Happy New Year!
Sure, it’s been a few days since January 1st. But, for Lewis Carroll fans, perhaps it’s better to wish a very Happy un-New Year. Either way, the critical condition is “happy.” Whatever it is, wherever you are, hopefully you’re happy.
Also, this is a long one, so good luck–we’re all counting on you!
This analysis continues “Revisiting a Few 2022 Space Activities.” I noted I would be looking at industry trends, activities, mindset/cultural challenges, and unseized opportunities. With activities covered, this one will go into trends. As in the previous revisit, the trend observations will be cursory, as I’ve covered some of them in other analyses.
The following are the space industry trends I considered interesting in 2022. Please note that the word “interesting” encompasses both good and bad trends. It is not a comprehensive list, and if there’s any genuinely positive overall trend in the space industry, it’s that there’s so much activity going on today.
- Increased dependence on SpaceX for launch
- Increased low Earth orbit (LEO) broadband usage
- Rocket reusability
- Commercial position, navigation, and timing (PNT) services
- Satellite manufacturing changes.
- Smallsat launch services
Increased Dependence on SpaceX for Launch
Dependence on a single company is a bad trend. That was my realization on the heels of Russia’s invasion of Ukraine when Russia’s launch czar, Dmitry Rogozin, went a bit crazier than his normal crazy. He withdrew launch services Arianespace, the EU, and others (one of which is still suffering, OneWeb). His actions would have been impactful if NASA and ESA only relied on the traditional legacy launch providers, such as the United Launch Alliance (ULA) and Arianespace. Instead, they exemplified comedic timing.
For reasons mentioned in other analyses, neither ULA nor Arianespace is well-positioned to fulfill new orders to launch large mass payloads. ULA might change that in early 2023, but it still must hope that Blue Origin can reliably and quickly crank out engines for its Vulcan rocket. With Soyuz unavailable, there’s only one rocket launch company that seems able to launch at will: SpaceX.
Worse is that ULA, Arianespace, ISS Reshetnev, etc., aren’t working on rockets that can compete with SpaceX’s Falcon 9. The rocket is establishing new industry standards as it continues launching while its competitors gaze at their navels. Each seems to spend much energy explaining why it’s necessary to do business as usual, narrowly defining their perceived markets. There’s no innovation to be seen from them as they sleepwalk past the innovative opportunities. They don’t appear to see unexpected events in the industry, the contradictions they are facing, changes in industry/market structure, and the implementation of new knowledge.
So long as they ignore those innovation sources and no new rocket launch entrant comes forth, SpaceX will increasingly be relied upon for the world’s launches. I’m pretty sure that’s not a good thing. It’s not the fact that SpaceX is successful that bothers me; it’s the fact there is no competition (which is necessary for a vibrant market). I had the same concerns about ULA before SpaceX came along. Again, this trend needs to be demolished through competition.
Increased LEO Broadband Usage
If there were doubts about the utility of LEO broadband constellations such as OneWeb or Starlink, one 2022 event should have eliminated them. The Russian invasion of Ukraine continues to serve as a showcase for those types of satellite communications systems. That service’s impact was enough to get some folks in China to voice worries about those constellations’ capabilities publicly. Admittedly, the war is (hopefully) transient, but the companies offering LEO broadband services couldn’t have asked for a better PR event.
On the flip side, it’s interesting to note that Ukraine never publicly asked for more Viasat, Eutelsat, or SES coverage (maybe it did, but I haven’t seen those stories). It may be that their services were so poor, to begin with, that Ukraine never looked back once it had a taste of LEO broadband services. Whatever the reason, a few faced challenges. Viasat reported its satellite coverage over the area had been hacked at the beginning of the conflict, and Eutelsat is known for providing continued (DTH) service to Russia (which may show a measure of Eutelsat’s desperation for subscribers). One story points to technology impotence while the other points to greed, but neither encourages a desire to subscribe to their services.
