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Amazon\u2019s Leo satellite broadband initiative faces a number of operational hurdles in the near term, but Barclays believes the project retains substantial long-term potential, arguing that even a second-place position in the global satellite connectivity market could generate significant value.<\/p>\n
Leo, Amazon\u2019s low-Earth-orbit satellite network previously known as Project Kuiper, is nearing an important development milestone that could pave the way for a commercial launch as soon as the middle of the third quarter. According to Barclays analysts led by Ross Sandler, this progress \u201ccould be a small sentiment tailwind for AMZN.\u201d<\/p>\n
However, the route to commercialization has become increasingly challenging. Launch schedules have been disrupted repeatedly, with the latest setback occurring after an explosion during testing damaged the sole launch pad used by Blue Origin\u2019s New Glenn rocket, leaving the vehicle sidelined for an undetermined period.<\/p>\n
Although Blue Origin has indicated that flights could resume before the end of the year, some industry estimates suggest recovery efforts may take more than twelve months. As a result, Amazon may need to rely more heavily on a limited number of alternative launch providers after originally planning for New Glenn to deploy 48 satellites.<\/p>\n
One of those alternatives, United Launch Alliance\u2019s Atlas V rocket, has only a single remaining mission available for Amazon, with no further rockets scheduled for production.<\/p>\n
Meanwhile, ULA\u2019s newer Vulcan Centaur rocket is gradually increasing operations but has encountered anomalies on two of its four launches to date, and achieving a higher launch frequency will take time. European provider Arianespace remains another option, although it has yet to establish a reliable monthly launch schedule.<\/p>\n
Barclays expects these constraints to reduce Amazon\u2019s North American retail operating margin by roughly 125 basis points during the second quarter. The impact is expected to ease from the fourth quarter as related costs begin to be capitalized. Analysts noted that moving Prime Day into the second quarter could help offset part of the pressure.<\/p>\n
Despite trailing Starlink in both launch capability and network capacity, Barclays believes broader industry trends continue to support Amazon\u2019s long-term prospects.<\/p>\n
\u201cConnectivity is an enormous market that likely evolves into oligopoly-like structures with the industry leader way in front, but solid revenue opportunities for the second- and third-place companies,\u201d the bank\u2019s analysts wrote.<\/p>\n
\u201cBeing second place in an enormous industry (satellite connectivity) is still a very attractive proposition for AMZN bulls,\u201d they said.<\/p>\n","protected":false},"excerpt":{"rendered":"rocket launch clouds NEW SIZE \u00a9Rawpixel Amazon\u2019s Leo satellite broadband initiative faces a number of operational hurdles in…\n","protected":false},"author":2,"featured_media":62305,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21264],"tags":[418,3343,29987,29988,29985,29986,29984],"class_list":["post-62304","post","type-post","status-publish","format-standard","has-post-thumbnail","category-barclays","tag-amazon","tag-barclays","tag-launch-schedule","tag-project-kuiper","tag-rocket-launch","tag-satellite-broadband","tag-satellite-connectivity"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116743664027356118","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/62304","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=62304"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/62304\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/62305"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=62304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=62304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=62304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}