Following SpaceX's nearly back-to-back rocket launches this week, Morgan Stanley analysts released a report praising SpaceX's reusable rocket technology and predicting a big valuation for the company. But the value is expected to be in satellite-based broadband rather than mundane and cheap rocket launches:
SpaceX could become a $50 billion juggernaut through its launch of a satellite broadband network, a team of Morgan Stanley analysts wrote in a report Thursday. The private space company on Wednesday launched its 15th rocket this year, and the second this week. More importantly, the Falcon 9 rocket launch was the third time SpaceX reused the first stage booster, and with each of these so-called "flight-proven" launches, it should be easier to attract new customers.
Morgan Stanley says SpaceX developing reusable rockets is "an elevator to low Earth orbit." "When Elisha Otis demonstrated the safety elevator in 1854, the public may have struggled to comprehend the impact on architecture and city design. Roughly 20 years later, every multistory building in New York, Boston, and Chicago was constructed around a central elevator shaft," Morgan Stanley said. "It all comes down to SpaceX."
Reducing the cost to launch a satellite to about $60 million, from the $200 million that United Launch Alliance charged through most of the last decade, was a monumental breakthrough. SpaceX is trying to reduce its cost to $5 million per mission, and Morgan Stanley says the launch business "generates limited operating income." The cash cow, to Morgan Stanley, is the SpaceX plan to launch a satellite broadband network in two years and send humans to Mars in seven.
Counterpoint at Business Insider and an even higher guesstimate at NextBigFuture.
Previously: SpaceX Successfully Launches and Lands its Third Used Falcon 9 Rocket (Second Launch in Three Days)
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SpaceX will attempt the launch of EchoStar 105/SES-11 at 6:53 PM EDT (10:53 PM UTC). This is SpaceX's second launch attempt in 3 days, following the successful launch of 10 satellites for Iridium on Monday:
It's the third time SpaceX has used one of its landed boosters for a second flight — and if it sticks the landing again, it'll also be the third to have come safely back to Earth for a second time. The first reused Falcon 9 flew in March, with the second one following close behind in June. It's possible we'll see more used rockets fly before the year is out: earlier this year, Musk said the company could fly as many as six used boosters in 2017. Eventually, SpaceX hopes to refly its Falcon 9s much more frequently, by making a landed booster ready to fly again in just 24 hours.
Going up on this flight is a hybrid satellite that will be used by two companies, SES and EchoStar. Called EchoStar 105/SES-11, the satellite will sit in a high orbit 22,000 miles above Earth, providing high-definition broadcasts to the US and other parts of North America. While this is the first time EchoStar is flying a payload on a used Falcon 9, this is familiar territory for SES. The company's SES-10 satellite went up on the first "re-flight" in March. And SES has made it very clear that it is eager to fly its satellites on previously flown boosters.
Update: Liftoff was successful and the first stage landed successfully on a drone ship in the Atlantic Ocean.
Update 2: EchoStar 105/SES-11 successfully deployed.
(Score: 1, Interesting) by Anonymous Coward on Saturday October 14 2017, @05:52AM (1 child)
His other venture (Tesla) loses money hand over fist. Do you really think SpaceX, with bigger technical challenges and less financial motivation, will ever have a positive return on capital? Musk is creation of the bubble economy, and he and his investors want to run away to Mars if SHTF.
(Score: 2) by tibman on Saturday October 14 2017, @05:52PM
When you have investor money then you shouldn't aim to be profitable (yet). You need to INVEST IT and spend it on the company. Just like you would if you had profits. If Tesla wanted to be profitable then they could stop building factories and stores but that would drastically slow their company growth. SpaceX seems to be similar except being a private company it answers to a much smaller group of people. If those people are rich enough then SpaceX doesn't ever need to make money. Just needs to get those investors (safely) to Mars. That being said, i'm certain SpaceX will make plenty of money.
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(Score: 3, Interesting) by maxwell demon on Saturday October 14 2017, @08:17AM (11 children)
I can see how satellite broadband might become a cash cow, but how exactly do those analysts think sending humans to Mars will?
The Tao of math: The numbers you can count are not the real numbers.
(Score: 2) by takyon on Saturday October 14 2017, @08:30AM (2 children)
The U.S. govt. will pay for it?
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Saturday October 14 2017, @01:36PM
A GoFundMe to send all the polititians and lawyers?
(Score: 0) by Anonymous Coward on Sunday October 15 2017, @07:35PM
The Department of Corrections may be interested in paying some
(Score: 2, Interesting) by khallow on Saturday October 14 2017, @02:08PM
As to Mars colonization itself, if Musk can maintain a serious stream of immigrants from Earth to Mars, then just on the basis of selling Martian real estate, he can score big. SpaceX would probably not be directly involved, but they would get paid for transportation.