In the end, the reasons why LEO broadband will continue are not because it’s inherently better, serves broadband deserts, or is cheaper (although those are excellent reasons). While the war in Ukraine is a very public showcase for the technology’s battlefield applications, there may be other reasons for LEO broadband’s continued adoption. Their geosynchronous communications services competitors make a subscriber’s decision to jump ship relatively easy. They move slowly, maximize profits, and use predatory subscribership schemes inspired by cable companies. So long as competitors retain any of those characteristics, and the existing LEO broadband companies don’t adopt them, then LEO broadband will grow.
To be clear, the legacy communications satellite providers aren’t dying, but there’s a lot of opportunity for LEO broadband to begin snacking on their lunches. If Kuiper deploys, there may be enough competition to keep the new entrants somewhat honest.
Does a single operational company using reusable rockets represent a trend?
While it undoubtedly impacts an operator’s launch cost (and not necessarily the industry’s), that’s not why I’m mentioning reusability. As noted in a previous analysis, the potential cost savings of reusing a launch booster is an assumption that ULA and Arianespace executives (and others) have questioned. For example, while ULA’s CEO Tory Bruno did not outright dismiss reusability, he did suggest that it only makes sense if the rocket can be launched at least a certain number of times. Arianespace’s Stephane Israel also made noncommittal noises about a reusable rocket’s potential cost savings. For years, the conversations surrounding reusability were on the very narrow topic of cost savings. That focus is strange because ESA, the EU, NASA, and the DoD never demonstrated an overt interest in reducing launch costs.
Also, as seen this last year with SpaceX’s Falcon 9, reusability is about much, much more than the cost to launch. Instead, one of the most significant advantages of a reliable, reusable launch system is the capability and flexibility it brings to the market. A reusable rocket can increase a company’s launch cadence. It allows a company to add launches. It can also help a company weather market downturns because it’s available, with little manufacturing necessary. If SpaceX had to build every stage of its rocket for each launch, it’s doubtful it would have conducted 61 launches in 2022 (especially with the usual “supply chain” challenges). It’s unlikely that the company can manufacture that many rockets in a year, nor has the space to store the boosters (however, it seems its second-stage manufacturing facility can keep up).
With reusability, SpaceX didn’t need the manufacturing capacity or the space to store the boosters to launch 61 times. Both save the company money. But, savings aside, having refurbished rockets on hand for launches gives it a degree of flexibility in its business that none of its competitors have. SpaceX conducted 61 launches in 2022 with no failures. That’s two less than ULA’s launch total over the last eight years (including 2022). Twenty-six of 2022’s Falcon 9s were dedicated to launching satellites other than Starlink (more than triple ULA’s 2022 total). Half of those (13) was for government and military missions. The remaining 13 launched commercial satellites. AND, SpaceX added a OneWeb launch to a full launch manifest in less than nine months.
Each of those numbers represents an achievement and demonstrates opportunities for launch services with a reusable rocket to exploit them, including those inevitable unanticipated ones (such as OneWeb). Reusability even provides a company breathing room, as, during market downturns, the company doesn’t have to build new rockets knowing it can still launch if a customer appears. The incentives are there. Maybe Blue Origin will help make this a more pronounced trend, but it’s difficult to say when it hasn’t launched New Glenn yet. However, reusability seems to accelerate launch cadence, provide launch flexibility, and improves launch reliability with a ready launch vehicle inventory. All three characteristics matter to the DoD (it doesn’t even need to pay for ELC), and it’s difficult to imagine commercial customers not taking advantage of them. Especially since they already are.
Commercial Position, Navigation, and Timing (PNT) Services
I was optimistic about Xona Space Systems’ initial deployment of its pathfinder PNT satellites and what it might mean for commercial PNT. However, I also had some questions about how the company could get people to pay for a service when the “good enough” free option is available in the form of GPS. There are several areas where the company thinks it can make inroads, such as autonomous vehicle navigation.
