(Credit: Amazon)
Amazon is taking on SpaceX in the satellite-to-phone service market by acquiring Globalstar, the satellite connectivity provider for Apple’s iPhone, for $11.6 billion.
The e-commerce giant sees a huge opportunity to deliver satellite connectivity to smartphones in cellular dead zones worldwide. The acquisition will also bolster Amazon Leo, the company’s Starlink challenger, which has been focused on delivering high-speed satellite internet to consumers and enterprises using dish antennas.
Rumors had been circulating that Globalstar might be sold to SpaceX, which is developing its own satellite-to-phone service, Starlink Mobile. However, industry analyst Tim Farrar indicated last month that a bidding war was emerging between Elon Musk’s company and Amazon, with Globalstar looking to sell for $10 billion.
It turns out Amazon has decided to pay $90 per share to acquire Globalstar, which translates to nearly $11.6 billion. Naturally, iPhone owners might worry about changes to their own satellite connectivity, which has long been free, starting on the iPhone 14. But for now, both Amazon and Apple are indicating there will be no major changes.
“In addition to the agreement with Globalstar, Amazon and Apple signed an agreement to provide satellite connectivity for current and future iPhone and Apple Watch features,” the announcement says. This involves using both existing and future Globalstar satellites to power satellite features, including the ability to send text messages in a cellular dead zone and to reach emergency services.
Apple’s SVP Greg Joswiak added: “We look forward to building on that collaboration with Amazon Leo. This ensures our users will continue to have access to the vital satellite features they have come to rely on, including Emergency SOS, Messages, Find My, and Roadside Assistance via satellite, so they can stay safe and connected while off the grid.”
(Credit: PCMag)Globalstar had previously provided satellite connectivity exclusively to Apple iPhones. But under the acquisition, Amazon plans on expanding Globalstar's business by partnering with mobile network operators to deliver satellite-to-phone services. This puts the company in direct competition with SpaceX’s growing Starlink Mobile service, which is already available through T-Mobile and is also eyeing more partnerships.
SpaceX’s system can also power satellite data to mobile apps, and even video calls, although bandwidth remains constrained. Next year, the company is preparing to further upgrade Starlink Mobile to deliver 5G download speeds of 150Mbps by leveraging the valuable radio spectrum it acquired from EchoStar for nearly $20 billion.
It looks like Amazon is responding by acquiring Globalstar, giving it access to the company’s satellite network and mobile satellite service “spectrum licenses with global authorizations,” the company noted. In addition, Amazon is planning on launching a next-generation satellite system starting in 2028 that promises to offer "more advanced voice, data, and messaging services to mobile phones and other cellular devices.”
“The Leo D2D [direct to device] system will offer substantially higher spectrum use and efficiency than legacy direct-to-cell systems, which translates into faster speeds and better performance for customers,” the company added.
The same constellation will integrate with Amazon’s first and second-generation constellations for the dish-focused Leo business. “The complete Amazon Leo network will include thousands of advanced satellites in low Earth orbit and have enough capacity to support hundreds of millions of customer endpoints around the world,” Amazon says. The merger also arrives amid rumors that Amazon is preparing to re-enter the smartphone market.
Prior to the merger news, Globalstar was preparing its own next-generation C-3 constellation of 48 satellites to upgrade the satellite connectivity on Apple iPhones. It looks like Amazon is also planning no change for the C-3 system.
The company told PCMag: “We expect the transaction to close in 2027, and at that point we plan to operate Globalstar’s existing satellite fleet, and their upcoming low Earth orbit satellites being manufactured by MDA Space, before deploying a next-generation DTD system of our own.”