Amazon has committed $11.57 billion to acquire Globalstar, a move signaling a significant escalation in its push to rival Elon Musk's Starlink in the burgeoning satellite internet market. The deal, announced Tuesday, grants Amazon access to Globalstar's existing network of approximately two dozen satellites.
This acquisition is framed as a strategic maneuver to bolster Amazon's own satellite ambitions, particularly its Project Kuiper initiative, which aims to offer direct-to-device satellite connections and expand coverage beyond conventional cellular networks. Globalstar currently operates over 200 satellites and provides a range of services including voice, data, and asset tracking for enterprise, government, and consumer clients.
Shares of Globalstar saw a notable uptick, rising more than 10% following the news. This surge follows a period of increased valuation, with the company's stock gaining over six percent in the preceding two weeks amidst reports of acquisition discussions. Amazon's stock experienced a more modest increase of around three percent.
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The acquisition also solidifies Amazon's connection with Apple, as Globalstar presently powers critical safety features like Emergency SOS and Find My for Apple devices. Globalstar had previously announced plans, with Apple's backing, to expand its satellite network to 54 satellites. The deal is expected to ensure the continued operation and support for these Apple-specific services.
This investment places Amazon directly against Starlink, which boasts a significantly larger constellation of approximately 10,000 satellites in orbit. Starlink reportedly constitutes a substantial portion of SpaceX's revenue, estimated between 50% to 80%.
Background
Globalstar, based in Covington, Louisiana, has a history of providing satellite-based communication solutions. Its services have found utility across various sectors, from enabling communication in remote areas to providing tracking for valuable assets. The company's partnership with Apple for its safety features has been a key highlight of its recent operations.
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Amazon's interest in satellite internet services is primarily driven by its Project Kuiper, a separate venture aiming to deploy its own constellation of satellites. The Globalstar acquisition appears to be a method for Amazon to rapidly acquire necessary infrastructure and expertise while its own satellite network matures. This move underscores the intense competition developing in the low-Earth orbit satellite sector, with multiple major technology companies vying for dominance.
