Apple spending $450 million with Globalstar, others for satellite texting

Apple said Thursday it will spend $450 million with U.S. companies to enable its new emergency satellite texting feature.

The majority of that money will go to Globalstar, Apple said, a Louisiana-based company which operates the satellites that make the feature possible.

Apple isn’t taking an equity stake in the company but it is committing to spend money for equipment and the service’s operations. The funds will pay for satellites, as well as equipping ground stations with a new kind of antenna designed by Apple.

In September, Apple announced Emergency SOS with Satellite as a banner feature on new iPhone 14 models. If users are out of range of a cellular tower, such as in a remote area while camping, they can still connect to emergency services by pointing their phone into the sky and connecting to one of 24 Globalstar satellites in low Earth orbit. It will launch later this month through an iPhone software update.

Thursday’s announcement underscores the significant costs of operating the service.

The feature is free for two years but Apple has left open the possibility of charging for it after that. The service is not entirely automated and it requires human-staffed call centers — over 300 Globalstar employees will work on the service, Apple said.

It’s also an example of Apple highlighting how much it spends on U.S. suppliers. Apple likes to point out that many of the parts it uses in its devices come from the U.S., even though final assembly is done almost entirely in China.

Apple’s payment to Globalstar will come from Apple’s Advanced Manufacturing Fund, a pool of money the company uses to support U.S.-based suppliers.

Since the Advanced Manufacturing Fund was created in 2017, it has paid $450 million to Corning for iPhone glass production, $390 million to Finisar to outfit a factory to make laser components needed for FaceID, $100 million to XPO Logistics and $10 million to Copan Diagnostics for Covid-19 test kit parts.