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Apple buys 20% stake in iPhone satellite service partner Globalstar
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Apple buys 20% stake in iPhone satellite service partner Globalstar

What just happened? Apple has agreed to buy a 20 percent stake – totaling 400,000 Class B shares – in Globalstar, its satellite messaging service provider for $400 million. The iPhone maker also agreed to make advance cash payments that will help Globalstar expand its presence on land and in the sky.

Apple in partnership with Globalstar in 2022 to provide emergency messaging features to iPhone 14 users when they are outside of traditional cellular or Wi-Fi range. The feature came free for the first two years, although Apple extended additional year of coverage for iPhone 14 owners at the end of 2023.

With the launch of iOS 18functionality has been extended beyond emergency use. Now users can send and receive texts, emojis and tapbacks via SMS and iMessage via satellite. Apple notes that iMessages sent via satellite are end-to-end encrypted for added security.

In a recent deposit with the U.S. Securities and Exchange Commission, Globalstar said Apple will also make advance infrastructure payments totaling up to $1.1 billion (funded on a quarterly basis during the construction process) to help build a new constellation of satellites, develop infrastructure here on the ground and expand global licenses. Part of the money will also be used to repay Globalstar’s debt.

If all goes as planned, the 20 percent acquisition deal will close later this week.

Most expect Apple to eventually charge for its satellite service, but that has not materialized as of this writing. What that will look like when the time comes remains to be seen, but Apple still has plenty of time to let the feature mature and prove itself before asking customers to pay for access.

As an emergency-only feature, Apple likely would have had a hard time convincing iPhone users to pay up. But now, with the ability to send informal messages to friends and family off-grid, it’s much more appealing. If it were to eventually evolve to include voice calls or even data, the feature would be even more attractive.