Global Space Industry
Two interesting, divergent opinions on the global space industry:
- Bank of America has the industry valued at $1.4 trillion by 2030.
- Citi has it reaching $1 trillion only by 2040.
Launch costs have declined precipitously over the last two decades -- more than 10x. Seems BofA views the curve likely to be similar to the one shown below, while Citi projects more of a flattening in the growth rate.
I'm not sure, of course, but I do find it difficult to believe launch costs don't decline significantly again in the next 10 years with the pattern resembling a disruptive innovation curve. New companies are already coming online with launch capabilities. It seems to be a matter of iterations (time) before new supply drives the cost down.
What will companies do with the decline in launch costs to drive the growth of the overall industry? I'm unsure, but confident in our historical capability for innovation.
Consider what Planet Labs ($PL) is doing -- imaging every point on the Earth's surface every day, in a data uniform way. The value of that data in software-form is likely to be highly valuable in the future. As of yet, the viability of the commercially driven space business model is unproven, but I believe launch costs will enable new industries, and with that, new business models.
Just my two cents on an industry I find fascinating.
@rihardjarc It's something that piques my curiosity because it truly is disruptive. There seems to be unanimous agreement that space is a massive commercial opportunity, but wide debate over where opportunity lies.
I think this is the interesting part for investors. I view the industry through the lens of: what companies are creating something truly valuable / differentiated, and how easy is it to replicate that capability? All the companies involved are pursuing the opportunity, but through different strategies. I'm trying to find which ones have the best chance of winning in the long run.
@investedthought The industry is definitely one with a big potential also commercial. I just wonder when it will be "ready" for investors. If you find any more interesting companies in this space do share I think many readers on Commonstock would be interested in the Space industry.
@rihardjarc I'm currently working on a deep-dive into Planet. I think it deserves a look because of the differentiated approach it's taken over the past decade, as well as the strong execution. It definitely belongs in the more speculative category for now, but the potential seems attractive. Full disclosure: long.
@investedthought because other than launch capibilities it also has the ability to do national secruity, cargo delivery, satelite recycling where the get the old ones and bring them back down, in space manufacturing, basically they are more vertically integrated than SpaceX
Thank you for sharing this article.
$PLTR could be one of those crucial companies in supporting the Space Economy.
I wrote an article about that: https://arnytrezzi.substack.com/p/palantirs-140b-opportunity-to-monopolise
@investedthought, would you recommend investors take a "basket" approach to investing in this industry? Or is it still too early to get in and it's more about watching and learning at this point?
@tomato good question. Not sure I have any expertise, but the way I’m approaching is by looking at the different market segments (launch, manufacturing, EO, communication, etc.) and what various companies are doing within. From that, I try to gauge their strategy and how they plan to drive growth in the industry (from new services, supply, etc.).
It’s an imperfect method, but I think the key is to understand what new services will drive the market to such a size over the next decade. We’ll see if this strategy works in the long run :)