Apple has announced their first move into space with a company who will provide their satellite constellations for the iPhone's entry into satellite connectivity. However, the rules of this sub don't allow us to mention the name of the company that Apple has chosen to partner with for this industry changing event because the stock trades for less than $5. So you'll have to go do a web search about this if you want to know.
From the news release, redacted to follow the rules of this sub:
“On September 7, 2022, Apple Inc. (“Partner”) announced new satellite-enabled services for certain of its products (the “Services”). [REDACTED], Inc. (“[REDACTED]” or the “Company”) will be the satellite operator for the Services pursuant to the terms agreement…
Since execution of the Terms Agreement, the parties have completed several milestones including (i) a feasibility phase, (ii) material upgrades to [REDACTED] ground network to enhance redundancy and coverage, (iii) construction of 10 new gateways around the world, (iv) the successful launch of the ground spare satellite, and (v) rigorous in-field system testing.”
Of course Apple is one of the world's largest companies by revenue and so they could have partnered with any satellite constellation company on Earth and they picked [REDACTED]. This is the beginning of satellite service for the iPhone, which is now the dominant phone in the US. My analysis is that so far it's under appreciated what a huge shift this is going to be and what this move into space means for Apple. I personally wouldn't be surprised if they eventually bought this company and it became Apple's constellation satellite division.
More details on the deal:
The Partnership Agreements generally provide for [REDACTED] to:
•Allocate 85% of its current and future network capacity to support the Services (see further discussion of capacity below);
•Provide and maintain all resources, including personnel, software, satellite, gateways, satellite spectrum and regulatory rights necessary to provide the Services (the “Required Resources”);
•Prioritize the Services and provide Partner with priority access to the Required Resources, including the Company’s licensed satellite spectrum;
•Maintain minimum quality and coverage standards and provide continuity of service;
•Allow Partner to recoup advance payments made to [REDACTED] from future service fees or, to the extent recoupment is not possible, to repay such amounts in cash; and,
•Provide the Resource Protections described below.
Resource Protections
Under certain limited circumstances, in order to facilitate the continuity of services described above, [REDACTED] has agreed to protective provisions, subject to certain conditions (the “Resource Protections”) including:
•Maintenance of all U.S. spectrum licenses in a single subsidiary (the “Spectrum Subsidiary”) and granting Partner the right to approve actions that could substantially affect the Services, the Required Resources or Partner’s rights under the Partnership Agreements;
•Certain restrictions on encumbrances on the Spectrum Subsidiary’s equity and assets;
•The right to take or cause the Company to take protective actions on an interim basis to retain continuity of service if the Company fundamentally breaches the Partnership Agreements and is unable to operate the satellite constellation; and,
•Subordinated liens on the Company’s assets that are used in, may be needed in, or are useful for the Services, as well as an intercreditor agreement with senior lenders which includes the right to pay down [REDACTED]'s senior debt under certain events.
Leave a Reply