Elon Musk, who has come from an alien planet, or may have traveled from the future, has successfully tossed autopilot, super high-speed rail, space exploration, brain-computer interface, humanoid machine, and then began to intensively again. Toss the Internet of Things.
Recently, Musk’s space exploration technology company SpaceX is currently acquiring Swarm, a company that provides IoT devices and connectivity solutions through micro-satellites.
The merger agreement between the two companies was signed on July 16 this year, because Swarm mentioned this acquisition plan in a document submitted to the FCC on August 6, so it was known and disclosed by the media.
Swarm became a direct wholly-owned subsidiary of SpaceX and applied for FCC approval to transfer ownership of its satellite and antenna licenses to SpaceX.
This also became SpaceX’s first public acquisition plan since its establishment in 2002. In this acquisition, SpaceX not only obtained the technology, but also the license.
As an Internet celebrity project, everyone should be familiar with SpaceX’s Starlink project. Musk announced the birth of the project in January 2015, which aims to use satellite networks to provide users around the world with high-speed Internet access, especially in rural and remote areas. According to the latest data, SpaceX’s Starlink network has approximately 90,000 users in 12 countries and regions. Since November 2019, SpaceX has launched nearly 1,800 Starlink satellites into space.
Despite the impressive results, Musk is still vigorously expanding SpaceX’s strength.
SpaceX not only enhanced the networking capabilities of Starlink satellites through the acquisition of Swarm and provided connectivity services for a wider range of IoT devices, it also launched the second-generation Starlink satellite program, which will deploy up to 12,000 small and micro satellites within 7 years.
Not only SpaceX, but companies of the same type are also growing wildly. Satellite operations and data company Spire went public through SPAC (Special Purpose Acquisition Company) and has raised approximately US$265 million. Astrocast and Orbcomm are also considering going public in order to raise funds to expand the constellation and connect a wider range of IoT devices.
The acquisition of SpaceX is of great significance to the development of the satellite Internet of Things. It is a signal that the market is beginning to move towards integration and gradually forming an oligopoly. So this article tries to do some analysis:
Swarm company explained in detail, where is her advantage?
How will the industrial structure of the satellite Internet of Things evolve?
What is the relationship between the satellite Internet of Things and the terrestrial Internet of Things?
01 All-weather satellite Internet of Things
Swarm, the Chinese meaning is in groups. The name of this company aptly describes what she is doing.
Currently, Swarm has 120 small satellites in low-Earth orbit, which can provide low-cost two-way global satellite communications for IoT devices.
Swarm’s satellite communication services are consistent with the goals of Starlink’s network. However, Swarm’s products are mainly concentrated in the field of Internet of Things. Although they compete with SpaceX’s existing businesses, they are more complementary and expanded.
Swarm’s micro-satellites are only the size of a sandwich, and they are called SpaceBEE, a space bee colony.
Each satellite measures 11x11x2.8 cm and weighs only 400 grams. It is currently the smallest commercial satellite in space. They can be put into the launcher in groups, and the cost is greatly reduced compared to traditional small satellites launched into orbit.
There are two ways for the space bee colony to communicate with the ground.
One is to communicate with an embedded modem called a Tile to provide user equipment with a direct-to-satellite Internet of Things data service. The tiles can be the size of a cookie and are installed inside IoT devices.
The other is to communicate with the Swarm butterfly gateway, which provides LoRa, Wi-Fi, BLE and other connections for IoT devices. These localized butterfly gateways can serve a large number of IoT devices nearby.
A major feature of the Swarm business model is ultra-low fees.
The price of the tile is 119 US dollars (approximately 774 yuan), and the starting price of the connection service is 5 US dollars (approximately 32 yuan) per month. The price of butterfly gateway is 499 US dollars (about 3244 yuan), this is an integrated product, including built-in tile modem, VHF VHF antenna, small solar panel, tripod, development board, etc., a complete set of equipment It weighs less than 6 pounds (approximately 2.7 kg).
In order to ensure low cost, Swarm adopts a direct-to-customer sales model and makes full use of the engineering innovation of micro-satellites and the economic advantages brought by the reduction in launch costs.
Swarm has begun to provide services to IoT customers, including agriculture, maritime, energy, environment, and transportation. For example, remote sensors distributed around the farm can send back updated information about local rainfall and soil conditions; sensors deployed at sea may help generate weather forecasts.
