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Satellites to be Built & Launched Report 2021

24th Edition

Trends in the Segment - Launches

  • The launch industry remains highly concentrated with historical players still enjoying a dominant position. Experience shows that entering the commercial launch business is a long and complex process achieved by only a few so far.
  • Five commercial small dedicated launchers have now reached orbit, targeting the growing smallsat demand. Their offer tailored orbital injection and complete control over the schedule and integration process but come with a higher specific price than rideshare on large vehicles. To compensate for low margins per launch, they all aim for high launch rates but may be limited by effective demand volume.
  • Legacy heavy launchers are shifting their attention to LEO. Traditionally focused on GTO, they see opportunity in the multiplying constellation projects and are now targeting smallsat demand with low-cost rideshare solutions. This business represents challenges in terms of client aggregation and integration.
  • Last mile logistics providers are multiplying, offering a compromise between the flexibility of dedicated launch and the cost-competitiveness of rideshare by using kick stages to bring smallsats to tailored orbit after a rideshare launch.
  • Several super heavy launchers (>40 t to LEO) are nearing first launch. Government super heavy launchers (>40t to LEO) aim to carry crew and cargo to the Moon with no plans to address conventional satellite markets. Commercial super heavy and reusable vehicles will target conventional satellite markets but are also driven by founder ideology and aspiration for private human spaceflight.

Long live New Space. Welcome to fast space

Time is accelerating in the satellite industry, but it flows at different speeds depending on the satellite verticals and segments

The industry is experiencing a radical transformation in terms of number of satellites and market value. Euroconsult anticipates that satellite demand will experience a x4.5 increase over the next 10 years with 1,704 satellites to be launched on average every year (vs. 381 over the past decade). Compared to last year’s edition, our forecast features a +36% increase due a sustained demand from a handful of mega constellations in addition to many smaller ones.

The satellite industry was already experiencing transition before COVID. If the pandemic has a long-tail effect along the value chain (i.e., some its consequences continue to unfold even after the pandemic), then its biggest impact would be found in the accelerated transition towards more CAPEX-efficient, capable solutions in the context of intense competition and market uncertainty. After years of ramping up, the satellite industry is now fully experiencing structural changes that are affecting the global ecosystem.

The satellite market has entered a new era in which the yearly satellite demand will range from 1,200 to 2,100 satellites, dwarfing all reference points of the previous years. More satellites have already been launched during the first two quarters of 2021 than were launched in 2020, which had seen more satellites launched than were cumulatively launched in 2018-2019.

From 2021 to 2030, constellations will account for 80% of the demand in number of satellites, up 10% compared to the prior year forecast. However, this architecture will only account for 10% in manufacturing and launch revenues because they have low unit cost thanks to economies of scale in production and low launch cost on heavy lift vehicles. Commercial constellations introduce a different business-engineering rationale involving a large number of satellites with shorter lifetimes compared to larger satellites with more technical capabilities. The 2021 edition features an additional 21 constellations compared to the previous edition, with 111 commercial constellations looking to deploy assets.

Mega smallsat constellations are now a reality

OneWeb has now deployed 50% of its first generation satellites and SpaceX is now the largest satellite operator in terms of number of assets with more than 1,700 Starlink satellites deployed, but both are small players revenue-wise. In the next 10 years, five constellations (Oneweb, Starlink, Gwo Wang, Kuiper and Telesat) will concentrate 58% of total satellite demand over the decade (i.e., 9,900 units), but only 8% in manufacturing value and launch value. They have different go-to-market and vertical-integration industrial strategies, reducing the addressable market by retaining demand in-house or creating winner-takes-all deals.

 

Legacy customers still comprise most of the market share in value

The last few years saw intense debate about Old vs. New Space and subsequent orbits (GEO vs. NGSO). GEO demand will still be first in value by retaining 34% of the demand at $109B, of which $65B comes from 50 GEO comsat operators (similar value to past decade). After a record year in 2020, 2021 orders are down to 12, which we anticipate will remain the new standard. The GEO comsat replacement market is challenged by fleet rationalization, in-orbit life extension and traffic transition to upcoming broadband constellations. Moreover, the manufacturers’ product portfolios are diversifying with VHTS, small flexible satellites and microGEO platforms. Digital payloads have become the rule for a data-centric market (rather than a broadcasting market). 

