- Amazon says antennas for its Project Kuiper satellite internet service cost under $500 to build.
- One analyst called the remarkably cheap antennas “an earth shattering development.”
- The price delta could give Project Kuiper a leg up on arch rival SpaceX’s Starlink.
When Amazon announced its massive rocket launch deal for Project Kuiper, its satellite internet service earlier this month, one detail flew mostly under the radar. Amazon said it has figured out how to make the antennas consumers mount on their homes for less than $500. That’s more than five times cheaper than what SpaceX reportedly spends to build its Starlink antennas, which have long been the cheapest on the market.
The cost delta could give Amazon a major leg up as it launches its Kuiper service and looks to overtake Starlink, which has already launched more than 2,000 satellites and had more than 145,000 users globally as of January, according to CNBC.
“Amazon’s announcement that it can build an all-electronically-steered flat panel antenna (FPA) for ~$500 represents an earthshattering development for an industry that has long been accustomed to paying tens of thousands of dollars,” Quilty Analytics, a boutique space and satellite advisory firm, wrote in an analyst note.
Space industry experts shocked by Amazon’s low-cost antennas
To make internet service providers Kuiper and Starlink work, consumers need what’s called an all-electronically-steered flat panel antenna, capable of tracking satellites in orbit. This tech has historically been used only for military purposes, and can cost millions of thousands to millions of dollars, Quilty Analytics founder Chris Quilty told Insider.
To bring satellite internet to the public, providers have to figure out how to make the necessary antennas affordable. SpaceX is able to build its Starlink antennas for about $2,500, Insider reported in 2020, but sells them to customers for just $600 (a recent markup from $500). SpaceX did not respond to Insider’s request for comment on its satellite antenna costs or how Amazon’s announcement might affect its Starlink business.
An Amazon spokesperson told Insider that Kuiper’s antennas cost less than $500 to build, and that “we expect that figure will continue to come down over time.” Amazon has said it intends to serve tens of millions of customers with its
Internet. That goal suggests “a scale advantage that all competitors will struggle to overcome,” the Quilty analyst note reads.
Amazon declined to explain how, exactly, it made the antenna so inexpensive, but in a December 2020 blog post it said a technological “breakthrough” allowed it to decrease its antenna’s size, weight, and complexity.
Whatever the details, industry experts say it’s a coup for Amazon.
Andrew Penn, senior director in consulting firm Avascent’s space and satellite communications practice, said Amazon’s announcement that it has reached such a low price point caught him “somewhat off-guard.”
“For a long time now, one of the biggest elements holding back consumer broadband adoption for low earth orbiting satellites is the cost of that user terminal. Generally speaking, these would be several thousand dollars,” Penn told Insider. “If they’ve already gotten to $500 before they’re mass producing it, hopefully they will be able to bring that price down even further and enable that mass adoption.”
Kuiper prepares for launch
The Amazon spokesperson told Insider the company has more than 1,000 employees working on Project Kuiper. Its goal is to eventually be able to build two to four satellites every day. Amazon plans to include just over 3,200 satellites in its Kuiper constellation, and with its launch contracts with Blue Origin, United Launch Alliance, and Arianespace, it has secured enough launch capacity for the entire constellation.
Another reason Amazon may have been able to get antenna costs so much lower than SpaceX is because Amazon started Project Kuiper as an engineering exercise to see if it was possible to build the antennas for less than $500, according to Quilty. The company didn’t want to spend billions to build out a constellation if it wasn’t possible.
By running the economics of a running a megaconstellation like Kuiper, it becomes clear that the cost of the user terminal is the most important factor, Quilty said, adding that it was insightful on Amazon’s part that that’s where they started their Project Kuiper efforts.
“Bottom line is, the cheaper the antenna, the more affordable [Amazon] can make the service, and a larger volume of people that can subscribe to the service,” Quilty said.