Amazon to Acquire Apple's Globalstar Stake in Major Satellite Deal
In a landmark move reshaping satellite connectivity for smartphones, Amazon is acquiring Apple's satellite provider Globalstar. According to an FCC filing noticed by PCMag, Amazon will create a new subsidiary called Grapefruit Acquisition Sub II to absorb Globalstar's operations. This subsidiary will then acquire Apple's equity in the satellite company, marking a significant shift in the competitive landscape of satellite-based mobile services.
Apple's Current Stake in Globalstar
Apple currently holds 20 percent equity and 20 percent voting interests in Globalstar Licensee LLC. This subsidiary operates the satellite system that delivers Emergency SOS via satellite to iPhone users in the United States. Apple initially invested $450 million in Globalstar back in 2022, funding the satellite buildout for the Emergency SOS feature. In return, Apple received 20 percent equity and 85 percent of Globalstar's network capacity.
Key Financial Details of the Deal
The transaction is valued at approximately $11.57 billion, with the deal expected to close in 2027 pending regulatory approval. Apple stands to make more money than it originally invested, securing a partnership with a better-established satellite operator through Amazon.
Impact on iPhone and Apple Watch Satellite Features
Amazon's Leo satellite network will power existing iPhone and Apple Watch satellite features. These include Emergency SOS, Messages via satellite, Find My, and Roadside Assistance via satellite. The transition ensures that current users will continue to receive uninterrupted service, while Amazon expands its satellite infrastructure.
Technical Transition Details
Amazon will support iPhone and Apple Watch models that currently use Globalstar's low Earth orbit constellation. The two companies will collaborate on future satellite services running on Amazon's expanded Leo network.
What This Means for Consumers
- Seamless Service Continuity: Existing satellite features will remain operational during the transition.
- Enhanced Network Capacity: Amazon's Leo network promises improved reliability and coverage.
- Future Innovations: Expect new satellite-based services leveraging Amazon's infrastructure.
Strategic Implications for Amazon and Apple
This acquisition positions Amazon as a dominant player in satellite connectivity, directly competing with SpaceX's Starlink and other providers. For Apple, the deal provides a profitable exit while securing a long-term partnership with a more established satellite operator.
Negotiation and Regulatory Landscape
Apple's Globalstar stake required separate negotiations between Apple and Amazon, but the two companies successfully worked out a deal. The transaction is subject to FCC and other regulatory approvals, with a target closing date in 2027.
Future Satellite Services on Leo Network
Amazon's Leo network is expected to offer expanded capabilities beyond current Globalstar services. Potential applications include global roaming, IoT connectivity, and enhanced emergency response systems.
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