Apple committed around $1.5 billion to a satellite communications company global star to fund the expansion of iPhone services, the companies revealed in a securities filing Friday.
The tech giant's deal with Globalstar includes $1.1 billion in cash, of which $232 million will go toward the satellite company's existing debt, and a 20% equity stake. The deal is expected to close on Tuesday.
Apple has already spent hundreds of millions on Globlastar services, which enabled the 2022 launch of emergency satellite text messaging for the iPhone.
It is one of several efforts in the direct-to-device, or D2D, satellite connectivity market, serving unmodified devices, such as smartphones, directly from space, with other SpaceX projects underway. AST Mobile Space, Iridium, link and ecostar.
Globalstar shares rose 31.4% in Friday trading to close at $1.38 per share.
In the presentation, Globalstar noted that it will continue to allocate about 85% of its network capacity to Apple.
The new funds will allow Globalstar to purchase new satellites and expand its ground infrastructure. Globalstar currently operates 31 satellites and has already ordered up to 26 satellites to replenish and upgrade its low Earth orbit constellation.
