8 ms·

Tell me this isn't because the vision is defense contracting. Are people banking on Space Force here?

by jMyles 9y ago

pacala 9y ago
Crickets
examancer 9y ago
Pretty sure the are just banking on SpaceX dominating the global space launch services market for the next few years. Signs increasingly point to this being a safe bet. The valuation is higher than the annual global launch market, but below what it's projected to reach in the next few years. If SpaceX can maintain their current share of the global market for a few years the valuation may be conservative.
steve_musk 9y ago
I think the main thing is their Starlink satellite internet constellation, which I recently saw was estimated to bring in $30 billion/year once it’s fully operational. They also have basically taken over the satellite launch market, and I think their recent progress on the BFR isn’t hurting.
- Robotbeat 9y ago
  Could be more like hundreds of billions in the very long-term, as they plan to just keep growing it in size, capability, and per-satellite mass. Enabled by BFR. That’d put SpaceX in league with other telecommunications giants. That’s, of course, not the only possible outcome, but that’s why the valuation is so high.
  - planteen 9y ago
    Maybe... but I see the system being bandwidth constrained. If each spacecraft is 20 Gbps and how many will be visible over the USA at a time? 50 or so? So 1 Tbps for the entire country? That's less than the capacity of a single neighborhood in Denver on gigabit fiber. Not to mention the capacity of 4G networks across the country. Some of this smells like the first round of Iridium to me.
    - ethbro 9y ago
      The key point is that, if the satellites are cheap enough, they're a safety valve for surplus rocket supply. Or padding if schedules don't make for full payloads. Essentially seeding their own demand in a market that didn't previously exist (cheaper launch on reused rockets). As a side benefit, they get the ability to put a constellation in orbit (and continue adding to it) at a fraction of the cost of their telecom competitors.
      - Robotbeat 9y ago
        Yeah, if Starlink merely breaks even (and continues to grow), they will have pushed the commercial launch market potentially one or two orders of magnitude larger (in terms of mass) than it is today. It'll help pay for BFR, their Mars rocket. Therefore, if Starlink suffers the same fate as Iridium (but without damaging the rest of SpaceX), that would actually be a big net win. Iridium emerged from bankruptcy, turned a profit and launched replacement satellites and is now in the process of a huge constellation refresh, using SpaceX's reusable rockets. If that happens with Starlink, that would be a complete success for creating launch demand.
    - Robotbeat 9y ago
      That's just the initial system, and they'll be selling globally, not just in the US. It's still about 10 times the aggregate bandwidth of their nearest competitor (OneWeb) plus the later constellation is going to be much larger and more capable. Additionally, there should be about 150-200 satellites above the US in the initial deployment. They also plan to upgrade the satellites themselves (according to SpaceX's Mueller) so they're much larger. That should, in principle, allow them to exceed the per-satellite throughput of GSO birds like Viasat's which are over 1Tbps per bird. They aren't competing with fiber in Denver. They're competing with high-latency and expensive satellite internet in rural areas. It's possible they may eventually dip into the cities a bit if they sell out their capacity and then build out their VLEO constellation (total of 12,000 or so satellites, but in much lower orbits enabling yet lower latency and higher bandwidth). But Iridium's problem wasn't a lack of capacity, it was slow customer acquisition combined with very high interest rates and launch prices. If SpaceX fills up their network with customers to its capacity, they will be just fine.
  - seiferteric 9y ago
    I was thinking recently.. once you have data uplink anywhere on the planet, whats stopping them from blanketing the planet in cell phone towers and taking over that industry as well? They won't be limited by where you can run fiber like the other guys.
    - greglindahl 9y ago
      Providing backhaul for rural cell towers is expected to be a big part of Starlink's business, yes. Same for O3b and Oneweb.
    - hyperpallium 9y ago
      In super high density areas, fibre is going to be cheaper and faster and more easily maintained and upgraded etc than satellites
      - lev99 9y ago
        I think "super high density" is probably hyperbolic. As density increases shared airwaves become more crowded and wired infrastructure becomes cheaper to operate. I can see wired internet being competitive for a long time. Even in places more like St. Louis than Manhattan. I choose where to live because I can have two different fiber connections (for speed and a failsafe). How long will it be before satellite internet offers 2gbps symmetrical with low latency at reasonable prices?