(Score: 2, Insightful) by Anonymous Coward on Saturday October 14 2017, @04:07PM (6 children)
This goal can be more broadly framed as 'will colonizing Mars succeed?' If it does, then the question of profit is hardly a question.
So will it succeed? The technical issues will be unlike anything like humanity has ever faced, but there's no hurdle that does not seem relatively straight forward to overcome there. So it's more of an issue of the desire. Will the people come? The way Musk typically phrases it is by looking at a Venn Diagram of two relevant groups. Firstly, there are the people that want to go. That number is going to be extremely large -- almost certainly in the millions. And then there are the people that can afford to go. The intersection of those people determine the initial viability. At a ticket price of $500k that's about the cost of a mid level white collar employee liquidating most of what he has. And so I do think there will be far more than enough people in this intersection to start the initial colony. I count myself and my wife among them.
After that I see things as being a self fulfilling prophecy. If you build it, they will come. It takes a certain type of individual to want to go from a comfortable life to roughing it out tens of millions miles away from civilization knowing full that the trip will, in all probability, be a one way voyage. But once the initial colonies are established, I think that will spur on ever more types of people. For instance, Anheiser Busch is already pursuing [space.com] the goal of being the first brewery on Mars. And to do that they'll need employees. And suddenly the circle of people expands outwards. And of course there will be things like 0.3g sports. Imagine basketball where players can jump three times as high or the countless domestic sports it will spawn. And there will be simply people looking for a better life. Mars has about the same land area as Earth does. And there will be an exponential industrialization and development phase. There will be countless opportunities for employment, entrepreneurship, development, and so on.
And this is all just scratching the surface and this is only knowing what we know. Literally every single major exploration has led to countless unexpected discoveries. Probes and rovers are nice, but everything that e.g. Curiosity has accomplished could have been done in but a few days with humans on the ground. Rovers are extremely limited in what they can achieve. We haven't even begun to dig underground yet, and what remains there is all but a complete mystery. For instance many people don't realize how little we know. We only finally absolutely verified that there's plentiful water on the Moon in.... 2009 [space.com]!! And the super scientific methodology used there was ramming a probe into the planet and seeing what poofed up. Without humans on the ground our understanding of other celestial bodies is extremely limited. Factor in domestic science facilities and we'll discover more in a decade on Mars with humans that we would in centuries with probes and rovers.
And then we get into things like asteroid mining and so on. It feels like we live in a static world because day by day nothing seems to change. Yet look back a decade passed and the world is scarcely recognizable. Did you know a decade ago self driving vehicles to any effect were complete fantasy, electric vehicles were a euphemism for glorified go-karts, solar power might be appropriate for heating up some water, and so on. And a decade before that the world wide web had just been invented, companies displaying their email address (let alone a webpage) was considered a novelty, and Carrot Top was featured in ads for 1-800-CALL-ATT. That's where you use a public pay phone to call a person collect -- kind of scary considering somebody born in 1999 would be 18 years old today and that would all probably sound like Greek to them. The point is that what you think of as modern technology today will likely seem just as foreign to somebody 20 years from now. Facebook and YouTube have aspirations of taking over the world when they'll likely be about as familiar to people of that time as Geocities and Usenet are of people of today's time. In other words, don't assume the status quo with shinier gadgets. The status quo paradoxically never feels it will change, yet always does.
(Score: 3, Informative) by maxwell demon on Sunday October 15 2017, @11:01AM (5 children)
Yet. And much of the limitations is in the limitations of what we can transport there. If we have the capacity to transport humans to Mars, we also have the capability of sending better hardware to Mars. And the rovers will become better. As you yourself wrote:
Anyway, the rovers are not generating profit. They gain us knowledge, but my comment was about the claim that Mars colonization will be a cash cow, which I seriously doubt. At best, it will be great advertising for SpaceX.
A Mars colony will be of zero help with asteroid mining. You're still sitting deep inside a gravity well there. Granted, not as deep as Earth, but still pretty deep. Certainly deeper than a moon colony, let alone a free-floating space station.
Anyway, I'd expect asteroid mining to be largely be done with robots rather than humans. The necessary technology is rapidly improving (let me mention again the self-driving cars). And making a robot that can survive the conditions of space is much easier (and thus much cheaper) than providing an environment that makes it safe for a human to stay in space. Not to mention that losing robots gives much less bad publicity than losing a humans. And mind you, there will be some accidents.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 0) by Anonymous Coward on Monday October 16 2017, @06:55PM (4 children)
I never really like these 'let me take a few lines out of context and hit them up' responses. The reason is because, as usual, the response comes without any coherent point. Let's say you're completely right (and in this case I believe you are not). How does this hit on the issue as to whether or not colonization will be a success? It doesn't. Nonetheless, as I'm more than a bit interested in this topic I'll play along while just kind of pointing out that this is a tangent.
