tech
Amazon's bet on satellites is expensive and faces fierce competition. It also just might work
Leo has the potential to "be a huge business out of nowhere," Jim Cramer said.
TL;DR
- Amazon is acquiring Globalstar for $11.6 billion to expand its Amazon Leo satellite internet service.
- The acquisition will bolster Leo's capabilities, including direct-to-device (D2D) services, and allow it to compete with SpaceX's Starlink.
- Globalstar's spectrum licenses are key for enabling D2D services, allowing smartphones to connect directly to satellites.
- Leo's services are expected to strengthen Amazon's retail and cloud businesses, with potential applications for warehouse automation, drones, and delivery vehicles.
- Amazon has secured agreements with customers like Delta Air Lines, JetBlue, and NASA, and plans to continue its partnership with Apple for iPhone services.
- The move reinforces Amazon's commitment to satellite internet, a project that originated as Project Kuiper in 2019.