Author Topic: Impact of SpaceX rideshare on small sat launchers market  (Read 59185 times)

Offline su27k

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #40 on: 02/10/2023 12:18 am »
PS: It's interesting to note that prices for a full Falcon 9 launch aren't set at "competition-killing" levels: they seem to be more like "low enough to make us the obvious choice, but leave us a healthy profit." But for Transporter, they're not pricing the equivalent of $5 million for an Electron's worth of payload; they're charging $1.2 million. That's "we're not going to allow Rocket Lab to lower their prices to compete, we're just going to kill them" pricing.

Or they needed the big price gap for the rideshare to offset dedicated smallsat launcher's advantage in terms of scheduling and orbit specificity. There's no such need for full F9 launches, since those are functionally equivalent to their competitors, no so when you compare rideshare to dedicated smallsat launchers.

Offline su27k

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #41 on: 02/10/2023 01:24 am »
That's called "predatory pricing" in the anti-trust jargon.  :(

So yes real, honest competion does lower prices.

And no one knows if those ride-share prices are fair (because first stage recovery really is that efficient) or if they are set at that level for SX to hoover up a bit more cash and kill off potential rivals.

The big picture is always instructive.

When SX started it cost 10s of $m to launch a multi-tonne satellite to GEO

And in 2023 it still  costs 10s of $m to launch a multi-tonne satellite to GEO

IOW the major price reduction that SX has brought to the market is essentially zero.   :(

Because  (another little lesson they teach on Marketing courses) is that Price <> Cost.

But they are a business and and they do business like a business. Anyone who has any sort of rose-tinted misty eyed vision of them when it comes to their competition here on earth is simply kidding themselves.  :(
SpaceX is a for-profit company. Unless they are selling a service at a loss, it is not predatory pricing.

Also note even if they're selling service at a loss, it doesn't necessarily mean it's predatory pricing. For example we know for a fact that SpaceX was selling Starlink terminals at significant loss, Ford also admits that they're selling EVs at a loss, that's not predatory pricing, that's just how production scaling works. The early products are always more expensive, the companies expect cost to be lowered once they optimized the production process and get up to volume.

Online M.E.T.

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #42 on: 02/10/2023 01:30 am »
If critics are crying about F9 Transporter missions being ďpredatory pricingĒ, just wait until Starship Transporter missions arriveÖ

Online matthewkantar

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #43 on: 02/10/2023 01:34 am »
The big picture is always instructive.

When SX started it cost 10s of $m to launch a multi-tonne satellite to GEO

And in 2023 it still  costs 10s of $m to launch a multi-tonne satellite to GEO

IOW the major price reduction that SX has brought to the market is essentially zero.   :

The above snippet is complete baloney. Not worth wasting the time to do all the documentation, but SpaceX didnít eat ULAís and Arianeís lunch with good looks.

If you extrapolate to 2023 ULAís price trends pre-SpaceX, a geo launch would be a billion dollars today.

Online M.E.T.

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #44 on: 02/10/2023 01:46 am »
In the end commercial launch is a niche market (maybe worth a measly $10B a year), and itís just not set up to sustain a bunch of small players.

Economies of scale are needed to be successful, and the ability to achieve that is constrained by the relatively small size of the market.

For SpaceX, the marginal profit on a Transporter launch might not be particularly significant, but it contributes to achieving improved scale, which is fundamental to pushing down their internal launch costs over time.

In by the end, there is no inherent right for every dreamer who wants to build a rocket launch business to be successful. And frankly, most of the space SPACs of the last 5 years are just that - dreamers on dead end trajectories.

Thatís why I still expect Blue Origin to have a greater chance of long term survival than any of these idealistic newcomers.
« Last Edit: 02/10/2023 01:47 am by M.E.T. »

Offline DeimosDream

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #45 on: 02/10/2023 01:52 am »
The big picture is always instructive.

