Slow Growth Forecast in Satellite Manufacturing and Launch Market
The satellite manufacturing and launch market is poised to see incremental growth to $3.91 billion through 2026, according to a new report from Technavio.
According to The "Satellite Manufacturing and Launch Market by Application, Product and Geography - Forecast and Analysis 2022-2026", the market is being driven by the reduction in associative launch cost. Several companies that offer launch services for satellites are investing in R&D to develop cost-effective launch systems. Also, the highly competitive nature of the satellite industry is resulting in a decrease in the cost of launching satellites.
For instance, before the release of the Ariane 6 rocket in 2020, Arianespace, which is a part of ArianeGroup, has decided to decrease its satellite launch fee by 40% to compete with SpaceX. The decision was a strategic move as the company was contending for two major launch contracts in APAC, which were scheduled for release in 2019. Besides, the advent of reusable satellite launch vehicles such as the Falcon 9, which is offered by SpaceX, is also decreasing the total cost of satellite launches. As a result of these factors, the size of the global satellite manufacturing and launch market is expected to increase over the forecast period.
Key Drivers in the Satellite Manufacturing and Launch Market
The communication satellite segment will have the largest share of the satellite manufacturing and launch market. The surging demand for new satellites due to the rapid expansion of coverage area for mobile data services is driving the growth of the segment. Also, the expansion of satellite broadband internet services and an increase in the demand for direct-to-home (DTH) services are contributing to the growth of the segment. The satellite launch segment accounted for maximum revenue generation in the market in 2021. The increasing demand for satellites for a plethora of applications ranging from military surveillance, communications, and navigation to earth observation is driving the grow of the segment. In addition, increased investments by several countries in the development of indigenous satellite programs is contributing to the segment's growth.
North America will account for 37% of the global market share over the forecast period. The presence of prominent satellite manufacturing and launch firms such as NASA and SpaceX has propelled the satellite industry in North America.
(Source: Technavio. Infographic provided. Image from file)