By Joey Roulette
WASHINGTON, Feb 5 (Reuters) – With a SpaceX IPO expected this year, the company has plans for its revenue-generating Starlink business that could expand its reach into new markets, including a Starlink phone, direct-to-device internet and a space-tracking service, sources familiar with the matter said.
The star of Elon Musk’s empire, SpaceX is quickly expanding on the momentum with its speedy satellite production line with Starlink and its reusable rockets. Those two forces would help realize Musk’s plans to build data centers that orbit Earth, a costly bet underpinning SpaceX’s recently announced merger with xAI.
The plans include making a mobile device connected to its Starlink satellite internet constellation that could rival smartphones, according to three people familiar with the plans.
Specifics on the device’s design or when Musk plans to develop the product are unclear. Starlink in recent years has worked with T-Mobile to bring Starlink internet directly into mobile phones on that network, a different effort than SpaceX producing a phone itself.
Musk’s satellite and rocket company has had the mobile phone plans for years, the people said. Responding last week to an X user musing over a hypothetical Starlink phone, the SpaceX CEO said, “Not out of the question at some point.”
“It would be a very different device than current phones,” Musk said. “Optimized purely for running max performance/watt neural nets,” referring to the brain-like computing hardware behind artificial intelligence.
STARLINK DRIVES SPACEX REVENUE
Starlink is a vital profit generator for SpaceX. Last year, the company generated about $8 billion in profit on $15 billion to $16 billion of revenue, two people familiar with the company’s results said, with Starlink as the main revenue driver, accounting for about 50% to 80% of the total.
SpaceX’s biggest investment yet into the cellular communications arena came last year with its $19.6 billion purchase of satellite spectrum from EchoStar. While some view that as a threat to Mobile Network Operators (MNOs) like Verizon and AT&T, SpaceX has so far positioned itself as complementary to those networks.
“It will likely be hard for Starlink to make a phone and compete with the MNOs – the other MNOs would avoid using it,” said Armand Musey, president of Summit Ridge Group. “It would be like GM making car tires and trying to sell them to the other auto manufacturers.”
SpaceX is the world’s largest satellite operator with over 9 million users of the broadband internet service, which also has government contracts associated with Starlink and military-grade satellite network Starshield.
SpaceX producing a mobile device would be a significant expansion of its lineup of products tied to Starlink, which has grown into a 9,500-satellite internet network in six years, opening doors to new markets.
Roughly 650 of the Starlink satellites in space were built for SpaceX’s fledgling direct-to-device business. The goal, Musk wrote in a SpaceX blog post on Monday, is to eventually “deliver full cellular coverage everywhere on Earth.”
Like the AI data center idea, the expansion of Starlink as a cellular-like system depends heavily on its Starship rocket, which will launch bigger batches of upgraded Starlink satellites powerful enough to beam greater internet services into mobile phones.
Musk says each future Starship launch carrying Starlink satellites will expand the constellation’s capacity by “more than 20 times.”
While the market remains young, analysts estimate the direct-to-device market could be worth billions of dollars in the next several years.
SpaceX in October filed to trademark “Starlink Mobile.” And this year it filed patents for technologies that seek to improve Starlink’s ability to connect with small and moving devices on land that are not just Starlink user terminals.
STARGAZE SPACE-TRACKING SERVICE
Further building on its Starlink network, last week SpaceX announced a new product called Stargaze, which will use the tiny maneuvering cameras already installed on Starlink satellites to monitor the increasing traffic in Earth’s lower orbits, where no international standards exist for satellite traffic management.
While SpaceX said it will provide some of the data for free to satellite operators, the business could be attractive to the U.S. government, where the Pentagon and the civil Office of Space Commerce are improving their space-tracking abilities with a handful of U.S. space-tracking startups using ground-based radar, as well as SpaceX.
The prospect of SpaceX leveraging Starlink for tracking in low-Earth orbit has prompted concern from some in the space-tracking industry that a key U.S. government system could rely too heavily on the company.
Richard DalBello, former head of the Office of Space Commerce, said Stargaze could provide speedy space-tracking services for low-Earth orbit systems, but suggested the government should not solely rely on it.
(Reporting by Joey Roulette; Editing by Chris Sanders and Lisa Shumaker)
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