When SX started it cost 10s of $m to launch a multi-tonne satellite to GEO

And in 2023 it still  costs 10s of $m to launch a multi-tonne satellite to GEO

IOW the major price reduction that SX has brought to the market is essentially zero.   :(

I need to disagree with these points.
Before SpaceX the most affordable non-Russian/Chinese rocket was the Ariane 5 which charged nearly $200M to launch dual-payloads to GTO. At a (40/60?) cost split that put the smaller lower-bay payload at $80M with $120M for a larger upper bay - and that was a bargain compared to what ULA was charging.

Then SpaceX arrived, with with v1.1 selling small Ariane 5 ECA lower-bay sized payloads for $62M and F9-Heavy offering to carry upper-bay sized payloads for $85M: a 20-30% reduction with a shift from co-manifesting to dedicated launch as a bonus. ULA, needing to compete for US government contracts, trimmed their fat and cut Atlas V starting prices to just $109M for a no-frills 401 launch after years of increases. Arianespace for their part couldn't drop prices to less than 150M euro even with EU subsidizes and has been whining ever since.

I'm going to call that a major price reduction far from zero.


The only problem, if we can call it that, is that SpaceX instead of passing on the subsequent savings from 1st-stage reuse has pushed inflation adjusted price increases. Maybe their early launches were below-cost banking on the assumption that that pricing would be sustainable once they made reuse work.. or maybe when you already have the cheapest, most response, and most reliable rocket available you don't have any incentive to go any lower. Probably the 2nd going by how cheap the transporter missions appear to be.

Online trimeta

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #46 on: 02/10/2023 01:56 am »
The big picture is always instructive.

When SX started it cost 10s of $m to launch a multi-tonne satellite to GEO

And in 2023 it still  costs 10s of $m to launch a multi-tonne satellite to GEO

IOW the major price reduction that SX has brought to the market is essentially zero.   :

The above snippet is complete baloney. Not worth wasting the time to do all the documentation, but SpaceX didnít eat ULAís and Arianeís lunch with good looks.

If you extrapolate to 2023 ULAís price trends pre-SpaceX, a geo launch would be a billion dollars today.
Talking about ULA and ArianeSpace collectively in one breath and then ULA's prices alone in the next is a bit disingenuous, given that ArianeSpace had already eaten ULA's (or rather, the US commercial launch industry's) lunch in the 1990s. Ariane 5 pricing was on a very different trajectory compared to Atlas V and Delta IV.

Online M.E.T.

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #47 on: 02/10/2023 01:59 am »
The big picture is always instructive.

When SX started it cost 10s of $m to launch a multi-tonne satellite to GEO

And in 2023 it still  costs 10s of $m to launch a multi-tonne satellite to GEO

IOW the major price reduction that SX has brought to the market is essentially zero.   :(

I need to disagree with these points.
Before SpaceX the most affordable non-Russian/Chinese rocket was the Ariane 5 which charged nearly $200M to launch dual-payloads to GTO. At a (40/60?) cost split that put the smaller lower-bay payload at $80M with $120M for a larger upper bay - and that was a bargain compared to what ULA was charging.

Then SpaceX arrived, with with v1.1 selling small Ariane 5 ECA lower-bay sized payloads for $62M and F9-Heavy offering to carry upper-bay sized payloads for $85M: a 20-30% reduction with a shift from co-manifesting to dedicated launch as a bonus. ULA, needing to compete for US government contracts, trimmed their fat and cut Atlas V starting prices to just $109M for a no-frills 401 launch after years of increases. Arianespace for their part couldn't drop prices to less than 150M euro even with EU subsidizes and has been whining ever since.

I'm going to call that a major price reduction far from zero.


The only problem, if we can call it that, is that SpaceX instead of passing on the subsequent savings from 1st-stage reuse has pushed inflation adjusted price increases. Maybe their early launches were below-cost banking on the assumption that that pricing would be sustainable once they made reuse work.. or maybe when you already have the cheapest, most response, and most reliable rocket available you don't have any incentive to go any lower. Probably the 2nd going by how cheap the transporter missions appear to be.

