Amazon-Globalstar Partnership May Catalyze Apple's Satellite Expansion Plans

Amazon's Satellite Acquisition Poised to Benefit Apple Inc.

Amazon.com Inc.'s planned takeover of Globalstar Inc. for $11.6 billion is expected to have a significant impact on the satellite communications market, potentially benefiting one of Globalstar's biggest rivals: Apple Inc. The deal, announced on Tuesday, will grant Amazon a network of satellites, allowing the online retailer to offer internet services directly to devices.

This acquisition is significant for Apple as it will provide the iPhone maker with a deep-pocketed and ambitious partner in satellite communications. This partnership should help Apple expand its offerings in an increasingly vital market. Apple has already worked with Amazon's infrastructure offerings, including cloud computing services, and has a "proven track record" in doing so.

Apple's satellite features have been in development for years, but the company is still playing catch-up with others in the industry. In 2022, Apple launched a set of satellite-connected services, offering off-the-grid text messaging and the ability to contact emergency services while out of cellular range. To make it work, Apple partnered with Globalstar, a 35-year-old operator of low earth orbit satellites, and acquired a roughly 20% stake in the business.

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However, the landscape has changed significantly since Apple's early entry into the market. Elon Musk's SpaceX has become dominant in satellite-based internet services, offering faster speeds, broader coverage, and the promise of voice and data support. SpaceX has also partnered with T-Mobile US Inc., the second-largest US wireless carrier, making it easy for iPhones and other devices to tap into the network.

Amazon's acquisition of Globalstar changes the equation for Apple, providing the company with access to an expanding constellation of satellites that will help its in-house services better compete with SpaceX's Starlink. Apple wants to work with a "big, known player that's not SpaceX," said Roger Entner, an analyst at Recon Analytics.

While Apple and Amazon are competitors in several markets, including digital assistants, smart home technology, and TV streaming services, they are both moving aggressively to carve out a bigger piece of the satellite market. Amazon plans to launch a direct-to-device network in 2028, providing high-speed connectivity across the globe and helping power Apple's offerings.

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