Apple Turned Down Musk's $5B Starlink Deal — Now the Consequences Are Mounting [Report]

A new report from The Information today details a previously undisclosed 2022 offer from Elon Musk to Apple regarding satellite connectivity for iPhones, and sheds more light on Apple's long and sometimes fraught history with satellite ambitions. The report highlights the complex relationship between the two tech giants as they navigate the emerging field of satellite-to-phone services.

According to two people with direct knowledge, Musk allegedly approached Apple just before the iPhone 14's announcement of Emergency SOS via Satellite with Globalstar. He proposed that Apple use SpaceX's Starlink service instead, offering an 18-month exclusive deal for a $5 billion upfront payment from Apple, which would then be followed by $1 billion per year. Musk reportedly gave Apple a 72-hour deadline and threatened to launch a competing feature if Apple declined. Apple ultimately rejected the offer. SpaceX subsequently announced a partnership with T-Mobile for satellite texting capabilities. The Information notes this failed deal added to existing tensions in Apple's relationship with Musk, who has since publicly criticized Apple on issues like App Store fees. SpaceX did not respond to The Information's request for comment.




The report reveals Apple's own satellite aspirations were once far more expansive. Beginning around 2015, Apple and Boeing reportedly discussed "Project Eagle," an initiative to deliver full wireless internet service to iPhones and homes using thousands of Boeing satellites. This project, led by Apple's then-wireless chief Rubén Caballero, involved around $36 million in testing. However, by the end of 2016, CEO Tim Cook reportedly canceled Project Eagle due to concerns about jeopardizing relationships with telecom carriers and the project's high cost and uncertain business case.

Following Project Eagle, Apple continued exploring satellite options. The Information states that in 2018, Apple had discussions with OneWeb and other providers about home internet services, but these talks did not progress. The company's focus then shifted to providing satellite communications to iPhones specifically in remote areas. After considering other providers, Apple eventually partnered with Globalstar, announcing a $450 million investment in U.S. infrastructure in 2022, largely for Globalstar, and committing an additional $1.7 billion in 2024. The report mentions internal concerns at Apple regarding the structure of the Globalstar deal and potential regulatory implications.

The rivalry continues, with The Information detailing how SpaceX has since challenged Globalstar's spectrum rights in FCC filings, even naming Apple, which reportedly vexed Apple executives. Apple is said to have hired Whitney Lohmeyer, a former FCC Space Bureau chief technologist, to manage these regulatory matters. Musk also reportedly asked Apple to support the T-Mobile/Starlink service on a broader range of iPhones, but Apple was apparently reluctant.

Internally, The Information reports skepticism about the long-term viability of Apple's current satellite service with Globalstar, with some former employees describing the network as outdated and limited. Apple has not yet charged for its satellite features, extending free access, reportedly in part due to fears of being regulated as a telecommunications carrier. The service is estimated to cost Apple hundreds of millions annually. Some top Apple executives, including software chief Craig Federighi, have reportedly questioned the project's necessity. The report also notes that Apple's push to develop its own wireless modem chips, like the C1 modem, was partly a result of its previous disputes with Qualcomm.


In a statement to The Information, an Apple spokesperson said: "When no carrier network is available, Apple offers its own satellite services focused on emergency services—like messaging, emergency assistance, roadside help, and location sharing—which have already helped save lives. Our features have been designed to complement carrier offerings, giving users an added safety net when carrier service is unavailable."

As competition in satellite-to-phone services heats up, Apple's cautious approach may leave room for rivals like Musk to shape the future of off-grid mobile connectivity.

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