Shotwell said yesterday that their launch business is self sustaining, and could even fund the development of either Starlink or Starship from internal cash flows, but not both programs simultaneously. Hence the need for periodic capital raises.

So, if SpaceX was content to end their disruptive journey with F9 Block 5, they could be comfortably profitable just from Falcon launches for decades to come.

But they chose not to end there. Instead, they need every dollar they can get to keep innovating as they currently are.

Offline Blackjax

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #48 on: 02/10/2023 02:49 am »
I see a lot of people on this thread assigning a single clear motive for their pricing.  In my experience decision making is rarely that simple and they likely have a mixture of motives that feed into their strategy.  I could think of several possibilities beyond the desire to suppress competition but there is one that I'd love to know whether or not it played a role in their decisions, if at all.

When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.  The existing players in space and the amount/types of skilled labor in the space industry at present are not prepped to fully leverage a massive expansion in inexpensive launch capacity.  What is needed is a large boost to entrepreurism to bring in new blood on both the business and workforce end of things to create a situation where innovation can build an ecosystem which finds new uses for this launch capacity.  I have to wonder if spacex is thinking long term enough to be trying to foster the next generation of customers via inexpensive rideshares now.

Offline Zed_Noir

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #49 on: 02/10/2023 04:11 am »
<snip>
When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.
<snip>
Will disagree. Starlink v2 comsats and propellants to orbital depots will be the vast majority of payloads for Starship.

Online M.E.T.

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #50 on: 02/10/2023 04:15 am »
I see a lot of people on this thread assigning a single clear motive for their pricing.  In my experience decision making is rarely that simple and they likely have a mixture of motives that feed into their strategy.  I could think of several possibilities beyond the desire to suppress competition but there is one that I'd love to know whether or not it played a role in their decisions, if at all.

When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.  The existing players in space and the amount/types of skilled labor in the space industry at present are not prepped to fully leverage a massive expansion in inexpensive launch capacity.  What is needed is a large boost to entrepreurism to bring in new blood on both the business and workforce end of things to create a situation where innovation can build an ecosystem which finds new uses for this launch capacity.  I have to wonder if spacex is thinking long term enough to be trying to foster the next generation of customers via inexpensive rideshares now.

I find it helpful to think of the commercial launch market as a finite pie - potentially worth about $10B. Those who forecast tremendous growth to this market in my view do so without taking into account what the arrival of Starship actually means.

If Starship achieves 100t to orbit for $10M, that will mean Starship can launch 1000 times a year in a market worth $10B. Thatís 100,000t to orbit.

Outside of Elonís Mars colonisation program, itís gonna take multiple decades before an annual payload demand of 100,000t exists. So there is no reason for the $10B market size to grow, if $10B can now buy multiple times the upmass demand that exists in the entire world.

Put differently, while Starship will open up the market for in-space activities tremendously, it wonít increase the size of the LAUNCH market. It will still be ~$10B. Only now you will have to launch ten twenty times more often at a tenth twentieth the price per launch, to generate the same revenue you would have in the pre-Starship days. If you donít, you will be too expensive to compete.

This is not making launch business cases more feasible. It is instead destroying them.
« Last Edit: 02/10/2023 04:50 am by M.E.T. »

Offline darkenfast

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #51 on: 02/10/2023 06:49 am »
The bottom line is that SpaceX is not so-much a "for-profit" company, as it is a "for-Mars" company. Back when Musk announced the giant rocket that eventually became Starship (remember the "stealing underpants" comment?), he made it quite clear that SpaceX would have to make billions of dollars to go to Mars, and keep going to Mars in ever-increasing numbers.

SpaceX is not publicly traded, and no one can invest unless they understand that they are signing up to a vision: "Go to Mars and make it a second home for humanity."