        jjeaff 9y ago
        The use case of someone who needs two gigabit fiber connections to their residence is exceedingly tiny and would have no bearing at all on spacex's market. I can hardly imagine a situation where internet access is so critical at a home that you need two fiber lines anyway. I have probably had 2 hours of downtime in the past 3 years with my cable connection.
        analognoise 9y ago
        Are you camping out at the datacenter again?
scottie_m 9y ago
It’s probably less about fighting in space, and more about rapid transport, and cheaper (and therefore more) sattelites for a number of purposes. It’s hard to imagine that intelligence and military agencies aren’t thrilled with the idea of being able to lift more mass for less money. That’s true for everyone other than defense and espionage though; cheaper launches raise all boats. Fortunately with our level of technological advancement, actually fighting in space is just dumb. Fighting from space could be useful, but would break treaty obligations with other spacefaring, nuclear powers.
- ben_w 9y ago
  I thought the only treaties affecting weapons in space were specific to nuclear explosives?
ChuckMcM 9y ago
No. I think this is people thinking that SpaceX is going to capture more market share from ULA and Ariannespace.
azernik 9y ago
tl;dr No. Commercial launch is a big market, and SpaceX is eating it alive. SpaceX is finally following through on its promises and has put a lot of the technical risk of its strategy in the past. All that risk was priced into old valuations, so with a now-reliable and frequently-launched vehicle in Falcon 9, and successful follow-through on Falcon Heavy (less of a big deal economically than the media brouhaha makes it out to be), that risk has gone down and so the valuation is going up. The launch business is a big [1] (but not enormous) one, and SpaceX has gone from around ~15% to ~45% market share in two years [2]. In my understanding, US DoD launches are a small, but particularly-high-margin subset of that market. [1] $8.8B annually, according to https://www.businesswire.com/news/home/20180116005923/en/Global-Space-Launch-Services-Market-2017-2025-27.18 https://www.businesswire.com/news/home/20180116005923/en/Glo... [2] 2015-2017, according to SpaceX testimony to a Congressional committee: https://www.popularmechanics.com/space/rockets/a27290/one-chart-spacex-dominate-rocket-launches/ https://www.popularmechanics.com/space/rockets/a27290/one-ch...
- sunstone 9y ago
  And then there's the SpaceX space based global internet service coming soon to an orbit near you. They are predicting over 20 billion in revenue by 2025 if I recall correctly. https://www.cringely.com/2018/04/06/the-space-race-is-over-and-spacex-won/ https://www.cringely.com/2018/04/06/the-space-race-is-over-a...
  - chrispeel 9y ago
    I'm in the wireless broadband industry, and no one I know thinks this space-based internet is a good idea. The rest of the world is going to small cells and they are going for a cell the size of a large city? I'm a big fan of SpaceX, I'd prefer they stick to flying tourists and satellites. Railroads and airplanes got their start giving joyrides, why not do the same with space.
    - vincentleeuwen 9y ago
      I don't think SpaceX ever flew tourists. That would be Virgin Galactic.
asdsa5325 9y ago
Yes and no. SpaceX's main revenue generator at the moment is sending satellites (government and non-government) into space. They will likely always get revenue with this, but it's not their end goal for profitability.
bmc7505 9y ago
It’s called Space Fleet dammit!
vasili111 9y ago
Is there anything bad to be defense contractor of your country?
- jlangenauer 9y ago
  A purely "defense" contractor, protecting the country itself? No, nothing wrong with that. But what is euphemistically called "defense" is far more often about offense - attacking those countries and people who displease or are inconvenient to you, making sure the world is structure to suit your* interests, usually at the expense of the interests, and often the lives of people elsewhere in the world. * - In reality, the interests of the elite of your country.
  - vasili111 9y ago
    What about protecting yourself and allies?
    - imtringued 9y ago
      By actively seeking conflict you are increasing the risk of retaliation. That's the opposite of protecting yourself.
      - jononor 9y ago
        But good for business!
- pierre 9y ago
  As a defense contractor, you build stuff that end up killing people. Especially if your country is aggressive toward others / have imperialist view.
  - vasili111 9y ago
    What about if that country especially helps other countries to fight for there freedom and protects them from imperialist view countries and with that saves lives in that countries?

