Amazon.com has taken its ambition to new heights, venturing into space for a business endeavor that is set to compete with Elon Musk's SpaceX. However, Amazon's goal is not to deliver packages to the moon, but rather to provide Wi-Fi access to Earthlings.
On Friday at approximately 2:06 p.m. Eastern time, Amazon.com successfully launched its first set of satellites for its space Wi-Fi business, known as Project Kuiper, positioning them 311 miles above the Earth's surface. The company's plan is to establish a constellation of more than 3,000 hardware components in low Earth orbit within the next six years.
This significant milestone was made possible through the deployment of prototype satellites. Through this initiative, Amazon aims to gain valuable insights into satellite design and performance, in addition to testing the ground infrastructure required for efficient communication with the satellites.
According to Rajeev Badyal, Project Kuiper's Vice President of Technology, "This is Amazon's first time entering the realm of satellite deployment, and regardless of the mission's outcome, we are poised to gain an incredible amount of knowledge." These words were shared by Badyal in a recent blog post, reflecting the company's enthusiasm and determination.
To transport the satellites into space, Amazon partnered with United Launch Alliance (ULA), utilizing their Atlas V rocket for the job. ULA is a joint venture between aerospace giants Boeing (BA) and Lockheed Martin (LMT). Additionally, Amazon has secured agreements with three launch providers: ULA, Arianespace (a joint venture between Safran (SAF.France) and Airbus (AIR.France)), and Blue Origin, the space company founded by Jeff Bezos.
Given the magnitude of this project, it is expected to take approximately six years for Amazon to deploy thousands of satellites into space. This timeline accounts for the fact that no other company or country has yet achieved the launch capacity demonstrated by SpaceX.
In conclusion, Amazon's foray into space underscores its commitment to innovation and its determination to provide seamless connectivity to people around the globe. As this venture unfolds, it will undoubtedly shape the future of satellite technology, benefiting humanity in numerous ways.
SpaceX Dominates the Space Wi-Fi Market
SpaceX, led by Elon Musk, has become a force to be reckoned with in the space Wi-Fi industry. Their product, Starlink, has garnered millions of users since its launch in 2019. With over 4,800 Starlink satellites orbiting the Earth, SpaceX has firmly established itself as a leader in the market, creating a significant barrier to entry for competitors like Amazon.
By the end of 2022, SpaceX had already amassed one million Starlink users. Given the recent momentum, this number is projected to double by the end of this year, reaching two million users. As a result, Starlink's annual revenue is expected to exceed $2 billion, with an impressive growth rate of approximately 100%. The potential profitability of space-based Wi-Fi is an enticing prospect for Amazon, but its true extent remains uncertain.
Amazon's foray into space raises interesting questions about the company's pursuit of innovative ventures. Beyond its dominating presence in e-commerce, Amazon's cloud computing service, Amazon Web Services (AWS), has become a behemoth in its own right, contributing around $22 billion to the company's second-quarter revenue of $134 billion.
With aspirations for space to become as lucrative as AWS, Amazon might consider partnering with SpaceX as its fourth launch provider. However, the feasibility of such collaboration between the two competitors remains uncertain as neither company has publicly commented on the matter.
In Friday trading, Amazon stock showed a 1.4% increase, outpacing the S&P 500's 1.3% gain and the Nasdaq Composite's 1.6% surge.