It drives everything they do.
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Offline imprezive

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #52 on: 02/10/2023 07:00 am »
I see a lot of people on this thread assigning a single clear motive for their pricing.  In my experience decision making is rarely that simple and they likely have a mixture of motives that feed into their strategy.  I could think of several possibilities beyond the desire to suppress competition but there is one that I'd love to know whether or not it played a role in their decisions, if at all.

When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.  The existing players in space and the amount/types of skilled labor in the space industry at present are not prepped to fully leverage a massive expansion in inexpensive launch capacity.  What is needed is a large boost to entrepreurism to bring in new blood on both the business and workforce end of things to create a situation where innovation can build an ecosystem which finds new uses for this launch capacity.  I have to wonder if spacex is thinking long term enough to be trying to foster the next generation of customers via inexpensive rideshares now.

I find it helpful to think of the commercial launch market as a finite pie - potentially worth about $10B. Those who forecast tremendous growth to this market in my view do so without taking into account what the arrival of Starship actually means.

If Starship achieves 100t to orbit for $10M, that will mean Starship can launch 1000 times a year in a market worth $10B. Thatís 100,000t to orbit.

Outside of Elonís Mars colonisation program, itís gonna take multiple decades before an annual payload demand of 100,000t exists. So there is no reason for the $10B market size to grow, if $10B can now buy multiple times the upmass demand that exists in the entire world.

Put differently, while Starship will open up the market for in-space activities tremendously, it wonít increase the size of the LAUNCH market. It will still be ~$10B. Only now you will have to launch ten twenty times more often at a tenth twentieth the price per launch, to generate the same revenue you would have in the pre-Starship days. If you donít, you will be too expensive to compete.

This is not making launch business cases more feasible. It is instead destroying them.

The Transporter program has brought multiple new companies and VCs into the market. Maybe a rounding error on $10B but it has brought new ideas and people to the industry.

Online M.E.T.

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #53 on: 02/10/2023 07:41 am »
I see a lot of people on this thread assigning a single clear motive for their pricing.  In my experience decision making is rarely that simple and they likely have a mixture of motives that feed into their strategy.  I could think of several possibilities beyond the desire to suppress competition but there is one that I'd love to know whether or not it played a role in their decisions, if at all.

When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.  The existing players in space and the amount/types of skilled labor in the space industry at present are not prepped to fully leverage a massive expansion in inexpensive launch capacity.  What is needed is a large boost to entrepreurism to bring in new blood on both the business and workforce end of things to create a situation where innovation can build an ecosystem which finds new uses for this launch capacity.  I have to wonder if spacex is thinking long term enough to be trying to foster the next generation of customers via inexpensive rideshares now.

I find it helpful to think of the commercial launch market as a finite pie - potentially worth about $10B. Those who forecast tremendous growth to this market in my view do so without taking into account what the arrival of Starship actually means.

If Starship achieves 100t to orbit for $10M, that will mean Starship can launch 1000 times a year in a market worth $10B. Thatís 100,000t to orbit.

Outside of Elonís Mars colonisation program, itís gonna take multiple decades before an annual payload demand of 100,000t exists. So there is no reason for the $10B market size to grow, if $10B can now buy multiple times the upmass demand that exists in the entire world.

Put differently, while Starship will open up the market for in-space activities tremendously, it wonít increase the size of the LAUNCH market. It will still be ~$10B. Only now you will have to launch ten twenty times more often at a tenth twentieth the price per launch, to generate the same revenue you would have in the pre-Starship days. If you donít, you will be too expensive to compete.

This is not making launch business cases more feasible. It is instead destroying them.

The Transporter program has brought multiple new companies and VCs into the market. Maybe a rounding error on $10B but it has brought new ideas and people to the industry.

Iím talking about the LAUNCH market, not the broader SPACE market. Which new LAUNCH companies have been brought to the market by the Transporter program as you claim?

