Causalien
Prime 8 ball Oracle
It looks like starlink's utility is now expanding into IRDM's use cases. What does everyone think? Are they competitors or will both make money in the future?
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Starlink IPO
- Thread starter KarenRei
- Start date
Forget what it looks like now. Imagine 5 years from now. There are a half dozen companies like this. Would you say:
"No one will beat AT&T, they came first. No one will sign up with Verizon", of course not. First mover advantage only helps for a while. Internet is a commodity, so it will be down to cost, speed, and customer support.
I think that both will make money, but Iridium might have to make a few adjustments. Iridium operates in the L-Band and is omnidirectional. Starlink operates in the Ku-, Ka-, and (soon) V-Bands and is highly directional. The CEO of Iridium sings SpaceX's praises, indicating that he can afford to do so.
Iridium probably could be a better company if it were paired with a launch company in the medium-term, such that its current constellation would be replaced by a megaconstellation. Wouldn't be surprised to see it bought by Amazon/Blue Origin or SpaceX.
Causalien
Prime 8 ball Oracle
Oh, so it's a buyout play. I see it in ark etf. So is that the argument cathy gave as well?
Don't follow ARK, so I wouldn't know.
I wouldn't invest in Iridium as a buyout play because this would probably be a medium-term occurrence. In about five years, Iridium will start thinking about a constellation refresh, and look around for partners.
Edit: I don't imagine Iridium as a huge growth opportunity. It's more steady, but unspectacular growth.
I wouldn't invest in Iridium as a buyout play because this would probably be a medium-term occurrence. In about five years, Iridium will start thinking about a constellation refresh, and look around for partners.
Edit: I don't imagine Iridium as a huge growth opportunity. It's more steady, but unspectacular growth.
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adiggs
Well-Known Member
I do see your point, and if this were another terrestrial internet infrastructure, then I would readily agree with you.
The difference I see here (which doesn't make me right) is that SpaceX has the cost and volume of launch to actually built out their constellation. And as fast as SpaceX is going, we can still see how slowly this is going.
So any competitor has two gargantuan obstacles to overcome:
1) cost / satellite PLUS cost to get satellite into orbit.
2) launch capacity to get the 1000's of satellites into orbit that are needed.
What company will any competitor use to get their 1000's of satellites into orbit? Today, they are either using SpaceX OR they are waiting on one of the other companies pursuing an orbital class rocket and launch system.
We've seen how fast SpaceX is moving, and we've seen how many years it has taken SpaceX to go from 1 rocket into orbit, ever, to a company that is launching something every ~2 weeks.
I don't see anybody else with a meaningful fraction of their constellation in orbit in 5 years unless they have somehow persuaded SpaceX to do the launching for them, with the alternative demand replacing SpaceX's own launches for their constellation.
And that is the barrier to entry everybody else faces. They need a different launch provider (maybe Electron out of New Zealand?) that can put serious volumes of satellites into orbit at low launch costs, and they need them now.
For starters:
Amazon’s project, known as Kuiper, would see the company launch 3,236 satellites into low Earth orbit. Amazon says it will deploy the satellites in five phases, with broadband service beginning once it has 578 satellites in orbit.
Meanwhile VZ is offering 4G home internet, and will do 5G as well. But their current offering is trying to walk the line not to kill current revenue stream from wireless side, so the connection is not portable (locked to one address). So for camping/boating/etc, it wouldnt be useful.
adiggs
Well-Known Member
I don't know anything about the Verizon service, but I haven't heard of them trying to do a satellite based internet service. And especially a LEO service with reasonably good ping times. Are they in this business?
For Amazon, the top line / press release / public statements that you relay about the service sound good. My observation has to do with what they'll be able to pull off in reality. Presumably the Amazon service will rely on Blue Origin as their launch provider, rather than trying to talk SpaceX into lofting their satellites. Today Blue Origin is still working on getting into orbit for the first time.
Assuming that the satellites are "easy" to build, or at least not the bottleneck to getting the Amazon constellation running, then their likelihood of success amounts to the likelihood of Blue Origin reaching orbit and then scaling up so they can launch frequently. If they're putting 60 satellites into orbit with each launch (as SpaceX is doing right now), then Amazon only needs ~50 launches to get 3000 satellites into orbit using a launch provider still working on #1 to orbit. For a point of comparison, SpaceX seems like they are lofting new satellites constantly, and they've got like 12 under their belt.
Somebody will have the answer to this - how long from first orbital launch to 50th did it take for SpaceX to get there? Presumably Blue Origin can fund the effort out of Bezos' pocket so money isn't an issue, but time and engineering is still an issue.
