SpaceX’s plan to build a satellite constellation is on the back burner as the company works to return its Falcon 9 rocket to working order. That means the growth of SpaceX’s new Redmond office, announced by CEO Elon Musk in January, may be slower than anticipated.
Elon Musk, founder of Paypal, Tesla and SpaceX, announced in Seattle in January he’d hire a crack engineering team for a new SpaceX facility here to design a constellation of satellites to provide broadband across the world — with the first version in the sky within five years.
Not so fast.
SpaceX has opened an office in Redmond and has already hired 60 people, with 40 more openings, said spokesman Phil Larson.
But speaking last week at a conference in Hong Kong, SpaceX president Gwynne Shotwell said the satellite constellation venture is low among the company’s priorities right now, and the business case for building it may never pan out.
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“I would say that this is actually very speculative at this point,” Shotwell said at the Cable & Satellite Broadcasting Association of Asia convention, as reported by trade publication Space News. “We don’t have a lot of effort going into that right now.”
“Certainly I think that from a technical perspective this could get done,” Shotwell said. “But can we develop the technology and roll it out with a lower-cost methodology so that we can beat the prices of existing providers like Comcast and Time Warner and other people? It’s not clear that the business case will work.”
Back in January, speaking to an enthusiastic audience at the Seattle Center, the billionaire entrepreneur Musk betrayed no doubts as he announced the opening of “SpaceX Seattle” and a sweeping plan to put a constellation of 4,000 satellites into low earth orbit.
“We should be able to get Version 1 active in about five years,” Musk told the invited crowd of mostly software techies, “A useful Version 1 that has global coverage, except for the poles.”
In an interview just ahead of the Seattle announcement, Musk told Bloomberg News he expected to have 60 employees in the short run, increasing to as many as 1,000 in three or four years.
Answering a question about the satellite venture at an International Space Station conference in Boston in July, however, Musk was less gung ho.
“A lot of companies have tried this and broken their pick on it. We want to be really careful about how we make this thing work, and not over-extend ourselves,” Musk said then. “So we’re being fairly careful about it. I don’t want to overplay or overstate at this early stage.”
“We’re hopefully going to launch a test satellite next year,” he said.
SpaceX’s Larson said the company has nearly 5,000 employees and its main priority now is the rocket launch and manned spacecraft business.
After a Falcon 9 rocket exploded during launch in June, the first focus is returning that model to flight.
The next development priorities are the Crew Dragon spacecraft, for carrying astronauts into space, and the Falcon Heavy, a bigger version of the launch rocket.
Yet Larson insisted that “we are continuing to move forward with our satellite business in Seattle.”
“It’s long been known the business case for this type of endeavor is very speculative,” he added. “We won’t know until at least a few years down the road what the landscape looks like, but we’re committed to this effort over the long-term.”
Peter de Selding, the Paris bureau chief for SpaceNews, reported on Shotwell’s Hong Kong speech and said the change in tone is not surprising.
He said the idea behind the satellite constellation plan was to make money to fund SpaceX’s ultimate goal of sending humans to Mars. Shotwell’s remarks suggest there’s doubt about the business case for that to happen.
Musk said in January it would cost $10 billion to $15 billion, “maybe more,” to create the planned constellation.
“The company is working on $800 million to $900 million of operating expenses a year,” de Selding said. “They have a lot of stuff they want to do and they have to prioritize.”