In Focus: GSAT and Apple
Last Sunday as I was getting ready to publish the In Focus discussion on the Rivian IPO my spidey senses went off and told me to check my phone. What my spidey senses picked up was the talk surrounding Globalstar Inc ($GSAT) and Apple ($AAPL). Rumors were swirling that Apple would add some satellite communication functionality to their upcoming iPhone, and Globalstar would be the satellite partner.
People closer to the situation that I am have reported that Apple's upcoming iPhone 13 will allow for emergency communications via satellite. So, if you or I are ever stranded on a desert island, if we have an iPhone 13 and some battery life, we should be able to make contact with someone and request help. Nice!
I've been stating for the last several years to anyone who would listen that I think Apple and Google will offer satellite communication in their phones, and for the most part I've been ignored, until last Sunday.
I've been invested in Globalstar for quite some time now, since it was ~$0.30 per share. At the time of making my initial investment, my analysis revealed that the company had about $0.23 per share of tangible assets after taking total liabilities into account and discounting their inventory by 30%. Although the company wasn't making a profit, I still saw it as a bargain, because I was paying $0.07 per share for a stock that sold for $0.30. But this isn't a "I told you so" piece, it's a "this is just the beginning" piece.
As I've stated in the past, my long term belief is that Apple and Google will deal a death blow to cell phone service providers by offering their own phone services via satellite. Apple will bundle its phone service with Music, TV, Games, and other Apple offerings, and Google will do the same. Amazon and Facebook will later follow, offering phone service via satellite for non iPhone and Pixel users. Don't be surprised if the next Apple Watch also has satellite connectivity, and Apple rolls out a micro service connection via satellite for its Apple Watch.
There is big money to be made in satellite communications should Apple or any other phone maker or tech giant choose to pursue it fully. Off-the-grid campers and hikers, recreational sailors, oil prospectors, and military personnel are a few groups that find themselves or put themselves in the middle of nowhere and rely on satellite communication.
Rocket Labs USA ($RKLB), another company I've kept a close eye on, also had a good week. The stock rose 16.25% on Friday to close at $13.52. Rocket Labs' has put over 100 satellites in space, and after its recent SPAC merger to become a public company, I expect the company to ramp up space flights and deliveries as more enterprises look to claim their piece of space.
Space activity continues to pick up giving investors more opportunities to invest in what lies above. If you missed Globalstar at $0.30, fear not, this isn't the end, it's only the beginning.