Apple's Star Wars with Elon Musk
Aaron Tilley & Wayne Ma
This is a fascinating report on a few levels by Aaron Tilley and Wayne Ma. First and foremost, Apple's emergency satellite functionality for the iPhone was clearly born out of a desire, as always, to "own the entire stack". Thus, "Project Eagle" was hatched:
Starting in 2015, Apple and Boeing held early discussions about a satellite internet project that would involve delivering full-blown wireless internet service, not just emergency communications services, to iPhones and homes, said five people involved in or briefed on the project.
Through the effort, dubbed Project Eagle within Apple, the companies would lob thousands of Boeing satellites into orbit to beam internet down to iPhones. For home users, Apple planned to offer antennas people could stick to their windows to disperse their internet connection throughout the building. (Satellite internet requires a device to have an uninterrupted line of sight to the sky.)
For the project’s champions, it was an ambitious gambit to provide a more seamless Apple experience. Some inside Apple saw mobile carriers as necessary but inconvenient partners that held the company’s iPhone plans back. With a global satellite system, Apple could provide more of the key ingredients for its products, reducing its dependency on outside partners.
But, interestingly enough, those relationships are what seemingly doomed such a project, as Tim Cook was worried about pissing off their partners, per the report. This notion comes up time and time again and it's yet another not great look for Cook – can you imagine Steve Jobs killing off a project because of what Apple's partners might think? Certainly not their carrier partners. Some may recall the notion that under Jobs, those carrier partners found out about initiatives like iMessage and FaceTime the same time the public did: when Jobs announced them on stage at an Apple event.
Miss that guy.
To be fair to Cook, there are legitimate concerns here beyond what the carrier partners might think: what regulators might think. And one potentially hairy situation Apple undoubtedly wants to avoid may be the key as to why the company hasn't yet started charging users for the satellite features:
Apple has yet to begin charging users for satellite features and has extended the free access period through at least September of this year.
One reason Apple executives have been reluctant to charge customers for the features is their fear that it could trigger the U.S. government to regulate Apple as a telecommunications carrier, said people who worked on the project. That could force Apple to build back doors into communication services like iMessage. Federal law requires telecommunication carriers to allow for surveillance to comply with government information requests.
Yeah, that would not be good – especially given all the other work, around the world, Apple has done to combat such situations in the name of user privacy.
Even still, this report reads a lot like Apple is basically propping up their partner Globalstar here to give them an at-a-distance excuse for any regulatory issues. But it also sounds like it's expensive and burdensome for Apple, and there's a lot of folks internally would would prefer they get out of the business entirely. That includes Apple's head of corp dev, Adrian Perica, who is name-checked here multiple times – in part because he's long wanted Apple to go with SpaceX/Starlink for such a service (which seems related to his relationship to Elon Musk dating to when Apple was kicking the tires on a Tesla acquisition in the early days of the Apple Car project).
But beyond Perica, there's clearly no love lost between Musk and Apple – undoubtedly, in part, because said Tesla deal never happened. This report kicks off with a story about how Musk tried to pitch Starlink as the key partner ahead of the product launch with Globalstar. Per the report, Musk dictated terms to Apple and gave them 72 hours to respond, which is clearly the way Apple likes to do business. Needless to say, the deal didn't happen.
And that, in turn, has seemingly pushed Musk down the regulatory path with Apple, trying to go after Globalstar's spectrum for SpaceX – and specifically name-dropping Apple in such filings, which is clearly further pissing them off for the regulatory reasons listed above.
And now he's trying to almost backdoor his way into the iPhone with the Starlink/T-Mobile deal. Elon Musk is nothing if not relentless.
Overall, it's sort of interesting that Apple explored the idea of building their own Starlink of course – with Boeing, no less – but backed away, and now Starlink is a massive business for SpaceX. And one of growing importance and clout for all sorts of reasons. It's probably not realistic to think that Apple could have built the same thing as for one thing, they don't have their own SpaceX rocket payload business – and another of the trillion-dollar behemoths, Amazon, has struggled to compete with SpaceX in this field. Still, if Apple is looking for revenue growth opportunities as the iPhone plateaus... they had one in their sights at least!
Too bad Tim Cook didn't want to upset the carriers.
One more thing:
In recent years, Musk has also plotted the ultimate challenge to Apple, said a person with direct knowledge of his thinking: building his own phone to get around Apple’s gatekeeper position in the market. Musk has discussed Tesla building the phone and providing satellite connectivity through Starlink, the person said.
Musk hasn’t kept his openness to making a smartphone secret. He has publicly toyed with the idea on social media at times, but he has also made it clear he doesn’t want to deal with the headaches of such a monumental effort.
“The idea of making a phone makes me want to die,” Musk said at a Trump rally in Philadelphia last October. “If we have to make a phone, we will. But we will aspire not to make a phone.”
Given all the other headaches that Musk is currently dealing with, specifically at Tesla, it's hard to see how they could go down this path now. But five years ago? Is there any doubt we would have seen a 'Cyberphone' announced, even if never actually shipped? Could Starlink itself do some sort of device? Perhaps in partnership with xAI? There might be other reasons to do that now...