12 ms·

SpaceX undercut ULA rocket launch pricing by 40 percent: U.S. Air Force

318 points by not_that_noob 10y ago

mey 10y ago
The cynic in me assumes the 40% savings will just get shoveled into the F-35 furnace.
- krschultz 10y ago
  Now that you mention it, isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services?
  - bane 10y ago
    At this point, I'm pretty sure the Stargate must be real and the crazy cost per unit for the F-35 is to hide R&D, construction and launch of a space defense fleet.
    - TheOtherHobbes 10y ago
      I'm thinking space arks for the select few. Otherwise, yes.
    - SEJeff 10y ago
      Prometheus!
    - ihsw 10y ago
      I'm going to believe this instead of rampant corruption and appalling incompetence.
  - Gibbon1 10y ago
    I seem to remember that in the 1950's the US tried to design unitary multi-role fighter and it failed.
    - bediger4000 10y ago
      Not in the 1950s - that would have been the F-4 Phantom, and it was actually quite successful, in production from 1959 to 1979, and probably still flying (albeit totally hotrodded) by lots of air forces. You might be thinking of the F-111, which was supposed to be all things to all services. That was the 1960s. Or maybe the failed A-12, which was supposed to be an attack plane for all services. But you're correct, unitary, multi-role fighters have a bad history.
      - ecnal 10y ago
        Multiroles like the F-18, F-16 (excluding the original worthless LWF proposal), Su-30, Su-35, (today's, though not the original) MiG-29 and Su-27 variants, Typhoon, Tornado, Mirage, Rafale, and nearly every fixed-wing fighter employed by every air force today definitely do not have bad histories--some less stellar than others, but none bad. Multirole capability is primarily a function of the weapons an aircraft can employ. This wasn't true in the 70s when targeting pods were binoculars and effective employment of aircraft in strike roles required decent performance in low-and-slow flight regimes, but we've been living with pods and PGMs coming out of our ears for 25 years now. Design tradeoffs for multiroles today are primarily those of cost and maintainability. You can pay out the ears and get larger twin-engine multiroles that strain logistics and wallets, opt for a single-engine F-16alike multirole that'll do everything nearly as well except for flying really high and really fast, or inexplicably go Eurocanard to pay F-22 prices for sub F-35 capabilities. Anyway, the point is that it's next to impossible not to make a multirole these days even if you're trying; if you can employ weapons with your jet, you're multirole.
        neurotech1 10y ago
        Its about budgets, both on development and on procurement and operational costs. The Su-27 series and the F-15 are relatively expensive jets to procure and operate, and the F-16C (or F-16A MLU) are a good middle ground budget wise. The F-5E/F Tiger [0] was one of the most under appreciated fighters on the market in the 70s and early 80s. The was limited in A/A victories in real combat because of lack of opportunities, although successfully used at TOPGUN and FWS at a low operating cost. Although marketed as a LWF, The F-5 was actually a multi-role aircraft, and used in combat as a strike aircraft. IMO the F/A-50 [1] is the most under-appreciated advanced 4th gen fighter on market. At around $30m its half the cost of a new F-16, although a refurbished F-16 is viable for budget constrained Air Forces. [0] https://en.wikipedia.org/wiki/Northrop_F-5 https://en.wikipedia.org/wiki/Northrop_F-5 [1] https://en.wikipedia.org/wiki/KAI_T-50_Golden_Eagle https://en.wikipedia.org/wiki/KAI_T-50_Golden_Eagle
  - hackuser 10y ago
    > isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services? Not IMHO: The launch is a single, controlled, predictable task; they can choose their exact launch time and location for optimal performance; have extensive quality control checks and engineering, a room full of support engineers, etc; the exact route and timing of the launch is carefully planned ahead of time, etc. The plane has to handle every contingency of war: Take off from wherever and whenever needed, fly anywhere, refuel in mid-air, dodge enemies trying to kill it (can SpaceX or ULA do that?), destroy enemies trying to avoid it, return safely home, etc.
    - scrollaway 10y ago
      > The plane has to handle every contingency of war And all of those problems are (supposedly) solved by the time the plane is being manufactured. Your argument regards R&D costs, not manufacturing costs.
      - gozur88 10y ago
        Every bit of complexity you add makes it more difficult and expensive to manufacture.
