Apple’s $1.5 billion deal for 20 percent stake in Globalstar is a strategic move that could enhance Apple’s ecosystem and add a competitive edge to its device offerings, Emma Mohr-McClune, Chief Analyst – Technology at GlobalData, said.
Here are a few key reasons why this deal is significant for Apple:
The investment in Globalstar enables Apple to integrate advanced satellite connectivity features directly into its devices. Apple now has a solid foothold in the low Earth orbit (LEO) satellite market, allowing iPhone users to access direct-to-device (D2D) satellite services, such as emergency and off-grid texting, and potentially even calling, without relying on traditional cellular networks. This can significantly improve the utility of Apple’s devices in areas with limited or no cell coverage, enhancing the iPhone’s appeal for both regular consumers and niche markets like adventure travelers and remote workers, the latest GlobalData report said.
By offering satellite-based services that are not dependent on traditional mobile networks, Apple sets itself apart from competitors. This partnership makes Apple the leader among western consumer electronics OEMs in satellite-based direct-to-device communication, allowing iPhone users to stay connected even in remote locations. This could reduce the motivation for mobile network operators to pursue their own satellite solutions, consolidating Apple’s connectivity ecosystem.
Apple’s dedication to offering satellite services directly to customers can increase user loyalty, as iPhone users would likely receive the benefits of advanced connectivity regardless of their mobile network provider. This reinforces Apple’s ecosystem advantage, as users are further incentivized to stay within the Apple ecosystem to access these exclusive features.
Although monetization plans remain unclear, the investment opens up possibilities for Apple to create premium satellite-based service packages, potentially leading to new subscription services. In the short term, Apple may continue offering satellite connectivity as a free service with iPhone hardware, but there’s potential to build a profitable direct-to-consumer revenue stream as the technology matures.
The availability of $1.1 billion preservice payments to Globalstar ensure the expansion of satellite service infrastructure, which Apple can leverage for future applications and products. This infrastructure expansion aligns with Apple’s long-term goal of reducing dependency on third-party networks and gives Apple increased control over essential technology and service delivery.
This deal strengthens Apple’s positioning, enhances device value for users in varied connectivity environments, and paves the way for future monetization opportunities, placing Apple in a commanding position within the growing satellite connectivity business.
The Apple-Globalstar deal lowers the incentive for mobile network operators to strike their own deals with satellite providers for connectivity.
A GSMA Intelligence report said 91 individual operators representing approximately 5 billion connections globally (60 percent of the total mobile market) have formed partnerships with satellite operators.
For instance, AT&T and AST SpaceMobile have entered into an agreement, extending until 2030, to provide their space-based broadband network directly to device (mobile phones).
In August 2024, TPG Telecom signed a deal with direct-to-phone satellite operator Lynk Global, with the aim of eliminating mobile rural connectivity gaps.
The size of the global satellite internet market is expected to reach $25.67 billion by 2032 from $5.88 billion in 2023. Meanwhile, the revenue of the satellite communication (SATCOM) market is expected to reach $70.89 billion by 2032 from $31.22 billion in 2023.
Baburajan Kizhakedath
