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SpaceX recently announced its dedicated launch services program. The program features “flexibility” in scheduling and “lower launch pricing” as key elements. At Frost & Sullivan, in our multiple conversations with industry stakeholders, we have monitored the journey of smallsats and the associated “dedicated launches” market demand. The SpaceX announcement will send disruptive waves through the NewSpace industry—for some, it will be positive, for others, not so much. The announcement corroborates the rising confidence in the success of small-satellite-based business models, which are either new or just entering the space industry. It’s worth considering that SpaceX had earlier consciously avoided the rising demand for dedicated small-satellite launch services and is now actively chasing that very demand, in spite of having its StarLink constellation commitments. Furthermore, though not the last implication, the launch cost is falling as expected while enabling the smaller payloads to gain the recently emerged “primary payload” status, which means that a multi-manifest launch in this segment will not impose any mission compromise on the small-satellites, both in terms of launch dates and orbital placements.

The focus on sun-synchronous orbits indicates that the earth-observation players will have a great enabling force supporting their business models. Should the connectivity players decide to field payloads at relatively lower orbits of the order of 500-600 km altitude, they will also benefit from these services. The price drop in per-kg pricing indicates that both incumbents and new players in the launch services market have a new benchmark to match or beat. With the heritage of SpaceX, the lower launch price is coming along with relatively higher reliability, which, as per Frost & Sullivan’s research, is a primary consideration for the small-satellite operators.

North American small-satellite operators now have a domestic service within the much-awaited and recently initiated dedicated launch services segment. The international services will now have to bring their pricing below the $15,000 per kilogram announced by SpaceX to remain competitive.

SpaceX has historically declared the impossible and subsequently made those possible, and this is one such development, much to the positive surprise of the space industry. The ambiguity of the success of new smallsat operators will now gently fade away as they now have a new version of “affordable access to space.”

To speak to the author or receive further information, contact Jacqui Holmes: jacqui.holmes@frost.com.

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