    - pricechild 10y ago
      > dodge enemies trying to kill it I thought dogfighting was nolonger required in this day and age?
      - Ftuuky 10y ago
        Not dogfighting but you still have to evade missiles and whatnot.
- levemi 10y ago
  F-35 funding is through congress and involves congressional oversight and is a multi-branch project. It's not just the Airforce that has the F-35.
mdorazio 10y ago
This is exactly how the market is supposed to work - SpaceX is delivering the same service for a lower price and now ULA is finally forced to put serious effort into competing. I'm curious what they intend to do once the reusable first stage program gets going and launch costs drop even further.
- hudibras 10y ago
  You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business. Exciting times...
  - JoshTriplett 10y ago
    > I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business. That would be blatantly anticompetitive dumping, by the textbook definition.
    - hudibras 10y ago
      Well, they wouldn't exactly put it that way in the press release. An alternate end-game would be ULA stringing together a few contract wins, pushing SpaceX to the brink, and then ol' Elon gets a nice offer from Boeing and Lockheed...
      - SEJeff 10y ago
        Elon plays the long game, and I don't think Boeing and Lockheed have any interest in going to Mars. He wouldn't sell from a moral standpoint.
ChuckMcM 10y ago
I like that they "decided to open up the launch contracts" which is code for "Oh we got sued and lost." :-) This is a great move for SpaceX and while painful for ULA the results of solid competition has usually been better product from all suppliers. Let's hope that helps make for better rockets.
zeusk 10y ago
Yet, SpaceX cries about getting undercut by ISRO.
- TrevorJ 10y ago
  Do they? I'd like to read up on that.
- chrisatumd 10y ago
  I haven't heard this before, can you provide a link?
- RubberSpoon 10y ago
  This never happened.
- kirrent 10y ago
  A group which SpaceX is a member of raised concerns that launches by ISRO are allegedly subsidised by the Indian government and therefore the pricing is anticompetitive but have also acknowledged that the market served by the PSLV is badly serviced by American companies. They're not the only ones to raise the same concern but no-one's seriously crying about being undercut. Even as it is, the Falcon 9 and PSLV price per kg to LEO are pretty much the same with newer Falcon 9 winning out slightly.
  - Teever 10y ago
    That seems a little hypocritical in light of the fact that the entire US aeronautics industry was subsidized by the US government. If I have seen further, it is by standing on the shoulders of giants.
tommoor 10y ago
That sweet smell of disruption
hackuser 10y ago
As far as I know, ULA's track record for reliability is much better. Last I read, maybe a few months ago, SpaceX launches had failed 1 in ~19 times, and ULA's failed zero in ~85. I wonder how the Air Force addressed this issue. Perhaps the cost of failure is less than the premium for reliability; perhaps they evaluated reliability based on something other than the track records (e.g., an engineering review); and of course it's political - McCain, Chair of the Senate Armed Services Committee, is reputedly a strong advocate for SpaceX.
- qaq 10y ago
  It's very easy to address even if you assume 5.5% failure rate will remain constant and not decline Space X is still significantly cheaper.
  - hackuser 10y ago
    It depends on the costs of the payloads.
    - sounds 10y ago
      Launch insurance is also included, and for a very good reason.
      - hackuser 10y ago
        It's included in SpaceX's/ULA's/whoever's bid? Insurance doesn't reduce the costs of (whatever event you're insuring), it just evens them out. Instead of paying for (e.g.) 1 failure every 25 launches, you pay for 0.04 failures on every launch (plus the insurance company's profit). So the payloads' costs still apply.
        maaku 10y ago
        For the price differential we're talking about, it works out in the customer's benefit.
wnevets 10y ago
"You know we're sitting on four million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder. Makes you feel good, doesn't it?" - Rockhound from Armageddon
- sb057 10y ago
  Which was based on the following quote from actual real person and astronaut John Glenn: "I guess the question I'm asked the most often is: "When you were sitting in that capsule listening to the count-down, how did you feel?" Well, the answer to that one is easy. I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts -- all built by the lowest bidder on a government contract."
  - dsfuoi 10y ago
