Northern Sky Research

NSR’s Take on Thuraya’s SatSleeve for Android

Feb 4th, 2014 by Jose Del Rosario   More from this Analyst | Profile

In early 2013 Thuraya released the SatSleeve for iPhone, which gained significant interest both within and outside the satellite industry. Although compelling in terms of market needs, NSR commented in its research study Land Mobile and Handheld Satellite Markets that the SatSleeve was promising but ultimately limited in terms of the addressable market given it was tied to a single phone model. There was a much larger installed base of smartphones such that Thuraya may be missing a large part of the market potential. NSR said further that it is only a matter of time when a provider would introduce a SatSleeve-type product that captures a larger part of the smartphone market.

Lo and behold, in January 2014, Thuraya launched the latest edition of the Thuraya SatSleeve designed for Android-based smartphones, which is compatible with the Samsung Galaxy S3 and S4. Apart from enlarging its target market, the move is worth noting for a number of reasons:

  • First, although the installed base of the SatSleeve serving the iPhone market has not been publicly released, the latest move to target Galaxy users would appear to indicate that the market penetration is quite healthy where risk-taking to invest in a competing phone brand is justified.
  • Second, Thuraya now owns the trademark or the patent for iPhone and Galaxy where a kind of barrier to entry has to be overcome by competing service providers to offer a SatSleeve-type product.
  • What SPOT has done for Globalstar in terms of market branding and recognition, SatSleeve should do the same for Thuraya.

However, there is still the other limitation of Thuraya: coverage. And here, NSR foresees strategic partnerships between Thuraya and other competing providers to tap potentially highly lucrative non-Thuraya markets such as the U.S.

Should a partnership take place between Thuraya and one of its competitors where the SatSleeve becomes a global offering, one of the key metrics to watch is how the market penetration of other consumer handhelds such as Globalstar’s SPOT product and Iridium’s inReach perform over the short term. Thuraya SatSleeve has a built-in SOS button, which allows users to call one predefined number even without their smartphone attached. The safety feature of SPOT and inReach is the compelling proposition of that particular consumer product that can potentially be trumped by the SatSleeve given that users can send SOS and SMS messages, send and receive email, and access popular social media and instant messaging apps using existing smartphones in hand.  Basically, the SatSleeve can serve the safety needs of consumers as well as enterprise and government users while providing added features for consumer-oriented as well as enterprise applications.

Bottom Line

The consumer market via the success of Globalstar’s SPOT product has ushered in competition and creativity that could enable the satellite industry to reap high benefits over the short-to-long term. Indeed, press releases announcing the potential of consumer-oriented products have touted the latest offerings and developments as game changers.

Consumer-oriented products and services will unquestionably enjoy high market penetration in terms of getting these devices into the hands of consumers and professionals. NSR foresees that by 2022, Consumer Handhelds, the SatSleeve Form Factor and the Hotspot Device will account for 23% of the global Land Mobile and Handheld market in terms of in-service units. The mix among the three platforms can certainly change where, for instance, the SatSleeve can cannibalize the Consumer Handheld and thus record higher market share. However, the combined consumer-oriented offerings should account for less than a quarter of the installed base.

In revenue terms,  given that consumer services are highly price sensitive where ARPUs are quite low compared to key enterprise and government verticals, the long-term prospects of the SatSleeve, SPOT, inReach and other consumer devices are expected to be “niche”, accounting for about 13% of the overall market. That said, this “niche” translates to over $1.0 billion in service revenues in 2022 alone, a market that is certainly worth targeting and more importantly, dominating, as it could spell the difference between market failure and market success in the mobile satellite space.

Information for this article was extracted from NSR's report: Land Mobile & Handheld Satellite Markets