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Amazon (AMZN, Financials) took a major step into the satellite internet business on Monday, launching its first 27 Kuiper satellites from Cape Canaveral. The move puts Amazon in direct competition with SpaceX's Starlink, as it works to build a global broadband network.
The satellites were carried into orbit by a United Launch Alliance Atlas V rocket, lifting off at 7 p.m. local time.
Project Kuiper is a $10 billion effort aiming to deploy 3,236 satellites. Amazon must have at least 1,618 satellites in orbit by mid-2026 to meet a Federal Communications Commission requirement.
Consumer terminals are expected to sell for under $400, with early service areas starting once 578 satellites are active.
Amazon says Kuiper is built to close connectivity gaps, focusing on rural areas where internet access is spotty or nonexistent.
While Amazon is late to the market compared to SpaceX's Starlink, Jeff Bezos believes there's enough demand for both services to succeed.
Amazon has leaned on its strengthsconsumer hardware and cloud servicesas it rolls out Kuiper. The company already tested two prototypes in 2023 and has lined up 83 rocket launches through deals with United Launch Alliance, Arianespace, and Blue Origin.
SpaceX has raced ahead with more than 8,000 Starlink satellites and 5 million users across 125 countries. Amazon's entry brings a heavyweight challenger into the market, one that could shake up internet access worldwide and open new opportunities for defense and enterprise customers.
All eyes are now on Amazon's ability to keep pace with its launch schedule and start serving customers by the end of 2025.
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This article first appeared on GuruFocus.