar's roughly two dozen satellites.
But Apple's satellite efforts have been expanding. With its new iOS 18 software platform, Apple is shifting its work with Globalstar from emergency messaging services to just regular messaging. Concurrent with that shift, Globalstar is moving forward with plans to replace up to 26 of its satellites.
Globalstar is scheduled to release its quarterly results on November 7. Its new filing coincided with the release of Apple's quarterly results this week. The iPhone maker reported that its total revenues increased by 6.1% year-over-year, a figure above most expectations. But the company also offered lower-than-expected financial guidance for its coming quarter. The financial analysts at KeyBanc Capital Markets argued that's because Apple expects to grow its hardware revenues just 1%, well below expectations of more than 5%.
That broadly dovetails with early indications that Apple's new iPhone 16 isn't selling as well as last year's new model.
The speculation
It's not clear exactly what Apple plans to get out of Globalstar via its new $1.1 billion cash injection. The company already accounts for 85% of Globalstar's satellite network capacity.
One industry watcher suggested Apple's money could add up to 80 new satellites to Globalstar's network.
Others speculated Apple's plans might involve more than that. "All uncertain at this point but the reference to a 'new MSS network' and a 'new satellite constellation' suggests it is more than just upgraded replacement satellites," wrote analyst Tim Farrar, with TMF Associates, on social media earlier this month.
Apple has long been rumored to have satellite ambitions expanding far beyond emergency messaging services. For example, Apple's Tim Cook was reportedly interested in a research project at the company that would use satellites to bypass terrestrial wireless networks.
"We think it's reasonable to assume that voice [calling] is on the roadmap," wrote LightShed Partners analyst Walter Piecyk in a post earlier this year.
Apple, after all, has been working to increase the growth of its Services business, which includes everything from Apple TV to Apple Music. In its most recent quarter, Apple's Services division reached a record $25 billion in revenues, up 12% from a year ago.
When Apple first launched its emergency satellite messaging service, the company said it would be free for the first two years. However, Apple then extended the free period until 2025. If Apple begins charging for the offering at some point, those revenues would likely fall into Apple's Services business.
The other players
To be clear, Apple is not alone in eyeing communications from space. Indeed, Amazon this week signaled it will pursue federal funding for its own low-Earth orbit (LEO) satellite constellation. Amazon has also indicated interest in using its planned satellites for direct-to-device (D2D) services, which connect phones to satellites like Apple does with Globalstar.
Apple was first to the D2D market, but other companies including SpaceX and AST SpaceMobile are hoping to create similar connections. Further, both SpaceX and AST SpaceMobile have recently touted progress in their efforts.
"T-Mobile and SpaceX are excited to launch commercial direct-to-cellular service later this year," the companies wrote to the FCC recently. And on social media, one top SpaceX executive said the rocket company only needs to launch five more satellites to finish its initial D2D constellation. The company has launched more than 200 satellites capable of D2D connections so far this year.
AST SpaceMobile – which hopes to provide similar D2D connections for AT&T and Verizon customers – said it too is making progress. The company recently reported that all five of its initial commercial satellites have successfully unfolded, meaning that they can now begin conducting communications.
"AST SpaceMobile will initiate commercial service in the near term," the company told the FCC recently. However, it's not exactly clear when that commercial service might be available to AT&T and Verizon customers.
From Google to Logos
The opportunities presented by space communications continue to attract new entrants. The latest is Logos Space Services, a startup founded by Milo Medin. Medin is a longtime telecom executive who previously worked for more than a decade as Google's VP of access and wireless services. Prior to that, Medin was the chairman and CTO of M2Z Networks.
"After working for decades in building large terrestrial broadband infrastructure, I am returning to my NASA roots in satellite connectivity," Medin wrote on social media. "Yesterday, we filed an application with the FCC to build and operate a new dual-use low Earth orbit satellite constellation, providing highly resilient multi-gigabit communications services across the globe and equipped with coherent optical crosslinks that reduce the need to transit terrestrial fiber."
The Logos Network could ultimately comprise 3,960 satellites. "The constellation will be deployed in phases," the company told the FCC. "The first phase, consisting of 1,092 satellites, will provide sufficient coverage and capacity for Logos to roll out its initial service offering to enterprise customers."
On its website, the company suggested it might pursue customers in the airline industry. "Multi-gigabit speed and reliability are a design, not a feature, of our system. Logos also will be able to provide Internet transit service for customers like airlines to offer Internet access to their customers."
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