Amazon’s Leo satellite business has long played second fiddle to SpaceX’s Starlink, working closely with Jeff Bezos’ Blue Origin as a launch partner for its own low-earth orbit (LEO) satellite constellation. Amazon’s original plan was to launch 3,236 LEO satellites, and before the Globalstar deal was announced a few weeks ago, it had already deployed a few hundred. This is far fewer than the 10,000-plus satellites that Starlink already has in orbit, and I believe Amazon decided that acquiring Globalstar would help it catch up.

One of Amazon’s unique value propositions is close integration with AWS, which sets the stage for Amazon Leo’s clear aspiration to serve enterprise customers first and foremost with up to 1 Gbps of broadband service. We’ve seen firsthand in our most recent connectivity research (not yet published) how industries such as oil and gas leverage Starlink for connectivity where none would exist otherwise. In short, there is a lot of hype around direct-to-device (D2D) satellite services, even if I believe it’s misplaced considering Ookla’s recent D2D findings. There’s a lot of talk about D2D services like Starlink potentially competing with terrestrial carriers, but I mostly see them as complementary services that will be optional outside rural areas. D2D will serve as a valuable component of the overall 5G and 6G landscape, but still mostly as an additional layer of coverage for hikers and campers, as well as for emergencies and disasters.

Specifics of the Globalstar Acquisition — and the Apple Connection

Amazon’s acquisition of Globalstar for $11.57 billion marks the company’s second-biggest acquisition, trailing only its purchase of Whole Foods for $13.7 billion in 2017. Globalstar has long been a leader in the satellite space, with its own constellation, ground gateways, and a slew of products and services already built on top of them. Globalstar had also invested $64 million in XCOM only a few years ago and brought in some of its IP and talent, including CEO Paul Jacobs, to run the company. This was before Apple made Globalstar its sole global provider of satellite connectivity for all iPhones. Apple also gave Globalstar $1.5 billion in funding in return for a 20% equity stake in the company and an agreement to construct a new satellite constellation, with Apple receiving 85% of the capacity and Globalstar free to do whatever it wanted with the remainder.

I believe the Apple agreement also made Globalstar an attractive target for Amazon because it gives Amazon Leo a large customer right away, in addition to allowing it to offer D2D services much sooner. When Amazon announced its plan to acquire Globalstar, it also announced that it had already struck a new agreement with Apple. So far, there have been no details released on when (or whether) the new constellation will occur, or what Apple’s new terms might be. Still, Apple’s 20% equity stake could yield a $2.3 billion payday on a $1.5 billion investment once the deal closes in 2027.

The expectation is that Globalstar’s upcoming C-3 constellation will still move forward as planned, with Apple getting the added capacity from Amazon Leo’s constellation as well. Globalstar has previously said that it will also deploy 90 additional tracking antennas and 35 ground stations to support the new constellation. Globalstar also brings its unique terrestrial Band 53 licenses with it, enabling globally harmonized spectrum that should allow Amazon to meet the needs of any global customer. FCC Chair Brendan Carr has already indicated that this acquisition will likely receive FCC approval and avoid regulatory hurdles. It is expected to close in 2027.

How Globalstar Supports Amazon’s Plans in Space

I believe that much of the hype around satellite connectivity today focuses on consumer D2D applications. However, I also believe that most of the money in this space is not with consumers. In my view, Amazon already has the right strategy in place for Amazon Leo to build something that satisfies enterprise customers, especially considering the AWS tie-in. This has always struck me as the most rational approach. Amazon Leo also recently announced a deal with Delta to install satellite broadband connectivity on 500 planes starting in 2028, expanding on the existing AWS partnership the two companies already had. This is very similar to the deals that SpaceX has struck with United and other airlines to bring Starlink satellite broadband to their fleets.

The acquisition of Globalstar accelerates some of Amazon’s ambitions in space and gives it access to more spectrum, which I think is more valuable than most people realize. The addition of Apple as a keystone customer is also huge because it could potentially lure even more customers to Amazon Leo. Apple also benefits from having a much larger partner with an even bigger footprint and greater capacity. Considering the history of bankruptcies in the satellite business, it’s much more reassuring that Apple can rely on Amazon.

This acquisition also makes Amazon Leo a much more competitive entity for SpaceX Starlink than it was before. While Amazon Leo, combined with Globalstar, still has a long way to go in terms of deploying broadband and D2D offerings, I think that it will offer enough differentiation that it can be successful. This acquisition also validates some of the logic behind SpaceX’s upcoming IPO, even though I believe orbital data centers and D2D are mostly hype for investors and won’t deliver meaningful revenue.