Photo: Brooke Bryand Creative for Access Intelligence

The majority of SATShow attendees polled at the start of Wednesday’s General Session indicated that the space industry’s outlook was too uncertain to assess, while others considered the current climate “great.”

A panel of experts across different segments of the space industry assessed the biggest forces shaping the space market right now, led by Karen Jones and Brian Weeden, policy gurus from The Aerospace Corporation.

D2D Advances

Asked how disruptive direct-to-device (D2D) will be on the space industry, Matt Desch, CEO of Iridium, was bullish, observing, “It’s the talk of the show.”

Desch pointed to uncertainty around the potential size of the D2D market. He recalled that in the early days of the mobile satellite services (MSS) market, predictions were that market could reach $3 billion to $4 billion. The spread on D2D’s market potential is much wider — estimates have ranged from $10 billion to as high as $1 trillion, he said.

“What’s different this time around is patience,” he added, explaining that having a vertically integrated market has given the industry the deep pockets to allow the market to mature.

“Patience is going to be required … especially as we move into 5G radio systems. We’re going to need new devices, and the customer is going to bring their own device, which will make it a much larger market.”

Desch anticipates that it won’t be until 2029 to 2035 “before we really move the needle.” He also predicts that D2D won’t disrupt the terrestrial wireless market despite ongoing  though he wondered if it might disrupt the broadband VSAT market.

Former NASA Administrator Jim Bridenstine, now managing partner of The Artemis Group, sees an even bigger market for D2D  by “democratizing IoT (Internet of Things), where IoT devices will be distributed more widely.

“Everything will be connected in a much more affordable way,” he predicted.

Embracing Public/Private Partnerships

Bridenstine also addressed the focus on public-private partnerships, embodied by NASA’s approach to the Artemis Program, where the agency leans more on commercial providers.

“I said frequently at NASA that we need to be one customer of many in a robust commercial (space) marketplace,” he said. “I also said that the only thing worse than a government monopoly is a private monopoly the government is dependent upon,” Bridenstine added, clearly referring to SpaceX’s dominant position in the U.S. launch market.

The former NASA leader explained that the space sector should look to the operating model of the airline industry, competing on cost, innovation, and safety.

On the issue of competition, Bridenstine urged the industry to embrace more competition “because that’s what creates the innovation metabolism that makes the United States preeminent around the world in so many areas.”

Steve Collar, board chairman of Swissto12 and former CEO of SES, addressed the growing push for space sovereignty and increased government spending on space. He shared the good news – that governments recognize how important space is to people’s daily lives.

More concerning is the danger of large companies “becoming semi-sovereign themselves….[and] able to make decisions about how a constellation or system is used.”

For this reason, Collar said governments need to ensure they can influence how those assets are used.

National Space Funding Comes with Need for Speed, Less Bureaucracy

National security is one area of growth in sovereign space, with the U.S. increasing its national space spending by 10% and Germany indicating it will spend $50 billion in the next few years, noted Weeden.

“Money is starting to flow,” agreed Joseph Rickers, vice president of Transport, Tracking and Warning at Lockheed Martin. He emphasized the need to get past obstacles and bureaucracy to build not only a U.S. defense capability but also an international one with allies.

The threats of contested space “are now coming at you from a lot of different ways,” he added.  “Purpose-driven systems are no longer sufficient anymore. Layered defense is needed now, which means people, factories, and AI,” the defense executive said.

Rickers reiterated the need for systems to be resilient. “We have to shift; we have to go faster; we have to get there sooner.”

The IPO of All IPOs

Representing the investment outlook on the space sector, Tess Hatch, managing director of Stifel Venture Banking, named the upcoming SpaceX IPO with a potential valuation of up to $1.75 trillion (which translates to about 1.75% of the overall global economy), as one of three critical liquidity events she considers critical to opening venture investment in the space sector.  As a point of comparison: $15.8 billion has gone into the space economy this year.

Hatch considers Google’s $500 million acquisition of Skybox, a satellite imagery startup, in 2014, four years after its incorporation, as the second liquidity event.

“That really catalyzed venture capitalists to write a check into space in the first place, discovering and learning about this space thing,” Hatch said.

It marked the beginning of venture-backed startups in the commercial space sector. The third liquidity event was the year of space SPACs (special purpose acquisition companies). These so-called backdoor IPOs took off in 2021, building on momentum from 2020.

“You can’t spell space without SPAC,” said the investment executive, citing her firm’s work helping Rocket Lab go public.

Remote Sensing – AI May be Key to Economical Data Acquisition     

Addressing the outlook for the remote sensing market, Lisa Rich, founder COO of Xplore, a space-as-a-service provider, pointed out that over the last 15 years, “what we’ve seen mostly is that the demand is there, [but] the profits remain somewhat elusive for companies that were first movers in the space.”

She explained a key challenge is that remote sensing applications are ubiquitous –wildfires, climate management, maritime monitoring and chain of custody, yet struggle to command commercial value.

“All those things have value, but how do you derive the value and have cost-effective data acquisition for the commercial marketplace? That’s a challenge that hasn’t been cracked. We haven’t had that internet moment you expect to see [with data deemed as a goldmine].”

But applications with AI may help the industry develop delivery systems for the data that are more efficient, Rich said.

The Loss of Big-Picture Economic Data

Turning to a recent economic change that has implications well beyond the space industry, Akhil Rao, chief economist with economic analysis and strategic advisory firm, Rational Futures, decried the loss of governmental big-picture data that industries rely on to make production decisions. As the former acting chief economist for NASA, Rao helped create some of this data.

“You need to understand the market and market requirements,” he said, sharing that the U.S. during WWII used data to build a production system and economy that was the envy of the world.

“America has had statistical supremacy. As a nation, we’re losing some of that insight,” he warned.

Asked during the Q&A what would be the tipping point for space to take off, Bridenstine said, “Right now, we go to space and we’re entirely dependent on Earth. That’s why there’s been a lot of talk about in-situ utilization both on the moon and eventually on Mars. I think once  you’re no longer dependent on Earth, in space and you can get resources  where you are to sustain, I think that’s probably the tipping point.”

“It’s the most exciting time to be in the space industry in the 45 to 50 years I’ve been in the industry,” said audience member Tim Logue, a policy and business development space veteran who serves on the board of the Pacific Telecom Council. “I agree with the panel that there’s a lot of uncertainty but also a lot of opportunity.”