Apple to invest $1.5 billion in Globalstar to boost satellite coverage

Apple will invest up to USD 1.5 billion in satellite provider Globalstar to fund the expansion of its iPhone communication services.

Apple will commit USD 1.1 billion in cash and also purchase 20% equity in Globalstar for USD 400 million, according to Reuters.

The satellite firm said it will use a portion of the funds to pay down debt.

Globalstar also said it will allocate 85% of its network capacity to the iPhone maker. 

Apple relies on Globalstar satellites to send emergency text messages and iMessage reactions in areas with no cell signal. 

The funds will help Globalstar buy new satellites and expand its ground infrastructure. Globalstar currently operates more than 30 satellites and has already ordered 26 satellites to upgrade its constellation in low Earth orbit, according to CNBC.

The new arrangement represents a significant expansion of an earlier 2022 deal, which first gave iPhone 14 users access to Globalstar’s 31 L-band satellites for emergency text services — a service which has since been extended to remote or off-grid use cases with iOS 18, according to market insights platform GlobalData.

“According to GlobalData, this prospective deal packs a competitive punch for virtually all corners of the connectivity market ecosystem, from carriers to OEMs,” Emma Mohr-McClune, Chief Analyst, Technology at GlobalData, said. “This is arguably the largest and most significant consumer OEM low Earth orbit (LEO) deal to date, and the arrangement puts Apple in a clear leading position among western OEMs for extended direct and mass-market voice satellite texting and even calling services for both emergency and remote use cases.”

The Apple-Globalstar arrangement also lowers the incentive for mobile network operators to strike their own deals with satellite providers for connectivity, Mohr-McClune added.