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.