At $240B, governments will remain the first customers of the world space industry by concentration: 75% of satellite manufacturing and launch revenues over the decade (market share eroding by −5% compared to the last edition) despite being 32% of the demand in number of satellites. Investments by defense agencies are driven by milsatcom as well as SSA and COTS whilst civilian agencies’ demand for Earth observation and space exploration also fuels the demand. Smallsats and large constellations are not new to governments that supported these architectures, although they are now endorsing it as a combination of both types.

 

Incumbent suppliers still comprise most of the market share in value

On the vendor side, incumbent satellite manufacturers will retain the lion’s share in value. In the past decade, four manufacturers won 50% of the market manufacturing value ($87B). As of today, 86 manufacturers have publicly received contracts from third parties to build 1,007 satellites, but the same four manufacturers have already booked 28% of the next decade‘s value.   

Despite multiple projects involving large commercial constellations, only a handful have picked a prime so far. The only ones awarded contracts picked established players. With the exception of a few large deals, global competition remains limited with few competitive commercial RFPs, in particular for GEO comsats. Governments’ demand fuels competition between local suppliers. However, national preference limits suppliers’ ability to expand geographically. The single satellite vs. constellations backlog ratio is changing, with constellations growing their backlog in units (58%) and single satellite value concentration (79%) slowly eroding.  

 

Incumbent suppliers still comprise most of the market share in value

With a projected market value of $86B, demand for access to space is experiencing multiple changes. Despite a 52% increase in value between the two decades, we anticipate that the average launching price will be divided by a three-fold factor. New vendors have emerged, ranging from dedicated smallsat access to space to super-heavy reusable launchers with various design-to-cost value propositions. With a new generation of GTO-capable launchers expected, the market will experience a challenging transition. 

Reusability, currently mastered by SpaceX, is gradually endorsed by competitors. It continues to test Starship as the first fully reusable launcher (among other players), paving the way for launch at marginal cost, which could disrupt current market standards.

 

Trends in the Segment - Manufacturing

  • Established players and new entrants face different challenges. Legacy manufacturers with strong flight heritage must adapt to the evolving requirements of their largest clients, both commercial and governmental. New entrants must demonstrate product reliability on orbit as fast as possible amid intensifying competition in order to gain the trust of customers.
  • Manufacturers see structural changes in satcom demand as end users move away from broadcasting services and toward more data-centric use cases. New satellite designs enabling denser coverage (such as HTS and VHTS) or adapting to demand fluctuations (dynamic beams) are gaining momentum. Legacy GEO operators consider shifting to LEO constellations, which would translate into new industrial paradigms, such as serial production and fast design iteration.
  • Competition in smallsat manufacturing is intensifying, as it has lower barriers to entry. Competition is multiform with companies reaching in from other verticals to capture additional value such as launch providers (Rocket Lab, Astra, Isar, Virgin) and launch brokers (Spaceflight, ExoLaunch). While supply is multiplying, the availability of sufficient commercial demand is still unconfirmed.
  • A growing number of operators seek vertical integration. By insourcing manufacturing, they aim to thicken their margins by leveraging economies of scale on serial manufacturing (SpaceX, Kuiper, Planet, Spire). This is an additional challenge for smallsat integrators, who see the open demand decreasing, albeit a growing market, in an already competitive environment.

Satellites to be Built & Launched is based on an in-depth analysis of satellite applications and missions, satellite operators and users, technology advances, and the impact of these factors on the manufacturing and launch industry. It includes a database of all satellites, regardless of mass, that was launched in the last decade, as well as satellites currently under construction, and launch forecast for the next decade. It also provides detailed status and maturity assessments of 55 commercial constellations of five satellites or more and discusses the business cases for the four mega-constellations and their differing vertical integration strategies.

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