Amazon’s $11 Billion Satellite Expansion Brings Key Agreement With Apple

Amazon's Jeff Bezos.

Following up on the rumblings we discussed in our opening comments on Tuesday, Amazon (AMZN) has agreed to purchase Globalstar (GSTAR) for a reported $11.5 billion to further its Amazon Leo efforts. The deal, which is subject to regulatory approvals, is expected to close in 2027.

Amazon’s Leo effort currently has about 220 satellites in orbit, but it is reportedly in the process of rapidly deploying about 3,200 satellites in Earth's low orbit by 2029. As part of that timeline, it is required to have roughly half in place by July to meet a regulatory deadline. Globalstar has about 25 active satellites in orbit, and that system is optimized for satellite phone, IoT, and Apple’s (AAPL) satellite messaging services. Beginning in 2028, Amazon Leo will deploy its own next-generation D2D satellite system, allowing Amazon to deliver more advanced voice, data, and messaging services to mobile phones and other cellular devices.

In the recent Amazon shareholder letter, CEO Andy Jassy shared the following about Amazon Leo:

"While Amazon Leo is officially scheduled to launch in mid-2026, we already have meaningful revenue commitments from enterprises and governments. Most recently, Delta Airlines, the highest grossing airline in the world, has announced it’s chosen Amazon Leo for its future Wi-Fi, and will begin with 500 planes in 2028. They join other Leo customers like JetBlue, AT&T, Vodafone, DIRECTV Latin America, Australia’s National Broadband Network, NASA, and others."

In addition, Amazon is expected to roll out satellite internet services later this year and reports intimate Amazon will work with mobile network operators and others to deliver “reliable, high-speed connectivity to customers, no matter where they are in the world.”

If you’re thinking this sounds a lot like the pitch offered by Starlink, we agree with you.

That gives us another reason to pay close attention to next week’s SpaceX analyst day. Estimates put Starlink at more than half of SpaceX’s revenue stream across 10 million active customers across enterprise, aviation, maritime and consumer sectors. Notable customers include Hawaiian Airlines as well as United Airlines (UAL) and others.

Amazon Leo and Apple

Alongside the Globalstar news, Amazon also announced it had inked a deal with Globalstar partner and part-owner, Apple.

Per that agreement, Leo satellite services for iPhones and Apple Watches will allow users to text emergency services, message friends and family, share location and request roadside assistance when they are beyond the reach of terrestrial cellular networks.

With the new Amazon-Apple agreement, Amazon will continue to support iPhone and Apple Watch models currently using Globalstar's existing and planned upcoming low Earth orbit satellite constellations. Amazon will also collaborate with Apple on future satellite services using Leo's expanded satellite network.

Our Thoughts

The move to acquire Globalstar is one that bolsters Amazon’s Leo plans, and conceptually, we like the incremental subscription revenue streams it could bring to Amazon over time. That service business would help lessen the influence and seasonal swings of the digital shopping business on earnings over time, much like we’ve seen with Apple and are starting to see with Axon (AXON) . We’ll be interested to learn more about this effort, including how the margins will stack up against Amazon Web Services and any incremental capex spending may be needed.

While the price tag for the transaction is $11.5 billion, Globalstar shareholders can elect to receive either $90 in cash or 0.3210 shares of Amazon common stock for each ⁠Globalstar share they own. In 2025, Amazon generated almost $140 billion in operating cash flow and ended 2025 with $90 billion in cash.

We expect Amazon to speak to this announcement when it reports its Q1 2026 earnings, but in typical Amazon fashion, odds are it isn’t going to say much. Hopefully, we’ll be surprised.

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At the time of publication, TheStreet Pro Portfolio was long AMZN, AAPL and AXON.