iPhone 14 Satellite Link: Apple cutting accord with Wireless Carriers

As Apple’s iPhone 14 event gets closer, rumors continue to swirl around the phone’s potential ability to provide emergency communications via a satellite network.

On Monday, noted analyst Ming-Chi Kuo said that Apple had “completed hardware tests for this feature” with the iPhone 14 and would have to negotiate a business model with carriers if it wanted to include it.

“Whether iPhone 14 will deliver satellite communication service relies on whether Apple and operators can settle the business model,” Kuo says this limitation may have already delayed the feature once the hardware that would’ve let the iPhone 13 communicate with satellites was finished.

Still, Apple couldn’t figure out the business end with carriers. As a result, Kuo and others famously predicted that the feature could show up in the 13, which didn’t end up happening.

The iPhone will “eventually” have satellite transmissions, but it’s “hard to indicate precisely when.” Suppose the feature now depends on negotiations with carriers, which could be easier to maintain under wraps. In that case, it makes sense that it’ll be harder to track its progress by analyzing the supply chain or code from betas.

Carriers may be incentivized to play hardball with Apple, given their interest in offering satellite connectivity features and plans. Last Thursday, T-Mobile revealed that it was working with SpaceX to launch its satellite-based emergency communications system, which it states will work with many existing 5G-capable phones.

Meanwhile, AT&T is working with a company called AST SpaceMobile, which aims to deliver broadband by beaming it to phones thru satellite. Verizon has also partnered with Amazon’s Kuiper satellite project. However, it seems to be concentrated on providing service to remote cell towers where it wouldn’t be practical to drive fiber or cable.

Since satellite networks typically work worldwide, Apple may also have to strike deals with international carriers and governments.

Harold Feld, an analyst at Public Knowledge, doesn’t necessarily think carriers will see this as a conflict of interest. Given how diverse the tech is and how far in the future specialties like T-Mobile’s “Coverage Above and Beyond” may be — the company says testing is slated to start by the end of the successive year.

“There’s no reason from the carrier attitude why this should be a problem unless they have some kind of exclusive deal with SpaceX not to utilize any other satellite service,” he said. He noted, however, “it’s kind of hard to know without understanding the business arrangements.”

Given Kuo and others’ projections that Apple is working with a company that already has its satellite communications network, it seems unlikely that this is a situation where Apple would need technology or spectrum rights from the carriers. However, during its presentation, T-Mobile said it would have to work with messaging app developers to make their systems compatible with its satellite tech. So if Apple wants to use the carrier’s SMS and voice systems in its satellite communications feature, it may be similar.

Feld offered a few ideas about what details Apple could have to hammer out with carriers. “It’s something that carriers might want to include in their advertising, in which case there may be some negotiations with Apple as to who gets credit for it, and the nature of their advertising, whether the carriers can include it in their coverage maps,” he said. “There are a lot of fortes that go into this.” Even things like whose name displays when the phone is connecting to satellites instead of cell towers could play into negotiations.

One other question that could hold things up — between the carrier, Apple, the satellite provider, and iPhone users, who ends up paying for satellite messaging, and how? “In the case of T-Mobile and SpaceX, that’s fairly straightforward. It looks like, at least from what we know, that would be upfront to T-Mobile with T-Mobile doing the billing, which is how carriers like it traditionally.

They like to maintain the relationship with the customer and include everything on one on one bill.” Feld said. “If Apple is working this deal separately with Globalstar and it’s going to bill for it separately, that may be a point of contention with the carriers.”

He also said that, from a technical and legal standpoint, Apple could include the chip without cooperation from the carriers. “Apple could always say, ‘Yeah, we’re sticking this chip in. What are you reaching to do, kick us off your network?’” Feld doesn’t think that’ll happen, though. “But the carriers are the guys you play with long-term. You want to ensure that your relationships with them are… friendly may be too much to hope for, but that you maintain good business relationships with the carriers, that there are no surprises, and that they understand.”