Apple’s satellite ambitions get $1.1B bigger

Apple plans to invest another $1.1 billion into satellite operator Globalstar. But the details and contours of that investment remain unclear.

“The Updated Services Agreements provide that Customer [Apple] will make cash prepayments to the Company, including for approved capital expenditures in connection with the Extended MSS Network,” Globalstar disclosed in a new SEC filing. The company’s shares spiked on the news.

In its filing, Globalstar said Apple will also take a 20% ownership stake in an equity deal worth about $400 million. Apple, of course, first launched satellite messaging with its iPhone 14 in 2022 via Globalstar’s satellites. That gadget, and Apple’s subsequent iPhones, support direct links to Globalstar’s roughly two dozen satellites.

But Apple’s satellite efforts have been expanding. With its new iOS 18 software platform, Apple is shifting its work with Globalstar from emergency messaging services to just regular messaging. Concurrent with that shift, Globalstar is moving forward with plans to replace up to 26 of its satellites.

Globalstar is scheduled to release its quarterly results on November 7. Its new filing coincided with the release of Apple’s quarterly results this week. The iPhone maker reported that its total revenues increased by 6.1% year-over-year, a figure above most expectations. But the company also offered lower-than-expected financial guidance for its coming quarter. The financial analysts at KeyBanc Capital Markets argued that’s because Apple expects to grow its hardware revenues just 1%, well below expectations of more than 5%.

That broadly dovetails with early indications that Apple’s new iPhone 16 isn’t selling as well as last year’s new model.

The speculation

It’s not clear exactly what Apple plans to get out of Globalstar via its new $1.1 billion cash injection. The company already accounts for 85% of Globalstar’s satellite network capacity.

One industry watcher suggested Apple’s money could add up to 80 new satellites to Globalstar’s network. 

Others speculated Apple’s plans might involve more than that. “All uncertain at this point but the reference to a ‘new MSS network’ and a ‘new satellite constellation’ suggests it is more than just upgraded replacement satellites,” wrote analyst Tim Farrar, with TMF Associates, on social media earlier this month.

Apple has long been rumored to have satellite ambitions expanding far beyond emergency messaging services. For example, Apple’s Tim Cook was reportedly interested in a research project at the company that would use satellites to bypass terrestrial wireless networks.

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