Amazon is one of the most innovative and profitable companies in the world. Over the years, the company has continued to extend its reach beyond the e-commerce industry, where it first got its claim to fame. Now, the latest frontier that the company appears to conquer is internet connection services.
In April, a press release confirmed that Amazon had partnered with United Launch Alliance (ULA), a rocket manufacturer, to help the former in launching satellites under its Project Kuiper initiative. As the press release explained, the two entities have signed a contract covering nine satellite launches, paving the way for a long-term collaboration between them.
Project Kuiper is Amazon’s foray into the internet satellite system - what many believe to be Bezos’ answer to Elon Musk and SpaceX’s Starling project. The project got authorization from the Federal Communications Commission (FCC) last year, and it has been operating since then. As this press release explains, the deal between Amazon and ULA will see the latter’s Atlas V rocket help carry Kuiper satellites into lower Earth orbit.
In the press release, Bezos explained:
“We’re determined to make affordable broadband a reality for customers and communities around the world. ULA is a fantastic partner that’s successfully launched dozens of missions for commercial and government customers, and we’re grateful for their support of Kuiper.”
Why Ditch Blue Origin?
ULA itself is a collaboration between Lockheed Martin and Boeing - two aviation companies and defense contractors. Both companies are seen as competitors to Jeff Bezos’ space venture, Blue Origin. So, if anything, it begs the question of why Amazon didn’t just land the contract to Blue Origin since Bezos is a common denominator between both firms.
Primarily, the answer lies in the details. Blue Origin is currently working on New Glenn - its version of an orbital rocket. However, New Glenn has run into some significant issues and isn’t expected to be operational until at least late 2022. On the flip side, the Atlas V is a rested and reliable rocket that has engaged in over 80 launches since it was inaugurated in 2002.
Rajeev Badyal, the Vice President of Technology at Project Kuiper, pointed out in the press release that Atlas V is a “capable, reliable” vehicle that should be able to help Amazon achieve its objectives. While he didn’t rule out the possibility of Amazon collaborating with Blue Origin shortly, his response seemed to point to Amazon’s desire to tread carefully.
“We’ve designed our satellites and dispenser system to accommodate multiple launch vehicles — this gives us the flexibility to use many different rockets and providers to launch our satellite system,” Badyal added.
There is also the fact that Amazon will want to maintain its face. Since Bezos is the sole owner of Blue Origin, Amazon - a publicly-traded company that is always under the public eye - will need to operate carefully as it selects partners for Kuiper. If it takes any decisions that favor Blue Origin, the company could be accused of self-dealing.
Amazon has yet to provide a timeline for the project’s launch. However, according to its agreement with the FCC, the company must deploy half of its planned 3,236 satellites by July 2026. With the company in a bit of a race against time, it needs to have the right partners for the project. Hence, the ULA appears to be the ideal firm to help out.
Bezos Steps Up Musk Rivalry
Jeff Bezos and SpaceX’s Elon Musk have been locked in a significant rivalry over the past few years. The two billionaires continue to duel over everything, from space exploration to NASA contracts and even hiring disputes via SpaceX and Blue Origin.
Amazon venturing into internet satellites is a pretty exciting development. While Kuiper is an interesting venture, it is worth noting that it is a relative newcomer. SpaceX already has over 1,300 Starlink satellites orbiting the Earth, and the company’s “Better Than Nothing” program is sure to see even more come in over the next few years.
There are several other emerging players for Amazon to compete with. These include Telesat and OneWeb, both of which have entered into long-term launch deals with Blue Origin. There is also Omnispace, which is collaborating with Lockheed Martin on its satellite project.
Amazon Ready for the Stars
Still, if any company with the financial wherewithal makes Kuiper work, it is Amazon. Things are especially rolling well for the e-commerce giant, with the company recently publishing its first-quarter earnings. As the documents show, Amazon posted $15.79 in earnings per share - much more than the $9.54 per share that analysts expected.
Revenues also hit $108.52 billion, beating analysts’ expected $104.47 billion.
Amazon was one of the companies to benefit the most from the coronavirus pandemic. The firm has seen a boost to its business across the board, and it now has even more money to pump into the Kuiper project.
While there is a great deal of work to be done before the firm can beat the likes of SpaceX and more in the internet satellite field, there is no denying the fact that Amazon seems ready to compete.
Blue Origin will need to optimize its operations significantly if it hopes to land any of the contracts in this space as well. The company is doing some impressive work with its New Shepard rocket. Many believe that the firm will enjoy more significant progress when Jeff Bezos steps down from Amazon and focuses more on it later this year. Times are definitely exciting for several of Bezos’s initiatives.