    Errata: The lowest bidder that met the mission/project requirements. Cheapest != worst, see SpaceX.
    - pavs 10y ago
      You can meet all the requirements and still make compromise in quality to reach expected price point. Cost doesn't get slashed out of thin air.
markveronda 10y ago
The Colorado-based firm plans to eliminate 875 jobs, or about one-quarter of its workforce, by end-2017, so it can better compete against SpaceX and other rivals, including the Jeff Bezos-backed... Is anyone else here confused by how exactly cutting 1/4 of their workforce will make them more competitive? I get being lean and all that, but still...
- jdavis703 10y ago
  Perhaps these were departments focused on areas that are no longer of competive interest.
- mseebach 10y ago
  You decide on the one or two areas where you have a shot of actually competing, and then you shed as much weight as possible outside those areas. It's like when IBM sold their consumer PC and laptop business to Lenovo. The analysis was that the consumer business was essentially commoditised and IBMs core value proposition is in high-value-added servers and services -- the laptops were a distraction. (In reality, IBMs core value proposition is being IBM, so they could probably have carried on selling ridiculously marked up ThinkPads to the enterprise and government market)
Evolved 10y ago
SpaceX also does it 40% cheaper with over 38% MORE personnel. You'd think the ULA would be able to reduce costs with all these successful launches. I have a sneaking suspicion they increase the cost each time using the rationalization of, "look how many successful launches we have. You're paying for reliability."
- simonh 10y ago
  To be fair SpaceX actually build all of their rocket parts themselves from scratch. ULA just assembles them from parts made by third parties, including the Russian engines.
  - greedo 10y ago
    I don't think this is accurate. With the CRS-7 failure, Musk commented on how they hadn't adequately verified component integrity from a 3rd party supplier.
    - simonh 10y ago
      That's true +1. I'm sure they don't make every integrated circuit and piece of electrical wire. My general point still stands, ULA do much less manufacturing in house by a very large margin.
    - lutorm 10y ago
      It's not accurate; they don't build all parts, just most of them.
    - wolf550e 10y ago
      The unverified components were steel rods. SpaceX manufacture most of the complicated parts, but they buy nuts and bolts. Also, the steel rods were checked, but only statistically, not each one. 1 in more than a thousand failed at 5 times lower than its design strength.
Aleina 10y ago
ULA is responding to competition from SpaceX..
- kilroy123 10y ago
  I truly hope they can bring down the costs, retain their reliability, and compete. If they got into a price war with SpaceX, it will only benefit all of us.
ScottCosta 10y ago
This very wonderful news and meaning travel to space become cheaper and more easy!
Nutmog 10y ago
Wow, the contrast in sentiment between SpaceX vs ULA and Jabil vs Makerbot's Brooklyn factory (https://news.ycombinator.com/item?id=11574215 https://news.ycombinator.com/item?id=11574215) is striking. With SpaceX undercutting the incumbent, people are cheering free market competition but with Jabil undercutting the incumbents, people are complaining about work being done in buildings attached to the wrong pieces of Earth (China) even though in both cases, they cut costs by using genuinely more efficient processes.
codeulike 10y ago
Don't forget that SpaceX had to sue to be allowed to even compete in these bids.
- codeulike 10y ago
  see: https://www.washingtonpost.com/business/economy/elon-musks-spacex-to-drop-lawsuit-against-air-force/2015/01/23/c5e8ff80-a34c-11e4-9f89-561284a573f8_story.html https://www.washingtonpost.com/business/economy/elon-musks-s...
GigabyteCoin 10y ago
I'm curious why they cut prices by 40% right off the bat? Surely they must have had some idea what their competition would charge from historical bids, so why not come in at a 30% or even 20% discount?
- hga 10y ago
  Might be a generally better business strategy going forward, it makes it more difficult to match their price, doesn't get them hooked on higher and ultimately non-sustainable profit margins, etc. Also, when they publish their prices to normal customers (http://www.spacex.com/about/capabilities http://www.spacex.com/about/capabilities), it would look bad if the premium they charge the government for additional costs such as security was too high.
Irreal 10y ago
It's lovely how a small company makes the big ones move their fat asses to do something better, instead of using decades-old technologies.