Through the acquisition of Swarm, SpaceX has the ability to build a global micro-satellite network to provide ubiquitous and all-weather new connectivity services for people, animals, plants, vehicles and various IoT devices on the earth.
02 Gradual integration of satellite IoT
The satellite service market centered on the Internet of Things has gradually taken off in recent years. It is estimated that by 2025, about 30.3 million satellite IoT devices will be deployed globally, with a compound annual growth rate of nearly 40%, and the revenue scale of related markets in this field will grow to 5.9 billion U.S. dollars.
This means that in the next 4 years, the amount of satellite IoT devices and applications will expand 3 to 4 times. This will undoubtedly bring significant changes to both the Internet of Things market and the satellite industry.
In the face of huge market growth, many innovative companies have actively entered the game. According to NewSpace’s latest statistics, there are nearly 100 companies worldwide that provide satellite IoT services.
The commonality of these companies is to provide low-cost, low-power, wide-coverage IoT services from space.
First of all, highly integrated hardware makes satellites smaller in size, lower in cost, and more powerful.
Second, the evolution of launch technology is also indispensable. From recyclable rockets to 3D printed engines, launch costs continue to decrease, making satellite IoT services more competitive in price.
Finally, the introduction and commercialization of new long-distance, low-power wireless communication standards have also provided help for the development of the satellite Internet of Things.
In other words, the development of satellite IoT enterprises is an inevitable product when various infrastructures gradually mature. The rise of the Internet of Things, the breakthrough of price bottlenecks, and the existence of vast blind spots in the ground network also provide unprecedented development opportunities for satellite Internet of Things companies.
As early as 2018, the Internet of Things think tank reported an exciting news that satellite Internet of Things companies realized the first LoRa signal sent back from space and proposed the idea of using satellite base stations to connect LoRaWAN devices anywhere in the world.
In the field of satellite Internet of Things, the two camps of new and old players each show their talents.
Let’s first take a look at the “old” players and how they performed. Inmarsat, Thuraya, Iridium, Globalstar and other traditional mobile satellite systems occupy a dominant position in the Internet of Things market, and they focus on mobile and maritime applications. In the past 10 years, they have deployed about 4 million satellite IoT terminals.
Fixed satellite systems such as Eutelsat, Intelsat and Asiasat have also provided IoT connection services in the past few years. With higher bandwidth, they are very suitable for providing backhaul services from terrestrial high-density IoT networks (such as NB-IoT, Lora, Wi-Fi, BLE, etc.) to the Internet.
However, in terms of the size of individual users, most of the Internet of Things users are small customers of the old players. In the past, there were also some Internet of Things market that the old players “didn’t look up to”. However, with the rapid growth of Internet of Things devices, tens of billions of Internet of Things devices are spread all over the world, and the Internet of Things market has attracted the attention of various traditional satellite communication service companies.
Although these old players can provide IoT services, they generally face the dilemma of high cost, slow deployment, and low return on investment, making it difficult to achieve a reasonable business model. Because for IoT users, the small difference in unit price will have a considerable impact on the overall cost.
For example, ecological monitoring and environmental monitoring require the use of a wide variety of sensors. China has a vast territory and rich and diverse natural environment. In order to achieve effective monitoring across the country, it is necessary to deploy massive sensors in forests, wetlands, grasslands, oceans, lakes and other environments, and then use satellite terminals to achieve data transmission. As a result, the number of terminals required is very large.
If the unit price of each satellite terminal is 100 yuan lower, there will be a difference of 100 million for 1 million terminals. If the monthly service fee differs by 10 yuan, it is a difference of 10 million yuan per month and 120 million yuan per year. Such a gap will have a decisive impact on the company’s purchasing decisions. And million-level terminals are just a drop in the ocean in the Internet of Things market.
The IoT market that old players cannot fully satisfy has allowed start-ups with new business models to find a foothold. The LEO satellite constellation is becoming one of the largest investment activities in the commercial aerospace industry ever.
New players active in the satellite Internet of Things market include foreign Astrocast, Myrioata, and Lacuna, domestic Tianyi Research Institute, Jiutian MSI, Galaxy Aerospace, and Micro Nano Sky. Their differentiated competitive advantages lie in low cost, low power consumption, and low latency, which are very suitable for providing direct satellite connection services for IoT terminals widely distributed in various countries and regions.
For these new satellite start-ups, the Internet of Things market is a lucrative fertile ground. They don’t have to bear the capital expenditure burden of old players, and they can move forward relatively lightly.