Offline Hyperborealis

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #54 on: 02/10/2023 12:03 pm »
We've already seen how lower launch costs, with Falcon 9, has created a new market segment, LEO megaconstellations, whose economic and military potential has spurred a raft of competitors. In fact Starship itself is SpaceX's own response to the lauch competition Falcon 9 instigated.

There's no reason why Starship should end this virtual cycle. There will future competitors to Starship. If the small sat launchers go out, it will be since they misread the market, and invested in an unviable technology.

Thinking of SpaceX as predatory is just a way of fooling yourself, and not taking responsibility for making a bad business call.

Offline imprezive

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #55 on: 02/10/2023 02:23 pm »
I see a lot of people on this thread assigning a single clear motive for their pricing.  In my experience decision making is rarely that simple and they likely have a mixture of motives that feed into their strategy.  I could think of several possibilities beyond the desire to suppress competition but there is one that I'd love to know whether or not it played a role in their decisions, if at all.

When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.  The existing players in space and the amount/types of skilled labor in the space industry at present are not prepped to fully leverage a massive expansion in inexpensive launch capacity.  What is needed is a large boost to entrepreurism to bring in new blood on both the business and workforce end of things to create a situation where innovation can build an ecosystem which finds new uses for this launch capacity.  I have to wonder if spacex is thinking long term enough to be trying to foster the next generation of customers via inexpensive rideshares now.

I find it helpful to think of the commercial launch market as a finite pie - potentially worth about $10B. Those who forecast tremendous growth to this market in my view do so without taking into account what the arrival of Starship actually means.

If Starship achieves 100t to orbit for $10M, that will mean Starship can launch 1000 times a year in a market worth $10B. Thatís 100,000t to orbit.

Outside of Elonís Mars colonisation program, itís gonna take multiple decades before an annual payload demand of 100,000t exists. So there is no reason for the $10B market size to grow, if $10B can now buy multiple times the upmass demand that exists in the entire world.

Put differently, while Starship will open up the market for in-space activities tremendously, it wonít increase the size of the LAUNCH market. It will still be ~$10B. Only now you will have to launch ten twenty times more often at a tenth twentieth the price per launch, to generate the same revenue you would have in the pre-Starship days. If you donít, you will be too expensive to compete.

This is not making launch business cases more feasible. It is instead destroying them.

The Transporter program has brought multiple new companies and VCs into the market. Maybe a rounding error on $10B but it has brought new ideas and people to the industry.

Iím talking about the LAUNCH market, not the broader SPACE market. Which new LAUNCH companies have been brought to the market by the Transporter program as you claim?

Youíre talking about the LAUNCH market being a finite pie. But the LAUNCH market is a market of SATELLITE companies that is served by LAUNCH companies. So yes if new SATELLITE companies are coming into being because of Transporter it impacts the LAUNCH market.

Online M.E.T.

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #56 on: 02/10/2023 02:53 pm »
I see a lot of people on this thread assigning a single clear motive for their pricing.  In my experience decision making is rarely that simple and they likely have a mixture of motives that feed into their strategy.  I could think of several possibilities beyond the desire to suppress competition but there is one that I'd love to know whether or not it played a role in their decisions, if at all.

When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.  The existing players in space and the amount/types of skilled labor in the space industry at present are not prepped to fully leverage a massive expansion in inexpensive launch capacity.  What is needed is a large boost to entrepreurism to bring in new blood on both the business and workforce end of things to create a situation where innovation can build an ecosystem which finds new uses for this launch capacity.  I have to wonder if spacex is thinking long term enough to be trying to foster the next generation of customers via inexpensive rideshares now.

I find it helpful to think of the commercial launch market as a finite pie - potentially worth about $10B. Those who forecast tremendous growth to this market in my view do so without taking into account what the arrival of Starship actually means.

If Starship achieves 100t to orbit for $10M, that will mean Starship can launch 1000 times a year in a market worth $10B. Thatís 100,000t to orbit.