318 points by not_that_noob 10y ago

mey 10y ago

The cynic in me assumes the 40% savings will just get shoveled into the F-35 furnace.

krschultz 10y ago
Now that you mention it, isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services?
- bane 10y ago
  At this point, I'm pretty sure the Stargate must be real and the crazy cost per unit for the F-35 is to hide R&D, construction and launch of a space defense fleet.
  - TheOtherHobbes 10y ago
    I'm thinking space arks for the select few. Otherwise, yes.
  - SEJeff 10y ago
    Prometheus!
  - ihsw 10y ago
    I'm going to believe this instead of rampant corruption and appalling incompetence.
- Gibbon1 10y ago
  I seem to remember that in the 1950's the US tried to design unitary multi-role fighter and it failed.
  - bediger4000 10y ago
    Not in the 1950s - that would have been the F-4 Phantom, and it was actually quite successful, in production from 1959 to 1979, and probably still flying (albeit totally hotrodded) by lots of air forces. You might be thinking of the F-111, which was supposed to be all things to all services. That was the 1960s. Or maybe the failed A-12, which was supposed to be an attack plane for all services. But you're correct, unitary, multi-role fighters have a bad history.
    - ecnal 10y ago
      Multiroles like the F-18, F-16 (excluding the original worthless LWF proposal), Su-30, Su-35, (today's, though not the original) MiG-29 and Su-27 variants, Typhoon, Tornado, Mirage, Rafale, and nearly every fixed-wing fighter employed by every air force today definitely do not have bad histories--some less stellar than others, but none bad. Multirole capability is primarily a function of the weapons an aircraft can employ. This wasn't true in the 70s when targeting pods were binoculars and effective employment of aircraft in strike roles required decent performance in low-and-slow flight regimes, but we've been living with pods and PGMs coming out of our ears for 25 years now. Design tradeoffs for multiroles today are primarily those of cost and maintainability. You can pay out the ears and get larger twin-engine multiroles that strain logistics and wallets, opt for a single-engine F-16alike multirole that'll do everything nearly as well except for flying really high and really fast, or inexplicably go Eurocanard to pay F-22 prices for sub F-35 capabilities. Anyway, the point is that it's next to impossible not to make a multirole these days even if you're trying; if you can employ weapons with your jet, you're multirole.
      - neurotech1 10y ago
        Its about budgets, both on development and on procurement and operational costs. The Su-27 series and the F-15 are relatively expensive jets to procure and operate, and the F-16C (or F-16A MLU) are a good middle ground budget wise. The F-5E/F Tiger [0] was one of the most under appreciated fighters on the market in the 70s and early 80s. The was limited in A/A victories in real combat because of lack of opportunities, although successfully used at TOPGUN and FWS at a low operating cost. Although marketed as a LWF, The F-5 was actually a multi-role aircraft, and used in combat as a strike aircraft. IMO the F/A-50 [1] is the most under-appreciated advanced 4th gen fighter on market. At around $30m its half the cost of a new F-16, although a refurbished F-16 is viable for budget constrained Air Forces. [0] https://en.wikipedia.org/wiki/Northrop_F-5 https://en.wikipedia.org/wiki/Northrop_F-5 [1] https://en.wikipedia.org/wiki/KAI_T-50_Golden_Eagle https://en.wikipedia.org/wiki/KAI_T-50_Golden_Eagle
- hackuser 10y ago
  > isn't it crazy that manufacturing a single F-35 costs more than an entire satellite launch including support services? Not IMHO: The launch is a single, controlled, predictable task; they can choose their exact launch time and location for optimal performance; have extensive quality control checks and engineering, a room full of support engineers, etc; the exact route and timing of the launch is carefully planned ahead of time, etc. The plane has to handle every contingency of war: Take off from wherever and whenever needed, fly anywhere, refuel in mid-air, dodge enemies trying to kill it (can SpaceX or ULA do that?), destroy enemies trying to avoid it, return safely home, etc.
  - scrollaway 10y ago
    > The plane has to handle every contingency of war And all of those problems are (supposedly) solved by the time the plane is being manufactured. Your argument regards R&D costs, not manufacturing costs.
    - gozur88 10y ago
      Every bit of complexity you add makes it more difficult and expensive to manufacture.
  - pricechild 10y ago
    > dodge enemies trying to kill it I thought dogfighting was nolonger required in this day and age?
    - Ftuuky 10y ago
      Not dogfighting but you still have to evade missiles and whatnot.
levemi 10y ago
F-35 funding is through congress and involves congressional oversight and is a multi-branch project. It's not just the Airforce that has the F-35.

