In the satellite world, what goes up usually doesn’t come back. The same cannot be said for satellite stock.
Apple Inc. An example is the introduction of the iPhone 13 family by earlier this week. Late last month, influential analyst at TFI International Securities, Ming-Chi Kuo, predicted that the next iPhone would include the ability to connect directly to satellite networks.
Mr. Kuo cited Globalstar, which operates a low-Earth-orbit satellite network, as a potential partner, sending that company’s shares up 64% in a single day — over the past three months. More than 24 times their average daily amount. . Rival satellite network operator Iridium jumped 15% in its shares, while AST Spacemobile’s stock gained about 13%.
But Apple made no mention of such potential, sending all three stocks back down during its launch event on Tuesday. But they all remain above their pre-rumored levels, especially Globalstar—which was up 24% as of Thursday’s end. NS. Mike Crawford of Riley Securities noted that Globalstar has a “mysterious project” in the works, which has so far received approximately $90 million in payments from an unnamed client.
Globalstar said in its final 10-K filing in March that the project, which began in early 2020, includes “an assessment of the potential service utilization of some of our assets and capacity.” Mr Crawford does not speculate that Apple is the customer, but he does point out that both Apple and Google have intellectual property related to the “dual-mode satellite cellular telephone system”.
Still, building an iPhone that can connect to satellites is no slam dunk. Satellite phones typically require larger antennas—presenting major technical and aesthetic challenges for a company like Apple, which places a premium on wider designs.
And even coming with a powerful-enough internal antenna creates a real estate problem within the device itself. Ed Snyder, an analyst at Charter Equity specializing in radio-frequency chip technologies, said in an August 30 report that placing such a large transmit signal close to the signal powering the phone’s GPS capabilities “could cause problems.” There’s a recipe.”
It is not clear whether the Globalstar project also includes a phone-based service. And even if it does, there is also the question of whether such a move would be worth the additional cost and technical trade-offs.
Satellite services are typically used for voice calls in areas with traditional cell coverage. Smartphones, in contrast, are mostly used as hand-held Internet terminals, for which they rely on superfast data networks.
Also note that Apple hasn’t had a bang historically in terms of the network capability of its devices. Its first iPhone was a 2G device in 2007 when 3G services were already widely available, and several handset makers launched devices for the latest 5G networks before Apple’s late last year.
Apple could always break from that tradition. And its rapidly increasing R&D spending — rising an average of 18% annually over the past five years to more than $21 billion — suggests that the company has plenty of cooking ideas. But satellite investors will have to wait at least another year to see if the iPhone will hook them. It could prove to be a long time to keep some of these stocks in orbit.
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