A direct challenge to Starlink has been levied by Amazon with its recent purchase of Globalstar.

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Amazon’s $11.57 billion deal with Globalstar marks a pivotal move, signaling its determined entry into satellite broadband and a direct challenge to Starlink’s current leadership position.

First, let’s talk more precisely about what Amazon actually buys. While there are currently 24 satellites, with plans to expand the fleet to 54, the core of the deal concerns Amazon acquiring access to Globalstar’s mobile-satellite spectrum, a resource that is difficult for new market entrants to secure. Additionally, the deal involves Amazon gaining an existing partnership with Globalstar that enables satellite connectivity for Apple devices, specifically iPhones and Apple Watches.

This relationship with Apple warrants special attention. In 2024, Apple invested about $1.5 billion in Globalstar by paying for services in advance and obtaining a 20% equity stake in a Globalstar subsidiary. Under the new arrangement, Amazon Leo, (formerly Project Kuiper), Amazon’s low-earth orbit network, will deliver satellite connectivity for Apple devices using Globalstar’s spectrum and infrastructure. Through acquiring Globalstar, Amazon gains not only key assets but also the existing Apple connectivity roadmap and agreements associated with it.

While Apple currently limits satellite communication to emergency services and texting, its ultimate goal is to enable satellite calling on iPhones, a feature customers have been requesting for years.

Starlink, led by Elon Musk, dominates the market with around 10,000 satellites and 9 million customers. In contrast, Amazon Leo currently has only 200 satellites and has not yet launched consumer services.

However, this difference in market status doesn’t seem to scare Amazon, as it has a history of catching up with its competitors after several years. The purchase of Globalstar is a perfect example of Amazon doing what Amazon usually does. It identifies a strategic bottleneck, removes it through purchasing and builds on that.

Spectrum scarcity is particularly problematic when entering the satellite market, as licensing can take time. By acquiring Globalstar's licenses, Amazon avoids this problem.

The timing of these moves highlights Amazon’s strategic intent. On the same day as the Globalstar deal, Amazon Leo unveiled a high-speed aircraft antenna and signed Wi-Fi service agreements with Delta and JetBlue. Together, these moves signal progress toward building satellite broadband infrastructure for consumers, businesses, and the aviation industry — demonstrating a serious commitment to its mission.

The deal itself reflects the company’s approach very well. Globalstar is valued at $90 per share and will be bought for either cash or stock. The transaction is scheduled to close in 2027 and is subject to certain reviews. However, the controlling shareholder, which owns about 57% of the shares, has already confirmed its willingness to buy the business. Thus, Amazon signaled its intention, bought a controlling stake and now waits for the deal to close.

Even with this bold strategic step, Amazon faces a significant gap compared to Starlink, which maintains robust partnerships and a strong infrastructure built over the years. Amazon’s move shortens the distance but does not erase Starlink’s lead.

Nonetheless, the Globalstar acquisition helps Amazon close the gap with Starlink. Amazon gets the entire satellite stack, the license and the most valuable client ever — Apple. All of this significantly accelerates the process of developing satellite broadband services.

As noted earlier, Amazon's strategy will bring positive changes to the satellite industry. Instead of being an extra service for remote workers and maritime operations, satellite communications will be built into consumer devices, as evidenced by the Emergency SOS feature on the iPhone.

With Amazon Leo's entry, the satellite broadband market faces meaningful disruption. This move positions Amazon as a credible force poised to reshape the industry and drive consumer benefits.

While Amazon has faced failures before, the launch of Amazon Leo signals a bold, targeted effort to capture a defining role in the satellite market, driven by Amazon’s characteristic ambition.

Disclosure: Amazon and Apple subscribe to the research reports from the company I founded, Creative Strategies, along with many other high-tech companies around the world.