With Starlink and satellite communication network growing in popularity and importance, Taiwan-based low-earth orbit (LEO) system integrators observed that the LEO satellite sector is not experiencing exponential growth, but linear growth. Nevertheless, they noted that the slope is much steeper compared to five years ago.
Currently, satellite manufacturing and launching service together account for less than 10% of global satellite revenue, while ground equipment and satellite service respectively accounts for around 53% and 40% of the market. Taiwan-based suppliers believe that the two sectors have the greatest potential to attract more suppliers and grow, boosting adaption and giving rise to more application scenarios in the process - replicating the heydays of smartphone and notebook industries.
As seen in MWC 2023, where various players have introduced devices and solutions for direct satellite communication on smartphones, the integration of satellite communication with smartphone is a much-anticipated development as the smartphone industry is caught in a downturn. The industry generally believes that by the end of 2023, mobile phones with satellite communication capabilities will gradually emerge. However, this is only the initial hardware phase, and the subsequent services, tariffs, and usage scenarios are still unclear.
Nevertheless, some in Taiwan's relevant supply chain are less optimistic toward this development, noting that satellite communication is not the primary means of everyday communication and has limited application scenarios on smartphones, unless when territorial networks become inaccessible.
User expectation of smartphone-to-satellite communication is a key determinant: while it is possible to reach agreements with telecom operators to enable statellite-based roaming, it remains challenging to bring the speed of satellite communication up to par with 4G and 5G. Another determinant is the number of end-users: it will determine if the industry can strike a balance between satellite transmission speed and usage cost. One likely scenario to reach economies of scale is to use satellite communication on logistics monitoring.
Taiwan-based satellite suppliers see the majority of orders coming from SpaceX. However, they argued that Starlink's "Apple-like strategy" to develop hardware and software platforms on its own renders it hard for relevant order volume to scale up, unless there emerges an "Android-like" counterpart in the sector.
