Everything we know or guess about the Apple/Globalstar deal
I’ve been attempting to unpack Apple’s deal for satellite based emergency calling with GlobalStar. I don’t suppose I have learned too much that’s new but thought it might be of interest to put it all down. Everything that follows is based on material that is public.
What Apple and Globalstar are doing
Following years of speculation, Apple last week said that iPhone 14 users will gain a new feature that lets them send short distress messages and location data to emergency services using satellite when stranded in places that are off the cellular grid.
Apple has worked on this feature for years. It allows antennas to connect directly to a satellite, enabling messaging with emergency services when outside of cellular or Wi-Fi coverage. The process can take a little time, but it gives users a chance to find help when they are in need of it.
The service will launch in the US and Canada in November but may expand to additional nations later. Apple warned the service “might not work in places above 62° latitude, such as northern parts of Canada and Alaska.”
I don’t think service provision will expand too quickly, in part because a Globalstar SEC filing expressly refers to a new ‘spare satellite’ launched under what appear to be terms of the Apple deal at a cost of tens of millions in June. At the same time Apple isn’t alone and most big carriers are now exploring the space.
Interestingly, Apple already says Emergency SOS will be unavailable to iPhones purchased in mainland China, Hong Kong, or Macao.
Apple isn’t the only smartphone firm exploring use of satellite. Many others are exploring the opportunity, hence the recent deal between T Mobile and Starling. This activity makes sense given that the 5G standard already makes use of some bandwidth also supported by space communications and will make more sense in time as the evolution of 6G begins. We know, because Apple told us, how it is investing in next-generation networking solutions.
What I know part one
I’ve looked at media reports and various SEC filings from both companies. I’ve attempted to untangle the opaque language used around the arrangement. Some of the more important elements to the arrangement that are in these public and available documents are:
- Apple has reached a ‘Lock Up and Right of First Offer Agreement’ under which over half of the controlling stock of GlobalStar cannot easily be sold to other entities without Apple’s approval.
- Various online reports claim Apple and GlobalStar began discussing the arrangement as far back as 2019. I’ve found a reference to a Key Terms Agreement signed in 2019 which I’ve been unable to track down. That reference is buried in a single line in the ‘Lock Up and Right of First Offer Agreement’ which is linked to in one filing.
- If I understand things correctly, the terms also included the construction of ten new gateways worldwide and the launch of a spare satellite in June.
- The agreement is a multi-year arrangement.
- The deal was agreed and signed by or on behalf of Apple’s VP Procurement, Tony Blevins. He’s not precisely a household name, but a 2020 WSJ report shows that he negotiates some of Apple’s most critical deals.
- Speaking subsequently to the deal, GlobalStar executive Chairman Jay Monroe claimed the deal would really kick in this autumn and that competing services will take years to catch up.
Additional details
Apple’s deal with GlobalStar means it is taking 85% of the satellite company’s network capacity, which means other companies can’t make use of GlobalStar’s network. This puts a big limit on competitors, as there are only one or perhaps two companies that have both satellite infrastructure and wireless networks compatible with smartphones.
Apple’s deal means GlobalStar must provide and maintain all resources, provide Apple with priority access, and must deliver certain Service Level Agreements. Apple can also recoup any advance payments it makes.
Hot hints from FierceWireless
Speaking to Fiercewireless, GlobalStar CEO David Kagan hinted that a great deal of work has already taken place with Apple. While he didn’t discuss that work, the report suggests he thinks it has changed the satellite industry forever.
The report also notes some spectrum points, such as how Apple’s service doesn’t rely on a wavelength called Band 53 (n53), championed by GlobalStar. That small nugget of detail may turn out to be more meaningful as that report also claims Apple has agreed to include Band 53 for potential terrestrial use.
In a SEC filing, GlobalStar described the band as providing a “pathway for our terrestrial spectrum to be integrated into handset and infrastructure ecosystems,” promising that “additional follow on 3GPP specifications and approvals are expected in the future.”
‘High-density dedicated networks’
Globalstar’s SEC filing also states:
“We expect our terrestrial authority will allow future partners to develop high-density dedicated networks using the TD-LTE and 5G protocols for private networks as well as the densification of cellular networks. We believe that our offering has competitive advantages over other conventional commercial spectrum allocations. Such other allocations must meet minimum population coverage requirements, which effectively prohibit the exclusive use of most carrier spectrum for dedicated small cell deployments. In addition, low frequency carrier spectrum is not physically well suited to high-density small cell topologies, and mmWave spectrum is subject to range and attenuation limitations. We believe that our licensed 2.4 GHz band holds physical, regulatory and ecosystem qualities that distinguishes it from other current and anticipated allocations, and that it is well positioned to balance favorable range, capacity and attenuation characteristics.”
Make of that what you will, but one big customer using the spectrum is Nokia at the Port of Seattle.
Joining the IoT dots?
To me, this suggests opportunities for the partners to offer private global communications bandwidth for future connected devices. GlobalStar already offers IoT solutions and says it will continue to pursue these with the fraction of its bandwidth Apple hasn’t tied up.
Please forgive me, but I cannot help speculating that Apple’s ongoing determination to put as much machine intelligence as possible within individual endpoints isn’t just good security practise, but may (speculation klaxon) also limit the amount of bandwidth future smart devices from the company require. That kind of bandwidth-sipping approach to AI means a little bandwidth goes a long way for any connected device that may rely on n53 support when used in remote areas lacking other forms of coverage.
(There’s much more to this, so do take a look at the FierceWireless report).
Those who pay the costs take the prize
The agreement also commits Apple to paying 95% of the capital costs associated with the service. That suggests it is funding 95% of the costs of a new generation of satellites Globalstar ordered from MDA Ltdand Rocket Lab earlier this year, according to SpaceNews.
A June GlobalStar SEC filing describes a $73.5 million item for “satellite construction assets acquired through vendor financing arrangement,” but it isn’t known if that relates to the Apple deal. What we do know is that those satellites won’t be in the air until around 2025. All the satellites are “expected to be launched by the end of 2025,” a SEC filing states.
Add it up and it appears Apple has a sort of hold of a controlling slice of GlobalStar stock and is investing in company/network expansion, while also corralling 85% of the available capacity.
The sum of the parts seems much, much bigger
I find it difficult to accept that the aim here is as humble – albeit impressive – as simply support for Emergency SOS over satellite. Apple did promise something “Far Out”, after all. So, I don’t think that is the big picture. There has simply been way too much work, a great deal of secrecy, and a huge commitment of cash.
When announcing the deal, Apple did say it would offer this service free with iPhones for the next two years, suggesting that by around fall 2024 the significance of what it is cooking up may become clearer. As noted above, Globalstar is expected to get the rest of its newly acquired satellites (partly purchased by Apple) into orbit (“by 2025”).
That’s going to massively increase available satellite bandwidth.
I think it’s all cooking up to be jolly interesting.
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