By Mark Gurman
Amazon.com Inc.’s takeover of Globalstar Inc. is poised to benefit one of the company’s biggest rivals in hardware devices: Apple Inc.
The $11.6 billion deal, announced Tuesday, will provide Amazon with a network of satellites — jump-starting a push to offer internet service directly to devices. The online retailer also pledged to start supporting Apple’s emergency messaging service with its Leo satellite system, filling a role currently held by Globalstar.
If the deal goes through as planned, Apple will get a deep-pocketed and ambitious partner in satellite communications. That should help the iPhone maker expand its offerings in an increasingly vital market.
In a rare statement endorsing an outside tech deal, Apple noted that it already has a “proven track record” working with Amazon’s infrastructure offerings, including the e-commerce company’s cloud computing services.
“We look forward to building on that collaboration with Amazon Leo,” Apple marketing chief Greg Joswiak said in the statement. “This ensures our users will continue to have access to the vital satellite features they have come to rely on.”
Apple has spent years building up its satellite features — but is still playing catch-up with others in the industry.
In 2022, the iPhone maker launched a set of satellite-connected services and today offers off-the-grid text messaging and the ability to contact emergency services while out of cellular range. To make it work, Apple teamed up with Globalstar, a 35-year-old operator of low earth orbit satellites. The iPhone maker also invested in the business, acquiring a roughly 20% stake.
While Apple was early with a consumer offering, the landscape quickly changed. Elon Musk’s SpaceX has become dominant in satellite-based internet services, and its technology goes far beyond what Globalstar can offer. That includes faster speeds, broader coverage, and the promise of voice and data support.
SpaceX has also partnered with T-Mobile US Inc., the second-largest US wireless carrier. That makes it easy for iPhones and other devices to tap into the network — rather than relying on Apple’s in-house features. The other big carriers, AT&T Inc. and Verizon Communications Inc., have launched satellite offerings of their own, giving iPhone users more options.
That has created a major question inside Apple: What’s the point of operating an in-house satellite network when better options are emerging that require far less effort from the company?
Amazon, with its vast resources and ambitions to turn its Leo satellite service into a major competitor to SpaceX’s Starlink, changes that equation. Now, instead of continuing to fund Globalstar, Apple will get access to an expanding constellation that will help its in-house services better compete.
Apple wants to work with a “big, known player that’s not SpaceX,” said Roger Entner, an analyst at Recon Analytics. In the past, people wondered how serious Amazon was about the satellite business, he said. “They just plunked down a lot more money — they’re serious.”
Of course, the satellite industry can be unpredictable — and Amazon in particular has been known to change its product strategy. Apple also may ultimately decide that its homegrown satellite features aren’t worth maintaining.
Moreover, Apple and Amazon are competitors in a number of markets, including digital assistants, smart home technology and even TV streaming services.
But for now, the two tech giants are both moving aggressively to carve out a bigger piece of the satellite market. On Tuesday, Amazon said it plans to launch a direct-to-device network in 2028. That means the Seattle-based company will provide high-speed connectivity across the globe, helping power Apple’s offerings.
For its part, Apple is preparing a range of new satellite features. Bloomberg News reported last year that the company is working on satellite-powered maps, photo messaging and the ability for third-party apps to tap into its satellite network.
One lingering question is whether Apple will keep its satellite services free. Depending on what Amazon ultimately charges Apple for access to Leo, it’s possible that the iPhone maker passes on those costs to users.
