SpaceX is finally following through on its promises and has put a lot of the technical risk of its strategy in the past. All that risk was priced into old valuations, so with a now-reliable and frequently-launched vehicle in Falcon 9, and successful follow-through on Falcon Heavy (less of a big deal economically than the media brouhaha makes it out to be), that risk has gone down and so the valuation is going up.
The launch business is a big [1] (but not enormous) one, and SpaceX has gone from around ~15% to ~45% market share in two years [2]. In my understanding, US DoD launches are a small, but particularly-high-margin subset of that market.
[1] $8.8B annually, according to https://www.businesswire.com/news/home/20180116005923/en/Glo...
[2] 2015-2017, according to SpaceX testimony to a Congressional committee: https://www.popularmechanics.com/space/rockets/a27290/one-ch...
The commercial market will respond to price. SpaceX is all about lowering the price of space-access, and growing the market. More flights. New use cases.
Elon has a great grasp of microeconomics, at least the parts he needs. Tesla was also clever in this regard.
https://www.cringely.com/2018/04/06/the-space-race-is-over-a...
I'm a big fan of SpaceX, I'd prefer they stick to flying tourists and satellites. Railroads and airplanes got their start giving joyrides, why not do the same with space.
The funny thing is, 5 years ago you could have said: "I'm in the space launch industry, and no one I know thinks those reusable rockets are a good idea. The rest of the world is eking out every last bit of performance, and they are going to sacrifice payload capacity for this?"
The established industry does not always know the best way forward.
I'm not saying that you're wrong, I'm saying you have no way of knowing whether you're wrong or not. Maybe something changed, something that will seem obvious in hindsight, and that makes all the difference in the world. As others said - the fact that SpaceX can launch those satellites much cheaper than anybody ever could, historically, may be the thing that changes the whole equation. Or maybe not - we'll see... but just because you are in the industry, that doesn't make it any more likely that you're right about this.
However this approach only makes financial sense for SpaceX because of it's much cheaper access to space so it's not surprising that "no one else in the industry" thinks it's a good idea. It's not a good idea for them.
Basically like treating the satellite as backhaul for small cells, and also having the customer BE the small cell. No fiber laying or city government permits or telephone pole work or anything.
Maybe there are good technical solutions to this that I don't know about, but I'm inclined to believe that a satellite could communicate more efficiently with a handful of high-throughput ground stations at once than it could hundreds or thousands of smaller ground stations that are continually connecting and disconnecting as they gain or lose line-of-sight. That's a lot of control messages to deal with.
But what if their target market (at least for the beginning) were under-served rural areas? There are lots of villages and small towns in industrialised countries where the highest speed you can currently get is in the low single-digit MBit/s. Loads of people currently have no good internet access options but could afford SpaceX's service (based on what's publicly known about it, the estimates I've seen are that it will likely cost something between $50 and $100 per month). It would also be extremely interesting to businesses in such areas (Germany has quite a few of these, for example).
I think there might just be enough potential customers in sparsely populated areas to make this a profitable service. They can also provide backhaul for cell phone services in such areas.
Oh, and if they can get it working on ships (small sailing yachts, pleasure cruises, and commercial shipping could all profit from this) and airplanes, that might be another nice market to capture.
But the most important thing will be the cost of the recieving equipment. That will determine if it is affordable for domestic use or just in commercial or industrial applications.
Heck, it's not even certain to be direct-to-consumer. Starlink makes for a really nice backhaul system, which could be really handy to feed a bunch of smaller terrestrial cells, for example.
Instead they plan on using the BFR for that. I don't know what happens with that deposit that was made. Chances are it rolls over into getting whoever it was a flight on the BFR to the moon.
So Spacex just won a client for a long time, and that too at the cost of investors money..
In other words, and elaborate Pyramid scheme...
By that point where they can no longer produce F9 they plan to have a fleet of Falcon 9 on the books that could continue for quite a while.
Often markets where the barrier to entry is lowered this way tend to grow overall, so I don't think it is an unreasonable bet that the size of the satellite launch market will increase in coming years.
That’d put SpaceX in league with other telecommunications giants.
That’s, of course, not the only possible outcome, but that’s why the valuation is so high.
Additionally, there should be about 150-200 satellites above the US in the initial deployment.
They also plan to upgrade the satellites themselves (according to SpaceX's Mueller) so they're much larger. That should, in principle, allow them to exceed the per-satellite throughput of GSO birds like Viasat's which are over 1Tbps per bird.
