Andy Jassy Talks Kuiper Investment in First Call as Amazon’s CEO
Amazon’s Kuiper satellite constellation is part of a company strategy to invest in the long-term future of Amazon, CEO Andy Jassy outlined on Thursday in his first investor call as Amazon CEO.
Jassy took the helm as CEO after Jeff Bezos in late 2021, but Amazon CFOs have traditionally taken the quarterly call with investors. Jassy noted this was the end of his first full year in the role of CEO, and he plans to join the investors calls moving forward.
He addressed how he made changes in Amazon’s business strategy in 2022. The company recently reduced or eliminated 18,000 roles, slowed growth in physical grocery stories, closed physical bookstores, and adjusted its device strategy.
The Kuiper satellite constellation is among the long-term investments that could “change broad customer experiences and change Amazon over time,” potentially becoming a fourth pillar of the company, he said.
Kuiper is Amazon’s Low-Earth Orbit (LEO) constellation to provide satellite internet in the works, a future competitor with SpaceX Starlink and OneWeb. The first two prototype satellites are set to launch soon on United Launch Alliance’s (ULA) first Vulcan Centaur launch. Late last year, Amazon said the company is ramping up manufacturing on the constellation, and has 1,000 people working on the project.
Jassy outlined four questions Amazon uses to evaluate long-term investments: Could it move the needle at Amazon? Is the area well served today? Does Amazon have a differentiated approach? Does Amazon have competencies in the area, or can it acquire them quickly?
“When we look at the answers to those four questions, we are very enthusiastic about our investments in streaming entertainment devices, our Low-Earth Orbit satellite Kuiper [constellation], health care and a few other things,” Jassy said. “Do I think every one of our new investments will be successful? History would say that would be a long shot. However, it only takes one or two of them becoming the fourth pillar for Amazon for us to be a very different company over time.”
Last year, in his first letter to shareholders, Jassy estimated the total market size for Kuiper at 300 to 400 million customers with minimal to no fixed broadband connectivity.
Overall, Amazon reported net sales increased 9% to $514 billion in 2022, compared to 2021. The company reported a net loss of $2.7 billion in 2022, or $0.27 per diluted share. North America sales increased 13% year over year, and AWS sales increased 29% year over year.