SpaceX has been selling Starlink dishes at loss despite $499 price tag
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The satellite dish SpaceX has been shipping to Starlink customers is actually worth far more than the $499 it’s charging its customers.
On Tuesday, SpaceX President Gwynne Shotwell revealed at a satellite industry forum that the company has been selling the satellite dish to subscribers at a sizable loss. It initially cost the company $3,000 to produce each satellite dish, according to CNBC.
The company has since reduced the manufacturing cost to $1,500, and then down to $1,300 through a new version of the satellite dish, which just rolled out. (A December report from Insider previously pegged the cost at $2,400 per dish.)
Shotwell says SpaceX has “made great progress on reducing the cost” of the Starlink user terminal.
Starlink terminals cost less than $1,500 each, she says, and SpaceX “just rolled out a new version that saved about $200 off the cost.”
— Michael Sheetz (@thesheetztweetz) April 6, 2021
The manufacturing costs are expected to fall even further to “the few hundred dollar range within the next year or two,” Shotwell reportedly said. That’s good news for users on a budget.
“I don’t think we’re going to do tiered pricing to consumers,” she added. “We’re going to try to keep it as simple as possible and transparent as possible, so right now there are no plans to tier for consumers.”
The other financial hurdle facing SpaceX is the cost of building and launching Starlink satellites, which beam internet data to the dish equipment. The company’s goal is to eventually operate thousands of such satellites in orbit to supply 1Gbps and higher broadband speeds.
“SpaceX needs to pass through a deep chasm of negative cash flow over the next year or so to make Starlink financially viable,” CEO Elon Musk tweeted in February. “Every new satellite constellation in history has gone bankrupt. We hope to be the first that does not.”
To recoup the investment, SpaceX is working to make Starlink available across the globe to tens of millions of subscribers in rural and remote areas where broadband access is slow or nonexistent. The $499 for the Starlink dish and Wi-Fi modem is a one-time fee. Users must also pay $99 a month to receive the internet service.
To sign up for Starlink, you can go to the official website, which will let you know if it’s available in your area. It currently can deliver median download speeds at around 80Mbps, according to data from Ookla’s Speedtest.
This article originally published at PCMag