Early in April 2019, Amazon announced that it’s in the early stages of development of a network of miniature satellites that will deliver high-speed yet budget-friendly Internet access to every corner of the globe. Called Project Kuiper, the initiative will likely cost the retail giant billions of dollars and present enormous challenges, but Amazon isn’t intimidated.
The general public including investors were surprised that the announcement came from Amazon, not from Blue Origin, since the latter is Bezos’ pet space project. While Bezos owns Blue Origin 100%, he only owns about 12% of Amazon’s total shares and, thus, Project Kuiper will be beholden to its shareholders.
With majority of the world, especially in Asia and Africa, still offline, Amazon’s move also makes perfect sense. Amazon wants to change the current fact that even in the 21st century, more than half of the world’s total population isn’t connected to the Internet. With its vast resources and its founder’s vision, it may well become the leader in the industry.
Amazon.com Inc. was founded by Jeff Bezos, who is the American multinational technology company’s chairman, president and chief executive officer, on July 5, 1994. While it started as an online bookstore, it’s now a titan with diverse product lines including e-commerce, artificial intelligence, and cloud computing. The company also owns a film and television studio and a publishing arm, as well as manufactures a wide range of consumer electronics.
The bottom line: Amazon may well be in our homes in more ways than you can wag a stick at.
Of course, Amazon will have its share of technical and technological challenges in its quest to be the first – and the most successful – company to provide cheap Internet access to even the remotest places on Earth. Furthermore, the Internet connectivity issue is an obstacle in its path toward market dominance in the world’s untapped markets, mainly in Africa and Asia. If it solves the issue, then it may well become a household word worldwide and Jeff Bezos, the world’s richest man today, will likely surpass King Midas himself.
Experts warns, however, that Internet connectivity won’t solve poverty and other issues plaguing mankind. But getting people online can stimulate new businesses, create new jobs, and attract new economies.
Amazon will obviously benefit from the success of Project Kuiper. By launching its own satellite network that will provide affordable Internet connectivity, it will increase its market for its current services, even add more products and services. With an increased market comes new revenue streams, and Amazon will continue its growth pattern.
If all goes according to Amazon’s plan, it will gain 4 billion new customers. Just think of the millions, if not billions, of dollars that will come into its coffers that, in turn, will likely be used for creating new business opportunities.
Of course, Amazon isn’t the first and only company with the idea of a satellite constellation for Internet connectivity worldwide. Bill Gates, for one thing, backed Iridium, Teledesic and Globalstar but these failed; the companies filed for bankruptcy due to rising costs and decreasing funding from investors. Elon Musk’s SpaceX and OneWeb, a Softbank-backed project, have also launched their Internet-related satellite plans.
The space race for Internet connectivity actually started in the 1990s. But in those days, the costs of launching satellites were stratospheric and the hardware and software necessary for them also presented challenges.
In the 21st century, many of these challenges have been addressed. The miniaturization of computers, for example, has resulted in cheaper and smaller spacecraft, which has provided the fledgling industry a definite boost.
But even with the current technology, the creation of a high-speed, cost-efficient satellite-based Internet system requires billions of cash. Many of the failed attempts were due to the loss of investor interest and it’s a continuing concern for the existing projects under development.
Amazon will likely not have this issue, thanks to its deep pockets. Bezos himself, aside from being the world’s richest person, is willing to finance Project Kuiper, and he has reportedly been financing Blue Origin through sales of his Amazon stock.
The giant online company itself is seen as a company that can afford short-term losses in order to survive in the long-term period. With Amazon’s profitable businesses, it’s also among the best companies to finance its own projects.
Amazon, like SpaceX, can also use its in-house rockets, a strategy that can significantly decrease the costs of launching its constellation of satellites into orbit. It’s seen by many industry analysts as a viable contender in the current space race, and it’s a tight race, too.
If it’s successful, Project Kuiper will launch 3,236 miniature satellites into orbit and provide quick Internet access to all points of the planet. Amazon, however, hasn’t stated the cost and timeline for the satellites’ full deployment.
There’s one thing for certain after Amazon’s announcement, which was made relatively quietly but still made a great impact. The challenging satellite-backed Internet market has become even more competitive! There will also likely be a series of significant changes in the industry.