Outside of Elonís Mars colonisation program, itís gonna take multiple decades before an annual payload demand of 100,000t exists. So there is no reason for the $10B market size to grow, if $10B can now buy multiple times the upmass demand that exists in the entire world.

Put differently, while Starship will open up the market for in-space activities tremendously, it wonít increase the size of the LAUNCH market. It will still be ~$10B. Only now you will have to launch ten twenty times more often at a tenth twentieth the price per launch, to generate the same revenue you would have in the pre-Starship days. If you donít, you will be too expensive to compete.

This is not making launch business cases more feasible. It is instead destroying them.

The Transporter program has brought multiple new companies and VCs into the market. Maybe a rounding error on $10B but it has brought new ideas and people to the industry.

Iím talking about the LAUNCH market, not the broader SPACE market. Which new LAUNCH companies have been brought to the market by the Transporter program as you claim?

Youíre talking about the LAUNCH market being a finite pie. But the LAUNCH market is a market of SATELLITE companies that is served by LAUNCH companies. So yes if new SATELLITE companies are coming into being because of Transporter it impacts the LAUNCH market.

Now all you need is 100,000t of new satellites each year, in order to exceed $10B worth of Starship payload capacity.

Once you have that, then the market will start growing. So then, how long do you reckon it will take for the market to require more than 100,000t of upmass in a single year?

Offline Blackjax

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #57 on: 02/10/2023 03:21 pm »
<snip>
When starship arrives, it is going to be seriously lacking payloads to fill even a modest fleet of vehicles.
<snip>
Will disagree. Starlink v2 comsats and propellants to orbital depots will be the vast majority of payloads for Starship.

I probably should have explicitly stated 'commercial payloads' but it was implied.  I agree that initially things will look largely as you say but the question is how they grow beyond having to rely overwhelmingly on themselves to generate payload volume.  EIther they care about that and their rideshare pricing might reflect that, or they don't care, expect to rely mainly on internally generated payloads, and all the assertions we are seeing that their rideshare pricing is to suppress competition might not hold water.  You don't care much about suppressing competition if you expect most of your business to come from yourself. 

A person might think that capturing an even larger share of the existing market via competitive hijinks might do it but it doesn't, even 100% of the current commercial market is still small compared to the payload capacity of even a small starship fleet.  The whole pie needs to grow a lot not just the percentage of the pie they can claim.  If you were spacex, how would make the pie grow?
« Last Edit: 02/10/2023 03:25 pm by Blackjax »

Online trimeta

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #58 on: 02/10/2023 03:33 pm »
Now all you need is 100,000t of new satellites each year, in order to exceed $10B worth of Starship payload capacity.

Once you have that, then the market will start growing. So then, how long do you reckon it will take for the market to require more than 100,000t of upmass in a single year?
But why won't Starship shrink the "launch market"? If they're offering more payload for lower prices, surely the same number of satellites could launch for less, thus lowering the value of the market as a whole. Your insistence that the market value has been, is, and always shall be $10 billion despite massive changes in launch vehicles and the payloads they carry makes no sense.

Online DanClemmensen

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Re: Impact of SpaceX rideshare on small sat launchers market
« Reply #59 on: 02/10/2023 03:36 pm »
Now all you need is 100,000t of new satellites each year, in order to exceed $10B worth of Starship payload capacity.

Once you have that, then the market will start growing. So then, how long do you reckon it will take for the market to require more than 100,000t of upmass in a single year?
It's not going to be about upmass. It's more about launch cadence. One SH plus maybe four cargo SS will be able to launch once a day with payloads per launch of from 1 kg to 150 tonne. Operations will be highly automated and efficient, so per-launch cost will be below $10 million plus the cost of any non-standard payload handling.

For max payloads, this would be 53,400 tonne/yr. For a reasonable payload average of 50 tonne, this is 18,250 tonne/yr.

If the world needs more than 365 launches/yr, just launch more than once a day. You will need to increase from four SS up to six SS or eight SS. to double or triple the launch rate.

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