Blue Origin's Kuiper Constellation: A New Challenger in the Satellite Internet Market

Blue Origin is not planning to compete with Starlink, at least not in the way that some might interpret. Instead, the space technology company has its sights set on a new project: Project Kuiper, a satellite constellation aimed at providing broadband internet coverage. Jan Jeff Bezos, the CEO of Amazon, the parent company of Blue Origin, is the driving force behind this initiative. Recently, Amazon has contracted two prominent launch service providers, ULA and Arianespace, to launch satellites for Project Kuiper.

The Kuiper satellites have several advantages over the first-generation Starlink satellites and are on par with OneWeb satellites in terms of performance. These advantages include better efficiency, enhanced reliability, and advanced technology, making them a formidable competitor in the satellite broadband market. The competition is beneficial for the industry as it keeps each company on their toes and encourages ongoing innovation to provide better service at a lower cost. After all, isn't that what capitalism is all about?

Deploying the Kuiper Constellation

Currently, Starlink is leading the way in satellite broadband deployment. By June, they are expected to deploy all 1584 satellites for their first phase (Shell 1) and have them in their assigned orbits by late summer. SpaceX plans to continue launching at a rate of approximately 60 satellites every two weeks, adding to Shell 2. This will provide V1.0 coverage of about 80% of the Earth's surface.

For comparison, Project Kuiper will first deploy prototypes by the end of this year or early next year, but it is already facing significant challenges. By the time Project Kuiper starts launching in late 2022 or early 2023, SpaceX will have already established a new factory near Austin for customer dishes and will begin launching satellites using fully reusable Starship/Superheavy, significantly reducing launch costs.

Taking on the Market Leader

Given the advanced deployment plans and steady expansion of SpaceX's Starlink, it is becoming increasingly difficult for Kuiper to enter the market successfully. In the tech industry, challengers often struggle to compete when trying to match the existing service with necessarily less developed offerings. They end up losing money and eventually give up.

For example, in search, Google remains unchallenged, while in social networks, Facebook's (now Meta) dominates with significant profits. The same pattern repeats in other sectors, with no real rival breaking into the top rankings. It is unlikely that Kuiper can compete on price with the well-developed and robust Starlink service. Starlink can profitably offer superior service, while a challenger would be burning through billions of capital just to match.

The market is heavily tilted towards incumbents like SpaceX, and given the rapid advancements and continuous improvements in SpaceX's plans, it is increasingly difficult to envision a path for Kuiper to gain a significant foothold. This is a common challenge in the tech and satellite broadband market, where established players dominate due to their resources, technology, and experience.

Conclusion

While Blue Origin's Project Kuiper is a promising venture, it faces significant hurdles in the highly competitive satellite internet market. Kuiper needs to innovate and improve rapidly to stand a chance, and even then, it remains to be seen if it can successfully break into the market. The market dynamics favor incumbents, and new entrants often struggle to establish themselves. However, the competition itself is beneficial for innovation and user experience, which can ultimately benefit consumers.