With the space economy valued at $500 billion and growing, executives need to think about making space part of their strategy, managing partner Bob Sternfels and colleagues note. Launch costs have fallen 95 percent, as satellites increase cost performance and boost their capability improvements per size, weight, and power by harnessing the scale of commercial electronics such as semiconductors.
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A series of blue and gray circles show the proportional change in costs over time as multiples of the later much cheaper cost. Comparisons include a plasma TV, which was 5 times more expensive in 1997 than in 2007, and an IBM mainframe computer, which was 765 times more expensive in 1970 than an IBM PC in 1984. The examples highlight the rapid reduction in cost of satellites. Two cases are highlighted within the circles: a 2013 medium-resolution satellite cost ~3,500 times that of a medium-resolution satellite in 2022, and a 2016 high-resolution satellite cost ~333 times what a similar satellite cost in 2022. The overall impression is that cost performance for satellites has dropped impressively compared with other technologies.
Footnote 1: Prices are converted to 2022 dollars. Comparisons reflect products with similar end markets; however, they are not meant to construe perfect substitutes. Products may not be comparable on other factors (eg, satellites may not be comparable on data rates, signal-to-noise ratio, lifetime, but the increase is notable even on other dimensions, such as dollar per bit).
Source: American Enterprise Institute; Center for Strategic & International Studies; CPI inflation calculator, expert interviews; National Renewable Energy Laboratory; NCTA – The Internet & Television Association; McKinsey analysis
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To read the article, see “Space: The missing element of your strategy,” March 27, 2023.