Apple Leading the Charge

When Apple (AAPL) introduced its new iPhone 14 last week, it also announced a new emergency-text feature. It gives users the ability to beam short distress messages and location data even in areas where traditional cell service or Wi-Fi is unavailable. Apple says the feature will first be available in the US and Canada with plans for future expansion.

Industry executives describe this as a “first move” made by Apple into what is a growing space. Google parent Alphabet (GOOGL) and Chinese tech giant Huawei have both invested in satellite cell phone connectivity.

Apple has been working on the project since 2019 when it signed an exclusive deal to use 85% of Globalstar Inc.’s network capacity. With the emergency text feature now available to the market, more complex operations like phone calls are on the way.

The Upside of Satellites

At first glance, satellites may seem like an odd course for companies to be pursuing. They’re expensive to maintain and don’t hold as much data as the internet connections being used by most smart phones. Still, industry observers say they can offer basic services to users who are outside of cell towers’ reach, and fill in “dead zones” or network gaps.

To that end, even a small piece of the smartphone expanse is attractive. With over a billion new smartphones hitting the market each year, as well as other connected devices like laptops and tablets, it’s clear satellites have a role to play.

Consumer Impact

Apple says its emergency text feature will be free for two years. Beyond that point it’s not clear what costs will be associated with satellite connectivity.

One thing is already apparent: cell phone network operators are working on deals with satellite companies. Elon Musk’s SpaceX announced last month it will develop mobile satellite links for T-Mobile. AT&T (T) has a similar deal with communications company OneWeb, as do both Amazon (AMZN) and Verizon Wireless (VZ). Satellites filling in the gaps could make wondering if your phone has service a thing of the past.

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