On the rover side of things. Technology does not advance itself. Advanced rover technology is simply not being actively pursued. Mars 2020, launched 13 years after planning for Curiosity began, is using more or less the exact same tech with different instrumentation and better wheels. Moving things break first and also require rapid response. Curiosity's low intensity drill for instance broke after 15 cycles. We're just barely scratching the surface of Mars both figuratively and literally. Now add an 8 minute time latency, under optimal circumstances, to any operation. You need super robotics, super automation, super robustness and also a sophisticated self repair capability. Or you can just send a human there and do it all, do it better, do it more reliably, and do it for a tiny fraction of the cost. Not to say humans will be cheap, but I don't think you appreciate what it would actually take to create a 'super rover.'
The rocket launch issue is much more clear. For launches we have the lovely tyranny of the rocket equation. [nasa.gov] On Earth we are incredibly lucky we're able to get anything to orbit, at all. Rocketry at the most basic level is just Newton's Third. You spit out stuff in one way and go the opposite way. And the speed you go is determined by how much and how fast you spit out stuff -- in this case your fuel combusted into exhaust. And how far you can go is obviously determined by how much fuel you have. But as you add more fuel, you need expel even more of it to get the same amount of lift. The long and short of this is that using the absolute best technology we have available, about 95% of a rocket's mass is pure fuel. If our gravity was just a hair higher than it is, we would have never gotten off this planet's surface with any technology we currently have. Getting back to Mars, launching from 1/3rd G is just as a big deal in the opposite direction.
And Mar's favorability for launches is made even nicer by the fact that it's ultra easy to get practically free fuel from the planet using the Sabatier Reaction. [wikipedia.org] You can literally convert the air in Mars to methane and water. Land ore on Mars, process it, extract the most valuable minerals (ensuring a friendly mass:$ ratio), sell on Earth, profit.
(Score: 2) by maxwell demon on Monday October 16 2017, @07:27PM (3 children)
That was not the issue I was posting about. To make it absolutely clear: I was saying zero about whether or not I think colonization will be a success. I doubted that colonization will be a cash cow as those analysts claimed. Re-read my original post.
The Tao of math: The numbers you can count are not the real numbers.
(Score: 0) by Anonymous Coward on Tuesday October 17 2017, @04:36AM (2 children)
Ah, in that case it's pretty straight forward. SpaceX has already proven that 100% reusability is not only possible, but inevitable. And the BFR (the vessel that will be their primary Mars vessel) is being designed with reusability, given their current expertise, from day 0. A fully reusable rocket will bring the cost of launches down to something completely negligible. Like I mentioned above about 95% of a rocket's mass today is fuel. However it's a fraction of a percent of the cost of the rocket itself. The expensive thing is the rocket itself. Even the fairings, the aerodynamic casing that goes on top of the rocket to protect that 5% payload, are surprisingly expensive - ~$4million.
The reason that space launches are so expensive is only because the rocket is where nearly all your expense goes and every company except SpaceX throws it away after a single flight. If airlines did the same thing, you'd be paying around a million bucks a ticket on a 747. This is where the idea of using the BFR as a Earth-based suborbital flight system came from enabling things like getting from New York to Hong Kong in 30 minutes. They can actually profit off these sort of flights with a relatively small number of passengers paying rates that wouldn't be that much different than first class fares on such a trip today. And again
The only issue for SpaceX today is that the demand for space launches is relatively low, with only about ~60 global launches per year. This is no doubt related to the cost, and lowering the cost will enable ever more uses. But colonizing Mars itself is the most clear signal of what would be a massive surge in demand for space launches that would likely never abate. At the point that space flight and interplanetary travel/colonization becomes normalized you'll even begin to see things like interplanetary tourism. With competition like ULA unable to achieve anything without being a trillion dollars and 40 years overbudget, or Blue Origin still yet to even succeed at putting something into orbit -- it looks like this lucrative industry will, at least at the onset, be exclusively SpaceX's.
So perhaps most fundamentally the question is will the demand for spaceflights exponentially increase?
(Score: 2) by maxwell demon on Tuesday October 17 2017, @05:42AM (1 child)
If the rocket cost were the only problem, then manned space flight would not cost substantially more than unmanned space flight. Anyway, don't forget that the fuel cost of going to low earth orbit is negligible compared to the fuel cost of going to Mars. And that's a pure physics problem; there's no way to get around that through clever engineering. There's a bit of possible reduction through swing-by maneuvers, but there are not many planets between Earth and Mars which you could use for that purpose.
