Apple becomes a key player in the satellite communications industry by introducing a feature that allows the iPhone 14 and 14 Pro to send Emergency SOS messages via satellites.
Apple has partnered with Globalstar for satellite operations and plans to use the company's 24-satellite constellation for its service, confirming long rumoured plans for Band 53 / n53 communications.
Ashley Williams, the company's satellite modelling and simulation manager said:
We’ve set up relay centers staffed with highly-trained emergency specialists ready to get your texts and call an emergency service provider on your behalf.
Apple has spent the last few years "infrastructure innovation" to implement this feature. And the company intends to continue developing it. Apple will allocate $450 million from its special fund to develop satellite infrastructure to support the service, which is currently only available in the US and Canada.
Tim Farrar, an analyst at Telecom, Media and Finance Associates, a consulting and research firm specialising in satellite communications and telecommunications, said he believes satellites will cost Apple up to $50 million by 2026. Farrar also noted that Apple appears to be paying a "relatively low price" for the service. "Globalstar had revenues of $124 million last year. This is scheduled to go up to $185-$230 million in 2023," he said, noting that Apple will pay Globalstar about $110 million next year. Apple announced that the service will be free for users for the first two years, but did not say how much it will cost after that.
According to analyst Harold Feld, Apple's agreement with the satellite provider gives it the right to "veto decisions that would negatively impact Globalstar’s ability to fulfill its obligations to Apple." This creates a regulatory situation where Apple becomes a co-owner of the company. If a company has a sufficiently high level of investment or control over a company with a spectrum licence, the FCC considers it to have an "attributable interest." However, Apple has not yet reached that level, and if Apple wants to increase its investment in Globalstar or gain control of it, it may have to seek regulatory approval.
Using the new technology gives Apple an opportunity to influence the emerging satellite communications market. Such a price could put pressure on other satellite operators. "T-Mobile might not be willing to pay more than $100 million per year," said Farrar, referring to the operator's recent announcement that it is working with SpaceX to provide emergency text messaging services in the US and planning to start testing the service next year.