mdorazio 10y ago

This is exactly how the market is supposed to work - SpaceX is delivering the same service for a lower price and now ULA is finally forced to put serious effort into competing. I'm curious what they intend to do once the reusable first stage program gets going and launch costs drop even further.

hudibras 10y ago
You're exactly right, except that I don't think ULA is going to have much trouble matching SpaceX's prices. They were in a monopoly situation before where they could name their own price (not really, but close enough). I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business. Exciting times...
- JoshTriplett 10y ago
  > I could see even ULA's pricing pendulum swing all the other way: they could start bidding for contracts at a loss, using their other business sectors to prop up the space division until they drive SpaceX out of business. That would be blatantly anticompetitive dumping, by the textbook definition.
  - hudibras 10y ago
    Well, they wouldn't exactly put it that way in the press release. An alternate end-game would be ULA stringing together a few contract wins, pushing SpaceX to the brink, and then ol' Elon gets a nice offer from Boeing and Lockheed...
    - SEJeff 10y ago
      Elon plays the long game, and I don't think Boeing and Lockheed have any interest in going to Mars. He wouldn't sell from a moral standpoint.

ChuckMcM 10y ago

I like that they "decided to open up the launch contracts" which is code for "Oh we got sued and lost." :-) This is a great move for SpaceX and while painful for ULA the results of solid competition has usually been better product from all suppliers. Let's hope that helps make for better rockets.

zeusk 10y ago

Yet, SpaceX cries about getting undercut by ISRO.

TrevorJ 10y ago
Do they? I'd like to read up on that.
chrisatumd 10y ago
I haven't heard this before, can you provide a link?
RubberSpoon 10y ago
This never happened.
kirrent 10y ago
A group which SpaceX is a member of raised concerns that launches by ISRO are allegedly subsidised by the Indian government and therefore the pricing is anticompetitive but have also acknowledged that the market served by the PSLV is badly serviced by American companies. They're not the only ones to raise the same concern but no-one's seriously crying about being undercut. Even as it is, the Falcon 9 and PSLV price per kg to LEO are pretty much the same with newer Falcon 9 winning out slightly.
- Teever 10y ago
  That seems a little hypocritical in light of the fact that the entire US aeronautics industry was subsidized by the US government. If I have seen further, it is by standing on the shoulders of giants.

tommoor 10y ago

That sweet smell of disruption

hackuser 10y ago

As far as I know, ULA's track record for reliability is much better. Last I read, maybe a few months ago, SpaceX launches had failed 1 in ~19 times, and ULA's failed zero in ~85. I wonder how the Air Force addressed this issue. Perhaps the cost of failure is less than the premium for reliability; perhaps they evaluated reliability based on something other than the track records (e.g., an engineering review); and of course it's political - McCain, Chair of the Senate Armed Services Committee, is reputedly a strong advocate for SpaceX.

qaq 10y ago
It's very easy to address even if you assume 5.5% failure rate will remain constant and not decline Space X is still significantly cheaper.
- hackuser 10y ago
  It depends on the costs of the payloads.
  - sounds 10y ago
    Launch insurance is also included, and for a very good reason.
    - hackuser 10y ago
      It's included in SpaceX's/ULA's/whoever's bid? Insurance doesn't reduce the costs of (whatever event you're insuring), it just evens them out. Instead of paying for (e.g.) 1 failure every 25 launches, you pay for 0.04 failures on every launch (plus the insurance company's profit). So the payloads' costs still apply.
      - maaku 10y ago
        For the price differential we're talking about, it works out in the customer's benefit.

wnevets 10y ago

"You know we're sitting on four million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder. Makes you feel good, doesn't it?" - Rockhound from Armageddon

sb057 10y ago
Which was based on the following quote from actual real person and astronaut John Glenn: "I guess the question I'm asked the most often is: "When you were sitting in that capsule listening to the count-down, how did you feel?" Well, the answer to that one is easy. I felt exactly how you would feel if you were getting ready to launch and knew you were sitting on top of two million parts -- all built by the lowest bidder on a government contract."
- dsfuoi 10y ago
  Errata: The lowest bidder that met the mission/project requirements. Cheapest != worst, see SpaceX.
  - pavs 10y ago
    You can meet all the requirements and still make compromise in quality to reach expected price point. Cost doesn't get slashed out of thin air.

