The 2018 summer of satellite IoT – 18 startups, over 1,600 satellites

At least 18 “New Space” start-ups jumping into the Internet of Things (IoT) market, taking advantage of open standards CubeSat technology to drive down the price of IoT monitoring, with some promising to push pricing down to as little as a few dollars per month per device. Over 1,600 satellite dedicated to IoT applications could fill the skies in the next 5 years– IF all get funding and add enough customers.

Satellite play a key role in providing essential connectivity when terrestrial networks stop,  providing the key link to monitor everything from shipping containers moving goods from factories to consumers to thousands of aircraft flying across the globe every day.  Long established firms such as Iridium, GlobalStar, and  ORBCOMM are now being joined by a large wave of entrants able to spin up a business complete with a couple of satellites in orbit for under $5 million.

Who are these satellite #IoT newcomers? Aerial & Maritime, AisTech, Analytical Space, Astrocast, Blink Astro, exactEarth, Fleet Space Technologies, Helios Wire, Hiber Global, Hongyan, Karten Space, Kepler Communications, Lacuna Space, Myriota, Sky and Space Global (SAS), Spire Global, Swarm, and Xingyun are among the declared entrants.

Enabling keys to the new wave of companies are open standards and smaller hardware.  CubeSat standards enable startups to quickly build and test satellites the size of a shoebox or smaller.  With smaller size comes lower drastically lower launch costs.  A typical 3U (30 cm x 10 cm x 10 cm) CubeSat designed to relay data can be built and put into orbit for $1 million or less. A pair of satellites in the proper orbits can provide global coverage with a 12 hour or less service interval to pickup data from a remote location.

In comparison, the new Iridium NEXT constellation cost over $2 billion to build and launch.  However, a the differences between Iridium and a satellite IoT startup are akin to today’s apples in the grocery store as compared to the oranges you might see next spring. Iridium is a going concern,  a public company with an established customer base across multiple market sectors, and provides a global voice and data network with available speeds up to 1 Mbps or more.  Satellite IoT startups, with a few exceptions, are just starting to put hardware into orbit.  Once one or two CubeSats are launched and available, customers can try the service and see if it fits their needs.  Newcomers have a lot of trials and commitments, but few paying customers at this point

Most startups have ambitious plans to launch dozens to hundreds of CubeSats to provide global coverage and rapid data movement. For example, Sky and Space Global plans an initial equatorial belt of around 200 satellites, but could expand services to the entire globe by launching additional satellites.   Adding more satellites can be done by some businesses on an incremental basis, with build and launch financing provided by cash flow from customers.

There’s also a lot of experimentation among newer startups to provide differentiation.  Helios Wire plans to layer blockchain on top of its IoT network to support smart contracts.  Analytical Space and Kepler Communications will use lasers and crosslinks to more quickly move data.  Swarm is pushing the limits on size and licensing, putting four satellites — each about the size of a piece of Texas toast — into orbit without Federal Communications Commission (FCC) approval. (An act that has its further launches on hold until the FCC can figure out an appropriate punishment.

If all the new startups get their way, there will be at least 1,600 small satellites dedicated or supporting IoT services.  But the key word is “If,” since there are a lot of companies jumping into the market due to the relatively low cost of entry.  If the majority of the newcomers wish to survive, they will have to show they can expand existing market reach and create new demand for services.

Doug Mohney

Doug Mohney, a principal at Cidera Analytics, has been working and writing about IT and satellite industries for over 20 years. His real world experience including stints at two start-ups, a commercial internet service provider that went public in 1997 for $150 million and a satellite internet broadband company. Follow him on Twitter at DougonTech or contact him at dmohney139 (at) gmail (dot) com.

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