Comment by triceratops
6 months ago
> it's a space-based alternative that serves areas carriers have no financial incentive to cover
In a nutshell: they're serving a market that has less money to spend using more expensive tech than the current industry leaders. Maybe I'm wrong but it doesn't scream "massive profit".
I think Airplanes are going to be pretty profitable. They are sort of running a market cornering operation there. But, there will be competition eventually. Starlink is way faster than the alternatives so most airlines have switched and Starlink has rapidly increased their prices for aviation. Idk if it's enough though, they are definitely running lots of promos for home customers.
That sounds pretty niche. And airlines have already extremely thin margin (that have been eaten by fuel price increase). I wouldn’t be surprised if they drop that type of luxury
It’s another product for airlines to sell and make money off. It also serves to keep passengers entertained and content. It’s going to be a very strong market for Starlink IMHO.
Anything at sea, too. Going on a cruise? The cruise ship can offer you Wifi backed by Starlink for another few bucks. Or even your cell provider could get you hooked right up to Starlink for some phones.
Container ships, military vessels, even fishing expeditions could enjoy an internet connection and cell service.
It's big in the recreational boating community, as those folks generally have the disposable income to support a SpaceX ISP subscription.
Worldwide there's roughly 30 million recreational boats, whereas for commercial aircraft carrying people (not cargo) is more like 30k, so different orders if magnitude. It's highly likely boating would be a more profitable industry to satisfy demand for than airlines in the long term. That is unless they're charging exorbitantly more for airline contracts than personal boat use, which is totally possible.
Amazon Leo just signed delta as a customer so competition is indeed close behind.
I think SpaceX is an incredible company but at this valuation I’d expect it to have something as pervasive as the iPhone or Nvidia chips. It seems to have only small niches.
But you're just looking at internet.
SpaceX has the lion's share of the world's launch market, if you include Starlink.
https://x.com/FutureJurvetson/status/2038811249232732275
Delta’s ViaSat based Wireless is fine. The latency is hire. But it really isn’t a competitive disadvantage.
If Starlink becomes common enough on flights, I absolutely believe it will be a competitive disadvantage.
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There's enough vast terrestrial areas that have had no other options, so those areas may have pent up demand at least in the short term. However, I think they'll need to figure out how to further lower costs to target those poorer underserved communities that tend to come up in these discussions. That is, unless some sort of subsidy is put in place by governments that know that internet connected communities boost economic values, etc. Some such programs likely already exist in some form in the US, but are largely regional so may take some effort to integrate into those systems.
AFAICT, popular tech companies owned by cult of personalities tend to get overinflated evaluations. I agree that the promise of returns tends to be rosier than reality, but at least SpaceX makes a tangible product and isn't the average AI shilling company with no hope of returns. Here at least they have first mover advantage along with lower scaling costs than their competitors thanks to the rocketry side of the biz. I have enormous respect for what SpaceX has accomplished (even if I'm not a fan of the company's owner, etc.)
It’s already profitable
Profitable-profitable or EBITDA-profitable? https://www.reuters.com/business/finance/spacex-generated-ab...
I don't mean this as a gotcha or anything. I imagine rockets are a capital-intensive business. So are datacenters.
Some very rough math. $16 billion in EBITDA with 9million customers. This translates to about $1800 average annual subscription. Per month this is $150.
Starlink for Land 500GB subscription is $165 per month. https://starlink.com/business/maritime.
That is I think Starlink's target customers are ISP deprived. I asked Gemini estimate the size of that market. It said about 10 million in the US and over a 1 billion worldwide. I assume the Elon is pushing the 1 billion number. The problem I see is that outside the US, not everyone can pay $165 per month for internet.