markveronda 10y ago

The Colorado-based firm plans to eliminate 875 jobs, or about one-quarter of its workforce, by end-2017, so it can better compete against SpaceX and other rivals, including the Jeff Bezos-backed... Is anyone else here confused by how exactly cutting 1/4 of their workforce will make them more competitive? I get being lean and all that, but still...

jdavis703 10y ago
Perhaps these were departments focused on areas that are no longer of competive interest.
mseebach 10y ago
You decide on the one or two areas where you have a shot of actually competing, and then you shed as much weight as possible outside those areas. It's like when IBM sold their consumer PC and laptop business to Lenovo. The analysis was that the consumer business was essentially commoditised and IBMs core value proposition is in high-value-added servers and services -- the laptops were a distraction. (In reality, IBMs core value proposition is being IBM, so they could probably have carried on selling ridiculously marked up ThinkPads to the enterprise and government market)

Evolved 10y ago

SpaceX also does it 40% cheaper with over 38% MORE personnel. You'd think the ULA would be able to reduce costs with all these successful launches. I have a sneaking suspicion they increase the cost each time using the rationalization of, "look how many successful launches we have. You're paying for reliability."

simonh 10y ago
To be fair SpaceX actually build all of their rocket parts themselves from scratch. ULA just assembles them from parts made by third parties, including the Russian engines.
- greedo 10y ago
  I don't think this is accurate. With the CRS-7 failure, Musk commented on how they hadn't adequately verified component integrity from a 3rd party supplier.
  - simonh 10y ago
    That's true +1. I'm sure they don't make every integrated circuit and piece of electrical wire. My general point still stands, ULA do much less manufacturing in house by a very large margin.
  - lutorm 10y ago
    It's not accurate; they don't build all parts, just most of them.
  - wolf550e 10y ago
    The unverified components were steel rods. SpaceX manufacture most of the complicated parts, but they buy nuts and bolts. Also, the steel rods were checked, but only statistically, not each one. 1 in more than a thousand failed at 5 times lower than its design strength.

Aleina 10y ago

ULA is responding to competition from SpaceX..

kilroy123 10y ago
I truly hope they can bring down the costs, retain their reliability, and compete. If they got into a price war with SpaceX, it will only benefit all of us.

ScottCosta 10y ago

This very wonderful news and meaning travel to space become cheaper and more easy!

Nutmog 10y ago

Wow, the contrast in sentiment between SpaceX vs ULA and Jabil vs Makerbot's Brooklyn factory (https://news.ycombinator.com/item?id=11574215 https://news.ycombinator.com/item?id=11574215) is striking. With SpaceX undercutting the incumbent, people are cheering free market competition but with Jabil undercutting the incumbents, people are complaining about work being done in buildings attached to the wrong pieces of Earth (China) even though in both cases, they cut costs by using genuinely more efficient processes.

codeulike 10y ago

Don't forget that SpaceX had to sue to be allowed to even compete in these bids.

codeulike 10y ago
see: https://www.washingtonpost.com/business/economy/elon-musks-spacex-to-drop-lawsuit-against-air-force/2015/01/23/c5e8ff80-a34c-11e4-9f89-561284a573f8_story.html https://www.washingtonpost.com/business/economy/elon-musks-s...

GigabyteCoin 10y ago

I'm curious why they cut prices by 40% right off the bat? Surely they must have had some idea what their competition would charge from historical bids, so why not come in at a 30% or even 20% discount?

hga 10y ago
Might be a generally better business strategy going forward, it makes it more difficult to match their price, doesn't get them hooked on higher and ultimately non-sustainable profit margins, etc. Also, when they publish their prices to normal customers (http://www.spacex.com/about/capabilities http://www.spacex.com/about/capabilities), it would look bad if the premium they charge the government for additional costs such as security was too high.

Irreal 10y ago

It's lovely how a small company makes the big ones move their fat asses to do something better, instead of using decades-old technologies.