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A Morgan Stanley analyst said in a note to clients Tuesday that the Apple (NASDAQ:AAPL) iPhone 14 is “free advertising for SpaceX and Starlink.”
The analyst believes Apple’s iPhone 14 satellite compatibility, while having extremely low bandwidth today, will eventually become a “standard kit across the mobile cortex.”
“SpaceX is targeting over 100 launches in 2023. This cadence is roughly 5 years ahead of our expectations in our SpaceX model (available upon request),” the analyst wrote. “While today’s smartphone consumer satellite capability is more limited to emergency SoS services, over time, improvements in saleable capacity, satellite, antenna and terminal architecture will drive continual improvement in coverage and services. An extraordinarily high degree of vertical integration (from launch to service provider) makes SpaceX a seemingly unavoidable force in the space economy, responsible for growing the TAM itself.”
The analyst added that SpaceX continues to launch Starlink satellites at a rapid pace, with 25 launches so far in 2022 and nearly 3,000 satellites in orbit. In addition, the company is set to near the completion of the initial 4,408 satellite constellation by the end of 2023.
“We have seen a surge in interest around smartphone satellite connectivity in recent months/weeks as companies look to be the first to market with a service that provides true ubiquitous coverage,” he added. “The attraction of the smartphone opportunity is obvious with billions of potential customers globally and at least 6 companies are now working on services.”
