Ark Invest Shares A Model That States SpaceX's Starlink Division Could Have An Addressable Market Of $6 Billion

Evelyn Arevalo by Evelyn Arevalo September 03, 2021

Ark Invest Shares A Model That States SpaceX's Starlink Division Could Have An Addressable Market Of $6 Billion

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Sam Korus, an analyst who works at Cathie Wood's investment management firm Ark Invest, shared a Medium blog about ‘modeling the addressable market’ for SpaceX’s Starlink division. The aerospace company is working to deploy tens of thousands internet-beaming satellites that will provide broadband on a global scale. The Ark Invest analyst created a pair of model graphs that show ranges of prices that customers would be willing to pay for Starlink. If customers pay within $75 to $100 monthly for Starlink internet Korus projects that SpaceX could have an addressable market of $6 billion annually, once the satellite constellation has 12,000 satellites and provides broadband service to approximately 5 million users - according to the graphs featured in the blog he published. The model graph also features a price point of $10 to $20 monthly subscription fee with a similar addressable market, that would require Starlink to operate 12,000 satellites and obtain around 30 million users to achieve approximately $6 billion in annual revenue. Read more details about Ark Invest's Starlink projections and see the graphs in Korus’ blog post, linked below.

 

 

It will take years for SpaceX to achieve launching a total of 12,000 satellites to space. To date, SpaceX has deployed 1,740 satellites to low Earth orbit atop flight-proven Falcon 9 rockets, which is only capable of transporting 60 satellites per mission. It would take over one hundred more launches to eventually reach 12,000 operational satellites. However, SpaceX’s next-generation spacecraft, Starship, will be capable of transporting 400 Starlink satellites on a single mission and place each fleet in its designated operational orbit. Starship will help the company achieve their goal of providing reliable internet globally much sooner. Long-term, they plan to operate over 30,000 satellites.

SpaceX officials recently shared that Starlink is already providing beta internet access to around 100,000 customers across 14 countries and that half-a-million customers already pre-ordered the Starlink terminal via Starlink.com. The Starlink dish antenna to access the space-based internet is priced at $499 USD, plus a monthly internet service fee of $99 USD.

SpaceX founder Elon Musk previously said that the company must pass through a significant amount of negative cash flow before it sees significant profit. Each Starlink terminal actually costs around $1,000 to manufacture, that means they are losing half of their initial investment on each dish antenna unit sold. The company wanted to make its broadband service accessible to the average income person, so it was willing to lose a portion of its investment to obtain more customers. SpaceX President Gwynne Shotwell says they are working to reduce the production cost of the terminal. The company already submitted an application with the Federal Communications Commission (FCC) requesting permission to operate 5 million user terminals in the United States.

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