Step 1 in SpaceX's great space adventure Saturday. Photo source: SpaceX.

Dragon deployed to Space Station rendezvous orbit.... Rocket made it to drone spaceport ship, but landed hard.... Didn't get good landing/impact video.... Will piece it together from telemetry and ... actual pieces.
-- SpaceX CEO Elon Musk

You have to give Elon Musk credit. He warned us that SpaceX's chances of launching a payload into orbit, then landing its rocket on a floating barge in the Atlantic, were no better than "50% at best." After all, no one else has ever done anything of the sort... ever.

So when SpaceX's rocket did deliver its payload to space Saturday, and the rocket then did land on the "autonomous spaceport drone ship" sent to retrieve it -- just landing too hard -- Musk could easily have declared the mission a success.

Instead, he laughed it off.

"Actual pieces." Ha-ha.
Think about it: SpaceX sent a rocket up 60 miles into space, then bulls-eyed it back down onto a floating barge measuring just 300 feet x 170 feet. Now, Musk could have let that triumph of engineering speak for itself, and left it at that. Instead, he accentuated the negative: The rocket landed too hard. SpaceX needs to do better if it wants its Falcon 9R rocket to evolve into a truly reusable rocketship.

X marked the spot. The tiny, tiny spot. Photo source: SpaceX.

Luckily for fans of SpaceX, Musk intends to do just that. According to Musk, the "hypersonic grid fins" -- or more poetically, "X-wings" -- that help to slow the Falcon's descent and maneuver it to its target "ran out of hydraulic fluid right before landing." So next time, SpaceX will simply add 50% more hydraulic fluid, and see if that does the trick.

And there will be a next time. Musk, you see, is on a mission to change the economics of space exploration and to cut the cost of space launches by as much as 74% off what his rivals at Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) charge the U.S. government for satellite launches. As he testified before the U.S. Senate last year, the Falcon 9R rockets that SpaceX uses cost only $100 million to launch. That's compared to an average launch cost of $380 million at United Launch Alliance, or ULA -- the Boeing-Lockheed joint venture that handles satellite launches for the U.S. government.

What's more, if SpaceX can figure out a way to recover and reuse the rocket engines -- instead of dropping them into the atmosphere to burn up on reentry, as ULA does -- well, that would drop the cost of space launches even further.

How much further? SpaceX puts the cost of its Falcon 9 rocket at about $61.2 million per unit. If SpaceX can teach its rockets to "return to base" on their own power, therefore -- and assuming the cost of repair and maintenance of a recovered rocket isn't excessive -- it could conceivably cut its launch costs by more than half.

$40 million per launch, as opposed to ULA's $380 million.

What it means to investors
$40 million? A price tag that low would easily make SpaceX the "low-cost provider" of satellite launches, significantly undercutting ULA's pricing strategy. At the very least, it would significantly crimp profit margins at Boeing and Lockheed Martin. It could potentially drive the joint venture out of the space business entirely.

After all, according to S&P Capital IQ data, Boeing only earns about an 8.4% operating profit margin on its space business as it is. Lockheed Martin is better off with a 13% operating profit margin. But even Lockheed would feel the sting if SpaceX cuts its launch costs by 50%.

Long story short? SpaceX is no joke. Sooner or later, Elon Musk is going to land his Falcon 9R on a barge -- intact. When that happens, he may end up laughing all the way to the bank.

Watch the SpaceX Falcon 9 almost successfully touch down on its drone barge. Source: SpaceX.