- In a wide-ranging video interview at the All-In Summit, the world’s richest man was asked about his intentions in the satellite-to-cell-phone space
- It’s going to take a couple years before a phone supports the spectrum that SpaceX is acquiring from EchoStar
- LightShed analysts said Musk’s point about not displacing carriers reinforces their view that SpaceX needs to secure an MVNO deal to deliver a Starlink phone direct to consumers
During a video appearance at the All-In Summit, Elon Musk answered some of the burning questions on everyone’s mind these days.
SpaceX just this week inked a deal with EchoStar to buy $17 billion worth of AWS-4 and H-block spectrum to connect cell phones directly to satellites. Conveniently (for us), Musk appeared at the All-In Summit, which featured other business leaders like Mark Cuban, that took place in Los Angeles this week. Video of Musk's appearance was uploaded to the YouTube channel of the All-In Podcast on Tuesday.
The spectrum purchase signifies a long-term deal, he acknowledged, as the phones that support the frequencies that SpaceX is buying likely won’t be shipping for about two years. Chipsets need to be modified to accommodate the spectrum – and the satellites that use these frequencies also need to be launched.
Is his vision to – eventually – build a phone that just works anywhere and everywhere?
That could be one option. “To be clear, we’re not going to put the other carriers out of business. They’re still going to be around. They own a lot of spectrum,” he said.
“But yes, you should be able to have a Starlink – like you have an AT&T or a T-Mobile or a Verizon or whatever – you could have an account with Starlink that works with your Starlink antenna at home,” as well as on your phone. “It would be a comprehensive solution for high bandwidth at home and for high bandwidth direct to cell.”
Analysts: Timeline not surprising
Analysts Walter Piecyk and Joe Galone of LightShed Partners said Musk’s two-year timeline for a Starlink phone isn’t surprising given spectrum banding, chip development and satellite integration. And they noted that he’s mused before that if phone manufacturers continue to hinder his technology that he “would make a phone as a forcing function to compete with them.”
“With satellite connectivity and Grok as a differentiator, he now has even more incentive to as Tim Cook likes to say, ‘pull on that string,’” the LightShed analysts wrote in a blog post.
Musk stressed that carriers won’t be displaced given the depth of their spectrum portfolio, a point that reinforces their view that securing an MVNO deal will be essential if SpaceX wants to deliver a Starlink phone directly to consumers, the analysts noted.
Where does Apple play in all this?
During Apple’s big iPhone 17 unveil on Tuesday, there was no mention of satellite connectivity. That’s not surprising. But Apple kicked off the direct-to-device (D2D) market in 2022 with satellite connectivity provided by Globalstar, so that poses some tricky questions for the device manufacturer.
In future iPhones, does Apple plan to support the frequencies that SpaceX is acquiring from EchoStar? Apple didn’t respond to questions from Fierce about that. Globalstar also didn't comment when asked this week about its relationship with Apple.
Earlier this year, The Information published a report (subscription required) chronicling debates within Apple about how some executives worry the company’s moves in the satellite market are putting it too far into the realm of becoming a telecom carrier, which could expose it to more regulation.
The current reasoning goes something like this. If Apple executives were already questioning the handset maker’s dalliance in providing satellite features in cell phones, SpaceX’s $17 billion spectrum purchase might make Apple execs even more inclined to leave satellite connectivity up to the mobile service providers or to someone like SpaceX.
“To me, the biggest thing is: What does Apple do now? Because that will really set the shape of the industry going forward. Do they stick with Globalstar and their own plans? Or do they abandon their plans and throw in their lot with Starlink?,” said satellite industry analyst Tim Farrar of TMF Associates.
“That to me is the game that SpaceX is playing here. This gives them the opportunity to pressure Apple,” he said.
Apple’s Globalstar investment
Apple revealed last year that it’s investing more in Globalstar and its development of a new C-3 satellite constellation that will lead to better services to cell phones. Globalstar hasn’t said exactly what new capabilities it will provide to Apple via these new satellites, but it’s sure to be an enhancement to the text-oriented services that are currently available.
“Obviously, they’ll have higher throughput and stronger, tighter beams to deliver a lot more data per person,” Farrar said of Globalstar’s up-and-coming constellation.
But they’re not talking about providing Netflix to consumers when they’re hiking in the outback.
“I think Globalstar has been fairly clear that they don't see that as a business. Watching Netflix on top of a mountain isn't going to be appealing to a lot of people,” he said.
The war of the future
Regardless of the impact on Apple and Globalstar, the agreement between EchoStar and SpaceX represents one of the most significant strategic transactions in the recent history of the U.S. telecommunications sector, according to Recon Analytics founder Roger Entner.
In fact, it’s likely to shape or reshape the D2D strategies of every major player for years to come.
“The era of four-player competition is definitively over. The war for the future of American connectivity – a war fought simultaneously on the ground and from orbit – has just begun,” Entner concluded in a blog post.