NSR’s Flat Panel Satellite Antennas, 2nd Edition report forecasts FPA sales to exceed 2.1 million annual shipped units in 2026, growing at a healthy CAGR of 36.3% over the next decade. However, to reach these volumes, demand will need to rapidly increase together with technological innovation across the value chain. At the same time, price and performance are the two most limiting factors for FPA market growth, especially in markets where FPAs compete directly with established, more traditional, equipment. In some cases, price prioritizes higher than performance, as Boeing found out in the face of bringing more efficient, but more expensive, antennas to market.
NSR evaluated FPA market elasticity by conducting a thorough price sensitivity analysis, comparing market demand and growth in each market vertical, and the consequent effect on antenna pricing. Considering the typical fiscally-prudent nature of maritime fleets, the ambiguity in antenna payment in the automotive sector, the rising demand for in-flight connectivity in aero, and the difficulty in competing with wide-spread, lower cost, sometimes higher-performing traditional equipment, it is not surprising NSR found 50% of FPA verticals show pricing elasticity in the market.
Small but Significant Elasticity at Sea
FPA potential in commercial maritime has been contentious, where pricing, antenna mounting, efficiency, and even physical limitations of performance at sea have been impediments to greater penetration. However, data usage is on the rise, and the demand for a flatter, more streamlined profile, in the passenger segment especially, is making waves.
An analysis of the erosion of commercial maritime FPA prices, in response to shipped unit growth and market penetration, revealed a slightly elastic market, but only in the High Growth Scenario, which assumes strong market penetration corresponding to over 14,000 shipped FPA units by 2026. The scenario is driven by the assumption that certain challenges of performance and integration are overcome.
This is consistent with the user-profiles in the various maritime segments. Currently, FPA demand is primarily driven by leisure craft and cruise ship operators, looking to improve performance, aesthetics, and rise above the competition. Here, end-users are typically less concerned with price than the rest of the maritime market.
Replacing traditional VSATs will not be easy, as currently lower-performing FPAs necessitate an array of antennas, taking more valuable deck space and counteracting a main selling point of flat panel technology. However, should commercial maritime FPA prices and performance become more comparable with VSAT equipment, it is expected that market adoption will greatly increase across all maritime segments going forward, as reflected in the High Growth forecast.
Undercutting Enterprise VSAT Competition
The potential for low-latency communications offered by LEO satellites is a proposition of value for Enterprise Broadband end-users especially. However, the speed at which these satellites pass overhead calls for considerably faster beam-acquisition, steering, and tracking from antennas. Electronically-steered flat panel antennas may prove capable of meeting these requirements and making a play in this market, if certain conditions are met.
The analysis of enterprise broadband FPA prices, in response to market demand, revealed strong pricing elasticity, but only after a significant volume was reached within the market. Pricing remains inelastic until after 100,000 units are shipped, at which point competition drives down prices considerably. This reflects the issue of making cheaper antennas to compete more directly against established VSAT equipment.
A price difference of less than $100 between the Low Growth and Base Scenario resulted in 200,000 more units shipped over the forecast. As ARPUs are generally higher from enterprise broadband customers than from consumer broadband, undercutting the price of the FPA for improved market penetration may not be a bad option for service providers.
The Bottom Line
Due to already sizable investment in FPA research and development, from various players, there is considerable pressure to bring flat panel antennas to market. Tests, trials, and partnerships such as between Kymeta and Panasonic, Phasor and GoGo, are pushing technological development of FPAs to provide new opportunities and better compete in several market verticals. Performance is a severe limiting factor for FPA deployment, as shown by the long development times and the current range of readiness of FPA technology. Low throughputs, side-lobe regulation, noise, and beam-steering requirements are some of the many issues cited as keeping FPAs off the competitive market.
However, several new products are poised to come to market in the next few years and, should their performance better compete with VSAT equipment, price will be the leading decision factor for market adoption, and if not prioritized properly, will be the main reason FPAs are not successful in the market.