SpaceX Shocks The House With Iridium Win

Posted: June 18, 2010 in CCAFS, China, Desch, Elon Musk, Falcon 9, India, Iridium Next, Matt Desch, Musk, Space Launch, Space Launch, SpaceX, Titan, Vandenberg
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How low can you go?

SpaceX’s bid to serve as the Iridium Next launch agent was cheaper than the Indians and the Chinese.

How low is it?  Shockingly low.

“That $492 million figure would launch all 72 satellites in our constellation,” said Matt Desch, Iridium’s CEO.

So will SpaceX make up in volume what they’re losing in per unit sales?

SpaceX obviously has to first have a successful product before they can start taking government customers away from the big dogs.  If tradition is followed, they can then start amortizing more of their start-up costs by billing to the government.

They’re on their way.  However, like Sea Launch, could their margins be so slim that one failure puts them on an unrecoverable path?

At some point the buyer has to be saying ‘this deal is too good to be true.’  However, both the satellite manufacturing deal and the launch services support the hypothesis that there is a global capacity glut for goods and services and that in effect, it should be a buyer’s market for some time.

So how does one make their money?  By having the U.S. government as a major customer.

What a great irony that SpaceX, the anthesis of the Titan program is using the Titan launch complex/space launch complex at CCAFS and Vandenberg.

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Comments
  1. […] Economics versus Rocket Science Jump to Comments How low did SpaceX go to win the competition to launch the next generation of Iridium?  So low they could undercut the Chinese and […]

  2. […] Of course, ISRO couldn’t beat SpaceX on the new Iridium and neither could the Chinese. […]

  3. […] Having the U.S. give away space-products is easily imaginable (look up GPS and space situational awareness), but how else might we get space-entangled with others?  By having them (for example) host U.S. payloads and buy/exchange space services (or vice versa).  And how will we leverage the emerging capabilities of our allies and partners?  Certainly, traditional space ally Australia comes to mind with their favorable geography (an ability to look into China and a southern hemisphere location) and their commsat participation.  India may be another.  For example, India was even suggested by Lockheed Martin as an outsourcing candidate for lightweight satellite launches.  On the other hand, neither India (nor China) won the launch services competition for the Iridium NEXT constellation.  The winner was Hawthorne, California’s SpaceX. […]

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