One thing that must be admitted is that although the satellite Internet of Things has a bright future, the risks are equally huge. This is a capital-intensive industry. Even under a reasonable business model, a company must raise enough funds to cover the cost of the satellite constellation, and at the same time prepare enough funds to deal with the unexpected costs of launch failures and satellite failures. , The pressure is huge.
According to calculations by the Canadian Northern Sky Consulting Company, the satellite constellation generally requires an investment of 5 billion U.S. dollars to maintain its break-even point; and SpaceX estimates that the Starlink constellation construction funds are as high as 10 billion U.S. dollars.
03 Complementary symbiosis of the Internet of Things
Connection is a very important part of IoT applications. IoT companies have long been accustomed to the complementation and coexistence of various communication technologies.
The symbiosis of satellites and terrestrial Internet of Things will provide more detailed and seamless connections for Internet of Things devices throughout time and space.
On the ground, IoT devices need to rely on the installation, deployment and operation of mobile communication infrastructure, and this network coverage has a visible ceiling.
According to various survey data, there are always dead spots in the world that are not covered by ground networks. Many developed countries, such as Italy, France and Germany, have a network coverage rate of no more than 70%. Globally, there are only 83 countries and regions with a coverage rate of more than 50%.
In February this year, the China Internet Network Information Center (CNNIC) released the 47th “Statistical Report on China’s Internet Development Status”, which showed that as of December 2020, the Internet population penetration rate in my country has reached 70.4%. However, there are still many mountains, grasslands, plateaus, Gobi, deserts, oceans and other areas without network coverage in China. If the ocean area is counted, more than 60% of China’s land area is not covered by mobile communication signals, and the existing network only covers the mainland land and coastal waters. In addition, there are mountainous areas, borders, deserts and other areas, and the network coverage is not ideal.
Therefore, the Internet of Things devices cannot solve the problem of network access only by ground methods, which leaves a market opportunity for the satellite Internet of Things. In contrast, satellite Internet can just solve the network coverage in the above-mentioned areas, as well as the broadband communication problems of ships, airplanes, and scientific research, and it is a useful supplement to ground mobile communications.
SpaceX Starlink satellite cluster being prepared for launch
According to the analysis of the Fraunhofer Institute for Integrated Circuits (Fraunhofer Institute for Integrated Circuits), in two typical scenarios, the combination of satellites and terrestrial Internet of Things will produce better results:
The first is in areas and scenarios that cannot or are difficult to cover by the Internet of Things on the ground. For example, when tracking containers shipped from China to California, the only way is to use the satellite Internet of Things.
The second is the scenario where there is ground Internet of Things coverage, but multiple networks between point A and point B must be crossed. For example, truck drivers who perform transportation tasks between multiple European countries usually need to pay for multiple connected service providers along the way. The cost performance and ease of use are not high. At this time, the use of the Internet of Things will provide a good boost.
In terms of market size, NSR, a US satellite industry consulting company, predicts that there will be 100 to 200 million IoT devices in demand for access to satellites in 2022. McKinsey & Company predicts that the output value of the satellite Internet of Things can reach US$560 billion to US$850 billion in 2025.
Domestic satellite IoT companies are also booming. In April 2020, satellite Internet was designated as one of the “new infrastructure” information infrastructures by the National Development and Reform Commission. The industry believes that this marks the first year of my country’s satellite Internet construction in 2020, and it is expected that it will become an important investment position throughout the “14th Five-Year Plan”.
Write at the end
Make a point.
First, SpaceX’s acquisition of Swarm is of great significance to the development of the satellite Internet of Things industry. It is a signal that the market is beginning to integrate and gradually form an oligopoly.
Second, there are nearly one hundred companies that provide satellite IoT services in the world. The rise of the Internet of Things, the breakthrough of price bottlenecks, and the existence of vast blind spots in the ground network provide unprecedented development opportunities for satellite Internet of Things enterprises.
Third, the Internet of Things devices can’t just use ground methods to solve the problem of network access. The symbiosis of satellites and the ground Internet of Things will provide Internet of Things devices with more detailed and seamless connections throughout time and space.
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4. Companies to watch in the Satellite and Space Technology Markets 2021, source: neuco
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Author: Peng Zhao (Founder of IoT Think Tank & Partner of Cloud and Capital)
Original IoT Think Tank
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