But well, let's assume that Mars colonization can be made profitable. I strongly doubt it, but let's just assume it. Then it is still not a cash cow (unless SpaceX is tremendously bad on anything else). Remember, a cash cow is where most of the profits come from. For example, Microsoft surely makes profit from selling keyboards and mice, but it's not their cash cow. Their cash cows are Windows and Office.
And I'm completely convinced that even if Mars colonization can be made profitable, any profits from it will be dwarfed in the short term by the satellite business, and in the long term by asteroid mining business. I can also imagine that they eventually make a lot of money from space tourism. No matter how many people are willing to colonize Mars, I predict that at least an order of magnitude more people will be willing to pay for a trip to LEO. Which at the same time will be substantially cheaper than going to Mars (especially if the non-fuel cost gets minimized).
The Tao of math: The numbers you can count are not the real numbers.
(Score: 0) by Anonymous Coward on Tuesday October 17 2017, @07:59AM
Once again, I'm not really seeing the point you're trying to argue. Are you trying to say that the cost of fuel will be a limiting factor somehow, even with full reuse? If so we can get into the specifics of that. But as is, your knowledge of rocketry is very deeply flawed and leading you to make illogical statements. The fuel cost of getting to LEO is not negligible compared to the fuel cost of going to Mars. You actually spend substantially more fuel getting to LEO than you do getting to Mars.
In rocketry things are measured in delta v. As rockets get lighter they get much more acceleration from the same amount of thrust - this is why staging where rockets are broken into separate detachable stages. The amount of acceleration provided by a given amount of thrust is a value that changes radically depending on the current state of the rocket. I think that's clear but if not, imagine your car weighed 90% less as you got to the bottom of your fuel tank, that last fuel would be vastly more efficient (in terms of miles per gallon) than it was at first. So in rocketry everything is measured in delta v. Here [imgur.com] is an infographic of delta v cost for various destinations in the solar system. Here [wikipedia.org] is the wiki page on such. Something that should stand out to you is that just getting to orbit of Earth is one of the most expensive tasks there is. You're spending 9,400 m/s just to get to LEO. You're spending less than 6,000 m/s to get from LEO to Mars. Those values are also typical and not optimal. Spaceflight is not very intuitive. For instance, you can get from the Moon to Mars using much less fuel than to get from the Earth to the Moon, even though it is literally more than 100x as far away. Isn't gravity fun?
And manned space flight, once the technology is developed, does not cost substantially more than unmanned flight. For instance the Dragon 2 capsule is what SpaceX will be using to ferry astronauts to the ISS. In that case all you're doing is literally replacing your cargo craft (the dragon 1) with a craft that has life support. The crafts themselves are also reusable. Another first from SpaceX that received less fanfare than it should have was reusing a cargo craft to the ISS. The only things that were replaced were the heat shield, batteries, and components exposed to sea water. If NASA were not so risk adverse we could even remove that last part and do retropulsive landings on land.
We can get into growth in this industry vs satellites if you like, but that's another tangent and one that unfortunately relies on wild speculation. In particular, how will the Earthen satellite industry grow in proportion to the decreasing cost of spaceflights? That's a phenomenally difficult question to answer in anything resembling an intelligent fashion.
(Score: 0) by Anonymous Coward on Saturday October 14 2017, @01:46PM
Back of envelope:
What is the market? Worldwide, reasonably priced bandwidth.
What are the applications? Military ops, disaster bandwidth, remote broadcast, airline in-flight Internet access, low latency, perhaps business customer's global coverage smart phone.
What will it cost? Spending $10B (1k sats * $10M/sat) could be economically reasonable for a $50B company. (Technically reasonable seems a whole other matter?)
How much revenue? $50B /50pe = $1B income/year. Perhaps a $5B revenue stream to support this. (Could be 5M $1K customers or 5K $1M customers or a mix in between.)
The cost/capability of the sat's seems out of wack by today's standards.
(Especially building powerful enough sats to work with a reasonable smart phone power budget.)
But if he could build and operate such a network, there it seems possible to have enough customers to support it.
(Score: 3, Interesting) by crafoo on Saturday October 14 2017, @01:52PM
You don't have to dig very deep on Morgan Stanley. Even the Wikipedia page is an interesting read. 2005-2008 especially. $5b from China and $9b from Japan/Mitsubishi. Converted to a holding bank for the Federal Reserve.
How is this country run? How are the important policies made? Morgan Stanley and Goldman Sachs are probably two good places to start. Those leaked DNC emails really gave us so much useful information. Unsurprisingly, like all important info dumps, the story was quickly diverted to how they were leaked. What was in them was almost universally ignored.