Apple has taken a significant step to expand its emergency satellite messaging services with a $1.1 billion investment in the American company Globalstar. This collaboration, which dates back to the introduction of the emergency SOS feature with the release of the iPhone 14 in 2022, will allow Apple to strengthen Globalstar’s satellite infrastructure, thus enhancing its ability to manage communication requests from iPhone users in areas without coverage.
The investment also includes Apple acquiring a 20% stake in Globalstar, with an outlay of $400 million through an equity agreement. It is estimated that this funding will significantly contribute to increasing Globalstar’s network capacity for Apple’s emergency messaging service.
Expansion of Satellite Service Network
The agreement, which came into effect on October 29, involves the expansion of Globalstar’s satellite network, referred to as the “Extended Mobile Satellite Services Network” (MSS). This new infrastructure will include a constellation of satellites and an expansion of the terrestrial network, enabling Apple to offer two-way satellite messaging services on its devices starting with iOS 18. For now, the service will be available to iPhone 14 users and later in the United States and Canada, though it is unclear whether Apple will charge for this service once the free period ends in 2025.
Globalstar will retain full control of the network and allocate 85% of the satellite capacity to Apple’s services, reserving the remaining 15% for other customers. Additionally, Globalstar SPE, a subsidiary of Globalstar, will own the network assets necessary for the extended MSS network and will operate under the direct oversight of Globalstar.
Funding and Service Agreement
As part of the agreement, Apple has also agreed to make a series of advance payments intended to fund the infrastructure costs and capital requirements for the extended network. This funding will cover both the construction and launch expenses of the new satellites and the repayment of Globalstar’s debt. Globalstar will also receive an annual fee of $30 million for additional services, contingent upon meeting certain service levels and licensing.
Benefits for Users and Growth Expectations
With this initiative, Apple aims to consolidate its presence in the emergency and communication services sector in areas lacking coverage, a particularly attractive feature for users in rural areas or during emergencies. This feature, initially offering a free period, may turn into a paid service once the free offering expires in November 2025 for the first iPhone 14 users.
On its part, Globalstar expects its relationship with Apple to boost its financial performance, projecting that its annual revenues will double following the launch of the expanded network. The company also plans to seize new business opportunities as the infrastructure solidifies.
This agreement marks a new chapter in the collaboration between Apple and Globalstar, underscoring Apple’s commitment to enhancing the functionalities of its devices, especially in critical communication contexts. With an expanded network and Apple’s financial backing, Globalstar has the potential to position itself as a key player in the satellite services market.
via: GSMarena