I'm definitely not saying that it can't be done - that nobody can compete with SpaceX. But SpaceX's lead sure does look big to me, with the cost side and launch frequency of the competition all in SpaceX's favor.
adiggs
Well-Known Member
I completely agree with this idea in general - first mover provides many advantages, but also frequently doesn't remain the market leader. I suspect that an important part of this dynamic is that the second mover can learn from the first mover and use those learnings to move faster, be more hungry, spend less on the R&D, etc..
In this particular market, my observation is that the first mover has a significant opportunity to foreclose any other entrants into the market. Which doesn't make me right, for sure. In many markets, the first mover advantage isn't nearly as big (or at least, as I hypothesize it).
Another dynamic, one that is harder to characterize, is that Elon operated businesses have a tendency to aggressively price their offerings. There are many consequences - I believe that Elon thinks of it in terms of leaving as much money on the table for his customers as possible while still running an economically viable company. Most business leaders thing in terms of pricing their product as high as the market will bear, in order to maximize profits.
That low pricing may or may not appear in this particular product - I don't know, but to the degree that Elon is pricing Starlink on the lower end of what's needed to make the product a money maker, that will make it that much harder for other market entrants to even appear. As one example for SpaceX, consider SpaceX pricing for their customers that need transport into space. SpaceX is dramatically cheaper than anybody else out there operating launch services (which makes it that much harder for a new competitor to come along and take market share in the transport-to-space market).
Yes, a lot of people think Tesla is synonymous with expensive, but you get a lot for the money, especially if you are not buying a gen 1 product. They're unbeatable in solar currently, spacex as you mentioned is cheap. Even the cars are cheap compared to what direct competition charges for the same. But we pay for it with half baked solutions that are known not to be 100% but can be fixed over time. Agile software development processes for hardware.
Walmart did the same by constantly working to cut costs to drive down prices, which killed most of their smaller competition who don't have access to the same large bulk discounts.
It makes me wonder what happens to the Tesla side of things as competition moves into dedicated EV platforms - each competitor makes more cars in a year than has Tesla lifetime. It makes sense to burn all your cash to expand rapidly so you can approach their production numbers so you don't get caught buying in smaller quantities.
Walmart did the same by constantly working to cut costs to drive down prices, which killed most of their smaller competition who don't have access to the same large bulk discounts.
It makes me wonder what happens to the Tesla side of things as competition moves into dedicated EV platforms - each competitor makes more cars in a year than has Tesla lifetime. It makes sense to burn all your cash to expand rapidly so you can approach their production numbers so you don't get caught buying in smaller quantities.
dazedNconfuzed
Member
SpaceX isn’t first to market. Rockets & satellites aren’t new. They’re trouncing the prior companies by jumping to new tech where entrenched competition can’t because of bureaucracy.
Starlink is racing ahead by giving a profitable reason to exercise reusability: prove reliability to potential clients without asking others to take the risk. Every Starlink launch is at reuse cost, no profit overhead - build a new second stage and load fuel, use each launch as advertising reliability, that’s close to free. The satellites are cheap. NOBODY has that kind of leverage at this point.
Starlink is racing ahead by giving a profitable reason to exercise reusability: prove reliability to potential clients without asking others to take the risk. Every Starlink launch is at reuse cost, no profit overhead - build a new second stage and load fuel, use each launch as advertising reliability, that’s close to free. The satellites are cheap. NOBODY has that kind of leverage at this point.
Buckminster
Well-Known Member
There is a lot of money sloshing around on Starlink: Starlink Stock Could Be Like Buying Tesla at $40
I've been reading reviews from early customers. They are all very positive from what I've seen. Most note that it's a modest cost increase but a MAJOR increase in speed.
Just look at the dumb IPOs that exploded. Door dash was up like 100% the first day wasn't it? And what is that, an App that sends you a menu and collects payment.
It's hard to imagine that everyone isn't already aware of Starlink and ready to pounce on IPO.
Things change when stuff becomes a commodity. In those same lines, investing has turned pretty easy nowadays, hasn't it?
So.. with $ARKX coming out in a few months... What will they buy? $IRDM and $SPCE seem like top picks... They can't own SpaceX/Starlink for obvious reasons... What else is there?
JRP3
Hyperactive Member
As far as I understand public ETFs cannot hold non-public assets because they need to be priced based on the basket of stocks they own and private stocks have no value so impossible to price.
I could be wrong. But I think this was the reason Cathie wanted to create an alternative investment vehicle (something like an ETF but not an ETF) to allow the average investor to get access to private companies.
Disclosure: I haven't yet read the fund's SEC filing.... Will do it later today.
https://sec.report/Document/0001104659-21-003837/
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