Smaller is getting bigger in the satellite business

by Takashi Amano

Bloomberg

As emerging space pioneers in China and India race to the moon and Mars, private-sector startups are quietly launching satellites the size of microwave ovens that aim to satisfy much more terrestrial desires.

Axelspace Corp. in November launched a micro-satellite from Yasny, Russia, that the Tokyo-based company says will help vessels navigate icebergs in the Arctic. Mountain View, California-based Skybox Imaging Inc. is planning a constellation of 24 orbitals to offer high-definition video of everything from the Somali coastline to Las Vegas traffic.

As governments turn to private investors to fill gaps in their budget-sapping programs, the space race is expanding from $500 million minibus-sized probes used for broadcasting and espionage to machines built from off-the-shelf parts. In Japan, micro-satellites are putting remote-sensing services within the reach of more businesses as Prime Minister Shinzo Abe promotes space development to tap the global wave of commercialization.

“The micro-satellite revolution is turning space capabilities into a commodity,” said Brian Weeden, a technical adviser to the Secure World Foundation, a Broomfield, Colorado-based group that supports sustainable space development. “Soon it may be feasible for small businesses, NGOs or even individuals to have access to space capabilities.”

U.S. companies have been leading the commercial push, following the 2011 decision to retire the shuttle fleet. Elon Musk’s Space Exploration Technologies Corp., known as SpaceX, last year docked a commercial craft at the International Space Station. Last month, it beat out fellow billionaire Jeff Bezos’ Blue Origin LLC to lease a mothballed Kennedy Space Center launchpad.

The space race in Asia is accelerating as countries compete for prestige and technologies that offer both military and commercial benefits. In November, India launched a rocket carrying a satellite destined to go into orbit around Mars, a feat only the United States, Europe and Russia have achieved. China landed its first unmanned vehicle on the moon last month.

Axelspace’s first commercial micro-satellite cost about ¥200 million ($1.9 million), the equivalent of a commercial helicopter, the company says.

“We want to enlarge the market and create new commercial opportunities in which the public can use images from satellites,” Chief Executive Officer Yuya Nakamura said. “We want micro-satellites to be infrastructure.”

Axelspace plans to raise about ¥1.5 billion this year from venture capital funds, said Nakamura, who is targeting ¥2 billion in sales by the year ending in May 2019. The startup began six years ago with the help of a new business subsidy from the government after its founders met while in college.

Axelspace is competing with other startups, like Skybox, which launched its first micro-satellite in November and plans to work with companies that will analyze the data it collects and then provide those services to businesses.

Skybox, whose satellites can monitor the number of cars in a parking lot or gauge the oil in storage tanks, has raised $91 million in venture capital. The probes can identify and quantify objects as small as one meter, Chief Product Officer Dan Berkenstock said.

“There is a sea change happening in the space sector today that is being driven by lower costs of launch and the increasing capabilities of commercial electronics in space,” Berkenstock said.

Smaller probes are increasingly able to take on roles previously reserved for larger, much more expensive and mostly government-financed satellites, he said.

The shift mirrors the transition to personal computers from large-scale commercial mainframe systems, he said.

Micro-satellites typically weigh less than 100 kg, are cheaper to build and can’t gather imagery as granular as larger-scale orbitals that can identify smaller objects. The machines maintain lower orbits than geostationary satellites that are often used to transmit broadcast signals.

Space spending grew almost 7 percent to a record $304.31 billion in 2012, according to a report from Space Foundation, a Colorado Springs, Colorado-based nonprofit. There were 78 orbital launch attempts in 2012, and there were 81 last year, according to the Space Launch Report.

Axelspace reduces costs by using over-the-counter components available from electronics makers like Panasonic Corp. and Murata Manufacturing Co. With 30 satellites planned for operation in 2020, the company will be able to provide hourly images to clients that could be used to monitor Tokyo traffic jams, said Yuta Nojiri, a director at the company.

A smartphone has more processing power than nearly any of the satellites now in orbit, according to Secure World’s Weeden.

The government-supervised Japan Aerospace Exploration Agency has guided the space industry until recently, said Kazuhiko Muto, a director at the Ministry of Economy, Trade and Industry.

“Now there is a move into the private sector, we are entering a new phase,” he said.

Mitsubishi Heavy Industries Ltd. said in September it received its first order to provide launch services for a commercial satellite. The company said it plans to aggressively market its satellite launch service in Japan and overseas using the H-IIA rocket, which has carried out 21 of 22 launches successfully.

Axelspace’s 10-kg WNISAT-1 orbital is equipped with cameras that monitor spectral bands of blue, green and red that help detect icebergs. The machine, which was launched Nov. 21, will help vessels navigate the Northern Arctic Route as global warming melts ice previously blocking the way.

Demand for Earth-imaging services may eventually be driven by consumers, said Saadia Pekkanen, a professor at the University of Washington. “The question is: Who will have access to that information and what can be done with it?” she said.