Following the news that Apple plans to invest $1.1 billion in satellite communications company Globalstar alongside a further $400 million for a 20% equity stake in the business, Emma Mohr-McClune, the Chief Analyst, Technology, at GlobalData, offers her view…
“According to GlobalData, this prospective deal packs a competitive punch for virtually all corners of the connectivity market ecosystem, from carriers to OEMs. This is arguably the largest and most significant consumer OEM low Earth orbit (LEO) deal to date, and the arrangement puts Apple in a clear leading position among western OEMs for extended direct and mass-market voice satellite texting and even calling services for both emergency and remote use cases.
“In addition to continuing to allocate 85% of its network capacity to Apple, Globalstar will use the $1.1 billion in preservice payments to deliver a new satellite service constellation, expanded ground infrastructure, and increased global mobile satellite services (MSS) licensing. The new arrangement represents a significant expansion of an earlier 2022 deal, which first gave iPhone 14 users access to Globalstar’s 31 L-band satellites for emergency text services – a service which has since been extended to remote or off-grid use cases with iOS 18.
“The Apple-Globalstar arrangement also lowers the incentive for mobile network operators to strike their own deals with satellite providers for connectivity. There is now no doubt that Apple iPhone users are likely to have faster, readier access to more sophisticated and extended D2D use case services regardless of their wireless connectivity provider.
“It can no longer be claimed that Apple has no interest in the connectivity business. On the downside, Apple’s B2C direct monetization plans for this investment are still hazy, and premium plans are likely still several quarters out. The OEM will probably continue to offer free satellite communications services with iPhone hardware in the short term, or at least until the end of 2025 for iPhone 14 users under the terms of the recent one-year extension on the original two-year free inclusive offer.”