Tell me this isn't because the vision is defense contracting. Are people banking on Space Force here?

by jMyles 9y ago

Tell me this isn't because the vision is defense contracting. Are people banking on Space Force here?

pacala 9y ago

Crickets

examancer 9y ago

Pretty sure the are just banking on SpaceX dominating the global space launch services market for the next few years. Signs increasingly point to this being a safe bet. The valuation is higher than the annual global launch market, but below what it's projected to reach in the next few years. If SpaceX can maintain their current share of the global market for a few years the valuation may be conservative.

steve_musk 9y ago

I think the main thing is their Starlink satellite internet constellation, which I recently saw was estimated to bring in $30 billion/year once it’s fully operational. They also have basically taken over the satellite launch market, and I think their recent progress on the BFR isn’t hurting.

Robotbeat 9y ago
Could be more like hundreds of billions in the very long-term, as they plan to just keep growing it in size, capability, and per-satellite mass. Enabled by BFR. That’d put SpaceX in league with other telecommunications giants. That’s, of course, not the only possible outcome, but that’s why the valuation is so high.
- planteen 9y ago
  Maybe... but I see the system being bandwidth constrained. If each spacecraft is 20 Gbps and how many will be visible over the USA at a time? 50 or so? So 1 Tbps for the entire country? That's less than the capacity of a single neighborhood in Denver on gigabit fiber. Not to mention the capacity of 4G networks across the country. Some of this smells like the first round of Iridium to me.
  - ethbro 9y ago
    The key point is that, if the satellites are cheap enough, they're a safety valve for surplus rocket supply. Or padding if schedules don't make for full payloads. Essentially seeding their own demand in a market that didn't previously exist (cheaper launch on reused rockets). As a side benefit, they get the ability to put a constellation in orbit (and continue adding to it) at a fraction of the cost of their telecom competitors.
    - Robotbeat 9y ago
      Yeah, if Starlink merely breaks even (and continues to grow), they will have pushed the commercial launch market potentially one or two orders of magnitude larger (in terms of mass) than it is today. It'll help pay for BFR, their Mars rocket. Therefore, if Starlink suffers the same fate as Iridium (but without damaging the rest of SpaceX), that would actually be a big net win. Iridium emerged from bankruptcy, turned a profit and launched replacement satellites and is now in the process of a huge constellation refresh, using SpaceX's reusable rockets. If that happens with Starlink, that would be a complete success for creating launch demand.
  - Robotbeat 9y ago
    That's just the initial system, and they'll be selling globally, not just in the US. It's still about 10 times the aggregate bandwidth of their nearest competitor (OneWeb) plus the later constellation is going to be much larger and more capable. Additionally, there should be about 150-200 satellites above the US in the initial deployment. They also plan to upgrade the satellites themselves (according to SpaceX's Mueller) so they're much larger. That should, in principle, allow them to exceed the per-satellite throughput of GSO birds like Viasat's which are over 1Tbps per bird. They aren't competing with fiber in Denver. They're competing with high-latency and expensive satellite internet in rural areas. It's possible they may eventually dip into the cities a bit if they sell out their capacity and then build out their VLEO constellation (total of 12,000 or so satellites, but in much lower orbits enabling yet lower latency and higher bandwidth). But Iridium's problem wasn't a lack of capacity, it was slow customer acquisition combined with very high interest rates and launch prices. If SpaceX fills up their network with customers to its capacity, they will be just fine.
- seiferteric 9y ago
  I was thinking recently.. once you have data uplink anywhere on the planet, whats stopping them from blanketing the planet in cell phone towers and taking over that industry as well? They won't be limited by where you can run fiber like the other guys.
  - greglindahl 9y ago
    Providing backhaul for rural cell towers is expected to be a big part of Starlink's business, yes. Same for O3b and Oneweb.
  - hyperpallium 9y ago
    In super high density areas, fibre is going to be cheaper and faster and more easily maintained and upgraded etc than satellites
    - lev99 9y ago
      I think "super high density" is probably hyperbolic. As density increases shared airwaves become more crowded and wired infrastructure becomes cheaper to operate. I can see wired internet being competitive for a long time. Even in places more like St. Louis than Manhattan. I choose where to live because I can have two different fiber connections (for speed and a failsafe). How long will it be before satellite internet offers 2gbps symmetrical with low latency at reasonable prices?
      - jjeaff 9y ago
        The use case of someone who needs two gigabit fiber connections to their residence is exceedingly tiny and would have no bearing at all on spacex's market. I can hardly imagine a situation where internet access is so critical at a home that you need two fiber lines anyway. I have probably had 2 hours of downtime in the past 3 years with my cable connection.
      - analognoise 9y ago
        Are you camping out at the datacenter again?