Another company, Geely (headquartered in China), agrees, deploying at least nine GEESATS in 2022. The company intends to deploy several hundred in the next few years. Their purpose? To “provide centimetre accurate precise positioning and connectivity support for use by automotive brands in the Geely Holding portfolio, enabling true, safe autonomous driving that will connect vehicles with vehicles and infrastructure with vehicles to realise true autonomous driving.”
Geely is a car manufacturer in China. It owns a majority of the Volvo car company. The company is leveraging its successful car business to build out its space segment, which is smart. It will be an advantage, one which Xona doesn’t have. At the same time, the problem for Geely is the perception of outsiders to China’s businesses. That perception may mean Geely encounters difficulty gaining acceptance of its system in other nations, especially nations with large populations using cars daily. Maybe the company’s initial target market, China, is large enough.
Still, Geely’s activities are another data point in commercial space-supplied PNT. It indicates a different way to develop and build a commercial PNT constellation (there are likely more alternatives). It’s also prodding Xona, who is probably taking Geely’s steps seriously. Either way, based on Geely’s and Xona’s plans, commercial PNT satellites will increase.
Satellite Manufacturing Changes
For SpaceX to deploy the 1,500+ Starlink satellites it did during 2022, it has to have a factory capable of cranking out those satellites at rates that legacy manufacturers might observe, but can’t fathom. Ditto for OneWeb’s satellite factory and, theoretically, Project Kuiper’s. Expanding the business from building their satellites to offering to build satellites for others just makes sense.
SpaceX corroborates my guess as it takes on customers like the Space Development Agency and build relatively inexpensive and capable satellites quickly (in days, not years). OneWeb also offers its bus for integration with external customer payloads, which indicates that when it does become operational, the Project Kuiper group will eventually go the same route. These broadband satellite manufacturers' plans do not bode well for legacy players such as Lockheed Martin, Boeing, etc.
The U.S. Department of Defense will likely continue blowing initial budget estimates for a few of the legacy companies’ “bespoke” products–but it won’t buy as many, keeping them on life-support (see ULA). Parts of the department have already done the calculations balancing mission, time, and budget. They have decided they would like more flexibility and perhaps get more bang for the buck by contracting with faster manufacturers. It’s not clear that the legacy companies’ attempts to buy into smallsat manufacturing are the right move, as the companies they’ve acquired are known more for smaller satellite form factors than those offered by SpaceX and OneWeb. They aren’t moving to where the puck is heading, skating instead to where it’s been. Unless–their goal is to make less money because they are moving into a much less profitable segment.
With newer companies moving forward with their broadband plans, more satellites will be offered and rapidly produced for less money, and in much less time than what was expected in the past. That capability is desirable to the military and commercial customers–why wouldn’t this trend continue?
Smallsat Launch Services
Smallsat operators are flocking to anything that can launch their satellites. There are already several rockets available to deploy smallsats. The current list of rockets to serve smallsat needs is rather large: Electron, PSLV, LauncherOne, Vega, Falcon 9, Soyuz, CZ-6, etc. And more startups will (maybe one day) put their PowerPoint decks into reality.
Based on industry activities, there appears to be a need for all of those rockets. Smallsat launch providers may have been initially concerned when SpaceX jumped into the mix with its rideshare service, but they still seem to be getting customers. Not only that, SpaceX upped the price for its rideshare service in 2022, something usually not done if there were no customers.
Smallsat launch services are part of a “smallsat ecosystem” that still seems to be growing. As noted earlier, this won’t be the most lucrative market segment of the global space economy, but it seems to have become the most dominant. It also encourages creative approaches in missions, although most seem focused on Internet of Things and Earth observation.
New smallsat launchers such as Firefly and ABL are moving into this space. None will probably contribute a significant number of smallsat launches in 2023, but if their manifests are full for 2024, then that should change. As more smallsat launch providers enter the market and start fighting for customers, perhaps the trend will reverse (at that point, we’ll see them attempting different ways to distinguish themselves from their competitors–but that’s another article). However, the current trend points to more use for smallsat launchers than many originally thought.
That’s All For Trends
But that certainly isn’t all of the space industry trends. If you have any you wish to share, please do.