Apple's space ambitions are real

Last summer, a couple weeks before the iPhone 13 announcement, Chinese market analyst Ming-Chi Kuo wrote that the iPhone 13 would include satellite communication capability. Huh?

This was a bolt from the blue. No other Apple analysts were writing about satellites at that time. And while Ming has a very good track record based on finding out from Apple’s supply chain about likely details in upcoming products, there was nothing about this satellite tip that even made sense, since it didn’t seem to involve hardware at all.

Generally speaking, a Ming tip is a hardware tip, but this one was not.

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Ming’s prediction was widely and quizzically reported, but to my knowledge it was never confirmed by other writers at the time, though I later found an even earlier story on the concept.

And here’s another.

But Ming’s 2021 prediction was denied by Apple. This, in itself, was weird because Apple generally doesn’t react to rumors. But beyond the mere reaction, the way Apple responded to Ming’s prediction was especially odd.

An unattributed leak from Cupertino said that the iPhone 13 definitely would not include satellite communication capability. And even if some iPhone could communicate with satellites, the leak continued, it wouldn’t be offering satellite voice service (which Ming had mentioned), limiting iPhones to satellite text or iMessage.

Apple, which doesn’t reply to rumors, replied to this one with a denial that simultaneously set product expectations where a denial alone would have sufficed.

This was making less and less sense, but it clearly meant there was something happening.

Then came the iPhone 13 launch and Ming was wrong for a change -- no satellite communications. So the Cupertino rumor mill went about its business, Ming’s satellite rumor apparently forgotten.

But not by me.

I decided Ming’s rumor was probably correct and Apple’s denial was very suspect, maybe referring to service launch timing more than the literal facts of the matter. It was even possible that Apple had intended to make the satellite announcement as part of its iPhone 13 launch, but then pulled it for whatever reason.

I began to ask around about both the technical capability of satellite service somehow being able to be easily added to mobile phones and also about Apple. Fortunately I had a hunch where to start, with Qualcomm.

One evening in 1998 at KPBS-TV in San Diego I met Qualcomm co-founder Andy Viterbi and his entire family. They had paid for a new production studio at the San Diego PBS affiliate, which was holding a gala opening where I was part of the entertainment.

The Viterbis were delightful people and I mainly spent the evening with them. Talking with Andy, I learned in passing that Qualcomm was a partner with Loral in a communication satellite venture that featured very low cost and low power data capability -- something I never heard about again.

That satellite venture was Globalstar, which survives today in a somewhat hobbled form (only 24 of 48 satellites survive from the 90s) following bankruptcy, with Qualcomm long out of the picture. So I started looking back at that original Qualcomm project along with any FCC filings from the time.

This column is my report. I’m publishing now because Apple might announce its satellite plans at next week’s World Wide Developer Conference OR at the iPhone 14 announcement in September. Not being an insider, I don’t know the timing for sure, but I am convinced an announcement will be coming soon.

Apple will shortly enter the satellite business by acquiring GlobalStar and its 24 satellites. They will use those 24, plus 24 more satellites that Apple has already commissioned, to offer satellite service for iMessage and Apple’s Find My network just like they implied in their denial last year.

These apps are proxies for Apple entering -- and then dominating -- the Internet of Things (IoT) business. After all, iPhones will give them 1.6 billion points of presence for AirTag detection even on sailboats in the middle of the ocean -- or on the South Pole.

IoT is already a big business that is going to get even bigger even faster because of Apple. Adding that satellite connection to iMessage and Find My offers the possibility of ubiquity for IoT, though only on Apple’s network. Ubiquity (being able to track anything in near real time anywhere on the planet) signals the maturity of IoT, turning it quickly into a $1 TRILLION business -- in this case Apple’s $1 TRILLION business.

In technical terms it is my understanding that the Globalstar constellation has long had an extra 10 megabits-per-second of Block 53 bandwidth that has gone generally unused but available to a specific Qualcomm chipset. This strongly implies that such satellite capability wouldn’t be limited to the iPhone 14 but has probably been there all along for any phones using that chipset.

I might argue that any iPhone could be satellite-upgraded with only a firmware change, which of course is totally under Apple’s control.

But Apple isn’t the only mobile phone company to use Qualcomm chips, which is why I tend to believe Apple has to actually buy Globalstar outright to secure exclusive use of the constellation.

Ten megabits-per-second times 24 satellites is only 240 megabits-per-second, which is plenty for a text network that doesn’t operate in real time, but it’s a joke for voice service even with super-efficient compression protocols like G.729. Apple could do voice as a demonstration, but not as a service: they simply don’t have enough satellites to achieve scale…yet.

While Apple’s stated goals will be only iMessage and Find My, followed by IoT, in the longer run Cupertino plans to dis-intermediate the mobile carriers -- becoming themselves a satellite-based global phone and data company. That will require shifting over additional Globalstar bandwidth plus launching another 300-600 satellites, so it is several years away but IS coming.

Apple will compete not just with every other mobile carrier including Cupertino’s own customers, they will also compete with satellite Internet providers like Starlink, OneWeb, and Amazon’s Kuiper.

Apple can compete with Starlink with so many fewer satellites because GlobalStar has vastly more licensed spectrum than does SpaceX, which has to reuse the same spectrum over and over again with thousands of satellites.

And remember Apple’s service will be mobile while StarLink is more of a fixed wireless solution. Mobile in this case means more valuable.

Apple is very likely to win it all. They’ll win IoT, win voice, win data. They will have the most bandwidth at the lowest cost, running instantly end-to-end on a global ecosystem. Apple will eventually steal as many as TWO BILLION customer connections -- more than twice the size of China Mobile -- the world’s largest wireless carrier. That will be a market cap transfer to Apple of approximately $2 TRILLION (on top of IoT). 

Combine all this new information with Apple’s currently depressed stock price and I’d call it an unambiguous buying opportunity. 

Buy with both hands.

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