scottie_m 9y ago

It’s probably less about fighting in space, and more about rapid transport, and cheaper (and therefore more) sattelites for a number of purposes. It’s hard to imagine that intelligence and military agencies aren’t thrilled with the idea of being able to lift more mass for less money. That’s true for everyone other than defense and espionage though; cheaper launches raise all boats. Fortunately with our level of technological advancement, actually fighting in space is just dumb. Fighting from space could be useful, but would break treaty obligations with other spacefaring, nuclear powers.

ben_w 9y ago
I thought the only treaties affecting weapons in space were specific to nuclear explosives?

ChuckMcM 9y ago

No. I think this is people thinking that SpaceX is going to capture more market share from ULA and Ariannespace.

azernik 9y ago

tl;dr No. Commercial launch is a big market, and SpaceX is eating it alive. SpaceX is finally following through on its promises and has put a lot of the technical risk of its strategy in the past. All that risk was priced into old valuations, so with a now-reliable and frequently-launched vehicle in Falcon 9, and successful follow-through on Falcon Heavy (less of a big deal economically than the media brouhaha makes it out to be), that risk has gone down and so the valuation is going up. The launch business is a big [1] (but not enormous) one, and SpaceX has gone from around ~15% to ~45% market share in two years [2]. In my understanding, US DoD launches are a small, but particularly-high-margin subset of that market. [1] $8.8B annually, according to https://www.businesswire.com/news/home/20180116005923/en/Global-Space-Launch-Services-Market-2017-2025-27.18 https://www.businesswire.com/news/home/20180116005923/en/Glo... [2] 2015-2017, according to SpaceX testimony to a Congressional committee: https://www.popularmechanics.com/space/rockets/a27290/one-chart-spacex-dominate-rocket-launches/ https://www.popularmechanics.com/space/rockets/a27290/one-ch...

sunstone 9y ago
And then there's the SpaceX space based global internet service coming soon to an orbit near you. They are predicting over 20 billion in revenue by 2025 if I recall correctly. https://www.cringely.com/2018/04/06/the-space-race-is-over-and-spacex-won/ https://www.cringely.com/2018/04/06/the-space-race-is-over-a...
- chrispeel 9y ago
  I'm in the wireless broadband industry, and no one I know thinks this space-based internet is a good idea. The rest of the world is going to small cells and they are going for a cell the size of a large city? I'm a big fan of SpaceX, I'd prefer they stick to flying tourists and satellites. Railroads and airplanes got their start giving joyrides, why not do the same with space.
  - vincentleeuwen 9y ago
    I don't think SpaceX ever flew tourists. That would be Virgin Galactic.

asdsa5325 9y ago

Yes and no. SpaceX's main revenue generator at the moment is sending satellites (government and non-government) into space. They will likely always get revenue with this, but it's not their end goal for profitability.

bmc7505 9y ago

It’s called Space Fleet dammit!

vasili111 9y ago

Is there anything bad to be defense contractor of your country?

jlangenauer 9y ago
A purely "defense" contractor, protecting the country itself? No, nothing wrong with that. But what is euphemistically called "defense" is far more often about offense - attacking those countries and people who displease or are inconvenient to you, making sure the world is structure to suit your* interests, usually at the expense of the interests, and often the lives of people elsewhere in the world. * - In reality, the interests of the elite of your country.
- vasili111 9y ago
  What about protecting yourself and allies?
  - imtringued 9y ago
    By actively seeking conflict you are increasing the risk of retaliation. That's the opposite of protecting yourself.
    - jononor 9y ago
      But good for business!
pierre 9y ago
As a defense contractor, you build stuff that end up killing people. Especially if your country is aggressive toward others / have imperialist view.
- vasili111 9y ago
  What about if that country especially helps other countries to fight for there freedom and protects them from imperialist view countries and with that saves lives in that countries?