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AST SpaceMobile (NASDAQ: ASTS) stock crashed to Earth on Wednesday, falling 9.3% through 9:55 a.m. ET, while rival satellite company Globalstar (NYSEMKT: GSAT) lost a staggering 27% of its market cap.
Shares of both direct-to-cell (DTC) satellite communications pioneers tumbled on news that their biggest rival, SpaceX, is linking up with T-Mobile US and Apple to expand usage of its Starlink satellite internet service.
What's SpaceX up to today?
"Apple Inc. has been secretly working with SpaceX and T-Mobile US Inc. to add support for the Starlink network in its latest iPhone software," reports Bloomberg this morning. The news agency notes that an iOS update that came out Monday contains code that will support Starlink communications technology.
The change has implications for both AST and Globalstar. Apple famously partnered with Globalstar in 2022, planning to use the latter's satellites to provide emergency phone text service to iPhones that are in cellphone "dead zones." So far as we know, this is still the case. But now Apple may be preparing to switch horses to SpaceX and its much more numerous constellation of direct-to-cell-capable Starlink satellites -- which T-Mobile has already partnered with.
Starlink on Monday kick-started beta service on this partnership, calling it "T-Mobile Starlink beta." iPhone users on T-Mobile's network began receiving text messages urging them to update to iOS 18.3 to access the service.
How bad is this news for AST SpaceMobile?
Meanwhile, AST SpaceMobile is still trying to get its own direct-to-cell satellite service up and running. The company launched its first five operational BlueBird DTC satellites last summer, but has yet to announce beta service with them.
In contrast, Starlink announced in December that it already has more than 300 DTC satellites in orbit, and has completed its "first orbital shell," meeting the precondition that would allow it to launch beta service.
AST may have started the space race to turn ordinary terrestrial smartphones into functional satphones, but SpaceX is winning it today. This, in a nutshell, is why AST (and Globalstar) stocks are going down.
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