They aren't competing with fiber in Denver. They're competing with high-latency and expensive satellite internet in rural areas. It's possible they may eventually dip into the cities a bit if they sell out their capacity and then build out their VLEO constellation (total of 12,000 or so satellites, but in much lower orbits enabling yet lower latency and higher bandwidth).
But Iridium's problem wasn't a lack of capacity, it was slow customer acquisition combined with very high interest rates and launch prices. If SpaceX fills up their network with customers to its capacity, they will be just fine.
For rural areas, there are wireless ISPs for rural areas here in Colorado where you put an antenna on your roof. You get line of sight to an antenna on a nearby mountain for internet service. I don't see how Starlink can possibly compete with that on a technological or cost basis. It seems like most of the western US could have service like this for many rural markets, if it's not already available.
So I definitely think Starlink could compete in that market. But more as an equal than as the only option.
If SpaceX is going to make huge returns on starlink, they will have to be price competitive with at least the DSL providers that are in many rural communities. Many of your remote rural areas in the US have at least 6 to 10mbps for ~$60 a month, and that's plenty for most casual users. Even for video streaming.
And that's now, when there's still large urban areas in a lot of countries on DSL. Once that DSL is phased out, rural areas are going to need better sattelite options or expensive long stretches of fibre to not fall behind the curve.
The main issue for rural satellite access is no longer bandwidth or even data caps but latency.
And if you have DSL in rural areas, count yourself lucky.
What about mobile users?
Starlink doesn't work for mobile users, either.
Essentially seeding their own demand in a market that didn't previously exist (cheaper launch on reused rockets).
As a side benefit, they get the ability to put a constellation in orbit (and continue adding to it) at a fraction of the cost of their telecom competitors.
Therefore, if Starlink suffers the same fate as Iridium (but without damaging the rest of SpaceX), that would actually be a big net win. Iridium emerged from bankruptcy, turned a profit and launched replacement satellites and is now in the process of a huge constellation refresh, using SpaceX's reusable rockets. If that happens with Starlink, that would be a complete success for creating launch demand.
I choose where to live because I can have two different fiber connections (for speed and a failsafe). How long will it be before satellite internet offers 2gbps symmetrical with low latency at reasonable prices?
I can hardly imagine a situation where internet access is so critical at a home that you need two fiber lines anyway. I have probably had 2 hours of downtime in the past 3 years with my cable connection.
The valuation is higher than the annual global launch market, but below what it's projected to reach in the next few years. If SpaceX can maintain their current share of the global market for a few years the valuation may be conservative.
Fortunately with our level of technological advancement, actually fighting in space is just dumb. Fighting from space could be useful, but would break treaty obligations with other spacefaring, nuclear powers.
But what is euphemistically called "defense" is far more often about offense - attacking those countries and people who displease or are inconvenient to you, making sure the world is structure to suit your* interests, usually at the expense of the interests, and often the lives of people elsewhere in the world.
* - In reality, the interests of the elite of your country.
At other times, it means selling F-16s, Apaches and munitions to Saudi Arabia, so they can carry out a brutal bombing campaign in Yemen. There are no good or evil regional powers, only national interests and the smaller nations which either get in the way of those, or help you achieve them.
Be that as it may, it still matters how the people in power think and behave. Some systems of government are better suited to reduce violence than others. For example, a dictator is probably more likely to order military intervention than a person who has to justify their actions to advisors, a congress and eventually a whole nation.
Obviously as you say things get murky when there are large interests at stake and no side is wholly good or wholly evil, but still some can be more wrong than others.
Accusing people who are not pro-government of hypocracy because the use public services is absurd.
You cant not pay my taxes and opt out of government services.
Is there a country in which spend the majority of your time? If yes, then that's your country. Don't like it? Move to another one or get politically active.
> That's a manmade concept that is forced upon me against my will.
Nearly everything in our day-to-day lives is a manmade concept – that doesn't make it any less real.
That changes regularly enough. Just because i like a place doesn't mean it's my country.
I think you're conflating geography with political structures. I feel at home everywhere I've been and i don't quite understand the insatiable jingoism because all places and people are great and not so great in equal measure for various reasons. That said I'm not naive enough to expect it to change and if it were to change i can't really even see a pathway for that to happen. It only takes one person to spit in the punch to ruin it for everyone.