On Thursday, May 25, 2017, Rocket Lab made history. (Again.)

Blasting off from Launch Complex 1 on the Mahia Peninsula in New Zealand at 4:20 p.m. local time, Rocket Lab's experimental "Electron" small rocket came within inches (or, more accurately, a few miles per hour) of achieving orbital speed -- the first "orbital-class" small rocket ever to launch from ground to space and reach such heights (both figurative and literal).

Comprising two stages topped by a payload fairing, Electron is a disposable rocket (as opposed to SpaceX's much larger Falcon 9 reusable rockets, for example). But it's a much different kind of a rocket from the gigantic but also disposable Atlas V and Delta IV rockets that Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) launch through their United Launch Alliance endeavor. Whereas those rockets primarily loft multiton government-owned satellites into orbit, Rocket Lab's 56-foot tall Electron is designed to serve the fast-growing market for small satellite launches.

Its total payload capacity: 330 pounds.

Electron rocket launch.

If this Electron rocket looks small, that's because it is small. Image source: Rocket Lab.

Dropping the price of spaceflight back to Earth

Rocket Lab's prices are also a bit different from what launch customers have been accustomed to paying. Whereas ULA charges about $350 million for a launch aboard the Boeing-designed Delta IV, and a bit less than half that for a ride on the Lockheed Martin-designed Atlas V, Rocket Lab plans to charge just $6.5 million for Electron.

As explained on its website, Electron can carry a single large payload into orbit, or pack itself full of much smaller microsatellites -- launching for as little as $77,000 per sat -- on "ridesharing" missions. In Q4 2017, for example, Rocket Lab has a cubesat mission planned which will carry:

  • four small "1U" cubesats into orbit at $77,000 a pop, plus ...
  • ten 3U cubesats (three times the size of a 1U, and more than three times the cost at $240,000 each) ...
  • four even larger 6U cubesats costing $480,000 each ...
  • and a pair of 12U cubesats, each priced at $960,000.

That's 20 satellites in all.

But if you want a ride on this rocket, you'd better act fast. The Q4 mission is already 90% booked -- and all missions launching sooner are already 100% full.

A new way to launch a new wave of satellites

With rocket prices so much below their usual levels, Rocket Lab CEO Peter Beck predicts his Electrons will soon be sending a whole host of small satellites into orbit, providing Earthlings with "improved weather reporting, Internet from space, natural disaster prediction, up-to-date maritime data as well as search and rescue services," he said in the latest press release.

Before that can happen, Rocket Lab will need to conduct at least two more test flights (the next one will take place probably in "a couple of months," says Beck). Once it's worked the final kinks out of its design, though, Rocket Lab plans to launch about one rocket per week -- more than 50 launches per year. (And it's licensed by New Zealand to launch as often as 120 times per year.) To put those numbers in context, says Beck, "there were 22 launches last year from the United States, and 82 internationally."

In other words, Rocket Lab could soon single-handedly expand the global space market by nearly 50%.

Competition in the wings

Not that Rocket Lab will be acting single-handedly, of course. For one thing, Rocket Lab has financial backing from none other than Lockheed Martin itself. For another, while Rocket Lab looks likely to become the first small rocket company to reach orbit, it's not the only company trying to get there.

Running neck and neck with Rocket Lab in this race is Tucson, Arizona-based Vector, which earlier this month conducted a test flight of its own Vector-R rocket. That one only went up about a mile, but it performed as expected, and Vector is planning another launch from Georgia's new Camden Spaceport this summer. At the same time, Virgin Orbit is making progress with its air-launched satellite delivery system, dubbed LauncherOne.

If everything works out as planned, this time next year it's entirely possible we will see not one, but two or even three privately owned small satellite launchers rising up to challenge Boeing's and Lockheed Martin's dominance in spaceflight. Exciting times.

Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.