6 months ago
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Elon Musk is a predator -- by which I mean to say, he eats competitor profit margins for breakfast.
Since setting up SpaceX in 2002 as a launcher of large rockets to compete with Boeing (NYSE: BA) and Lockheed Martin (NYSE: LMT), Musk has methodically moved to take over the entire space industry -- or at least its most profitable parts -- piece by piece.
In 2019, when he saw companies like Spaceflight Inc. making money bundling lots of small satellites into packages that could be launched cheaply on SpaceX Falcon 9 rockets, Musk announced the start of SpaceX "Transporter" missions to do the same thing. Within just a few months, Spaceflight was driven out of the business.
In 2020, Musk entered the satellite broadband internet market, announcing beta service for Starlink. Targeting the fat profit margins of earthbound cable companies like Comcast and Verizon, and aiming to improve upon both the long lag times of satellite communications companies like ViaSat and Hughes, he offered internet customers the ability to access broadband service for just $99 a month. (At last report, 4 million subscribers have taken him up on the offer.)
In 2021, SpaceX noticed that Virgin Galactic and Blue Origin were building space tourism businesses. Later that year, SpaceX sent four private astronauts into space on the Inspiration4 mission. The next year, SpaceX sent four more private astronauts to the International Space Station.
Lately, SpaceX has even been making moves on the nascent market for direct-to-consumer cellphone service. After noticing all the attention AST SpaceMobile (NASDAQ: ASTS) was getting after proving the concept, SpaceX began tweaking Starlink satellites to support cellphone-to-cellphone calls as well.
Result: At last report, SpaceX already has 26 times as many DTC satellites in orbit as does AST.
SpaceX as Europe's biggest fear
All of which is to say, if you're involved in space investing, you'd better keep an eye on SpaceX as a potential competitor, because sooner or later that's what it's going to become. Nor am I the only person to have noticed this.
In a recent interview with French periodical Les Echos, Stéphane Israël, the chief executive officer of Airbus subsidiary Arianespace, warned that SpaceX is now competing "against the entire space industry." The interview focused on European Space Agency (ESA) plans to launch a "European Launcher Challenge" to design a new heavy lift rocket that could compete with Arianespace's own Ariane 6.
Israël did not like this idea.
