It's been over two-and-a-half years since investors heard anything about Apple's (AAPL 1.02%) extraterrestrial interests. In 2017, company had poached a pair of high-level Alphabet execs, John Fenwick and Michael Trela, who specialized in satellite and spacecraft projects at Google. The only likely explanation was that Apple was considering space internet -- delivering data through a constellation of geosynchronous satellites -- to compete with networks that SpaceX, Facebook, and Amazon.com are building.
There's a compelling case for Apple to get into space internet, generating recurring subscription revenue from data plans that could translate into $750 per year (based on leaked estimates for SpaceX's own plans). Here's how Apple's galactic aspirations have evolved in recent years.
Image source: Getty Images.
Looking to the stars
Bloomberg reported yesterday that Apple has been growing its team of space internet engineers to around a dozen employees hired from the aerospace industry. The group, which is led by Fenwick and Trela, is hoping to launch the project within the next five years, although that timeline may change due to the experimental nature of the initiative. Other talent that Apple has added to the team include industry veterans that have experience in wireless technologies, content delivery networks (CDNs), and communications satellites.
Apple could very easily abandon the idea, though CEO Tim Cook is interested in pursuing the strategy, according to the report. In addition to delivering data from the stars, Apple could potentially also leverage the satellites for other uses, such as improving the accuracy of location data that is used for mapping and other functions.
The Apple Network
Steve Jobs famously dreamed of creating a wireless carrier back before Apple launched the original iPhone on AT&T's network. The Apple co-founder envisioned using unlicensed wireless spectrum where Wi-Fi currently operates to create a network with less regulatory burden, but the idea fell through for various reasons.
Back then, spending tens of billions of dollars creating a wireless network would have been far too risky, but with Apple's global iPhone installed base now topping 900 million, the tech giant has much greater visibility into the risks and rewards of owning that part of the value chain.
Cutting wireless carriers out of the loop could further strengthen iPhone loyalty, while offering stronger privacy around user data. U.S. carriers have been selling location data for years, a questionable practice that only received attention this year. Apple is already undermining carriers by expanding its installment plan offerings, which carriers typically utilize to keep customers around. Facebook recently admitted that it still tracks users' locations even when they've turned location services off, which is often partially accomplished by triangulating wireless signals like Wi-Fi or cell tower connections.
Building and launching a constellation of space internet satellites would be incredibly expensive and take many years to deploy, but Apple is one of a few companies that have the financial wherewithal and long-term vision to pull it off. It would also be the perfect addition to Apple's growing portfolio of subscription services. Not everyone needs cloud storage or mobile gaming, but all iPhones need data from somewhere.
