Apple May Partner With Starlink Soon: A Deal Forged by Necessity

Even though these new features are not very noticeable in France or elsewhere outside the USA, there is one innovation that is gaining popularity among mobile manufacturers, initiated by Apple with the iPhone 14: satellite connectivity when mobile networks are unavailable. Although Globalstar has been Cupertino’s provider from the beginning, there’s a possibility that Apple might switch to Starlink, according to The Information.

The relationship between Starlink and Apple can best be described as love-hate: the two companies have had multiple discussions, particularly about providing the service Apple wants to offer its mobile users, but the relationship between Tim Cook and Elon Musk is fraught, making any agreement complex.

When the first satellite-connected iPhone was introduced, Starlink, through Elon Musk, had offered to provide satellite connectivity to the iPhone 14 for an exclusive fee of $5 billion, with an additional $1 billion per year for service continuity once competitors were allowed. Apple declined this offer, opting instead to partner with Globalstar.

So far, this arrangement has been limping along, initially allowing only emergency text messages, which was later expanded to include texts to any recipient in the USA, Canada, and Mexico, with Europe currently limited to emergency assistance only. The main issue here is that Apple would like to expand these capabilities, but Globalstar, with its 24 satellites at an altitude of 1,400 km, is too limited to allow for this.

What should be done? Purchase Globalstar? Even though this is a feasible option, and the satellite operator is indeed seeking a buyer for $10 billion, Apple is not interested. It’s not that Apple lacks the financial ability, but rather, Apple does not want to be perceived as a telecom operator by regulators, which would subject it to stringent regulations. This is also why Apple has not yet charged for its satellite emergency or messaging services, as doing so would officially place it in the role of a telecom operator.

Instead, Apple has done what it knows best: invest in its partner. To this end, Cupertino has invested $2 billion in Globalstar to help the company grow. However, this is not sufficient: Globalstar’s satellite constellation is too small and inadequate to enable anything beyond basic messaging for iPhone users. Further evidence that the partnership is stagnating is Globalstar’s recent announcement to its investors that the “possible loss” of their largest client could have significant impacts on their profits and overall financial health.

As a result, several voices, including those within, are urging Tim Cook to seriously consider a partnership with Starlink and SpaceX: Elon Musk’s satellite constellation is much larger than Globalstar’s, having recently launched its 10,000th satellite into orbit. Despite the strained relations, Starlink’s overtures are growing more frequent. For several months, satellites launched by Starlink have had the capability to transmit and receive in the mobile phone frequency band, including the one currently used by Apple with Globalstar, which would allow a seamless transition of current iPhones from one network to another. Moreover, Starlink is looking to the future: last month, it acquired the frequency band owned by EchoStar for $17 billion.

Why spend so much on this so-called “S band”? Simply because it offers the best option for providing satellite internet service on smartphones, whether it’s Apple or others, and SpaceX CEO Gwynne Shotwell is already in discussions with chip manufacturers like Qualcomm to incorporate it. The band would enable high-speed internet and communication services globally with just an iPhone, something Globalstar cannot and likely will never be able to do.

Despite the tumultuous relationship between the two companies, Apple is gradually realizing that SpaceX/Starlink is becoming indispensable, and it will be difficult, if not impossible, to offer satellite telephony and internet service on the iPhone without going through Elon Musk’s company, especially now with the acquisition of the S band. Apple, apparently keen on integrating satellite internet into its smartphones for remote areas, is now looking at a deal between the two companies not as a matter of “if” but “when”.