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Significant supply expansion for EO industry

Paris: 163 satellites (>50kg) were launched for civil and commercial Earth observation (excluding meteorology) over 2006-2015, said Euroconsult Managing Director Adam Keith. According to the 9th edition of Euroconsult’s report, Satellite-Based Earth Observation: Market Prospects to 2025, which will be released soon these satellites were launched for entities in 35 countries and generated $18.4 billion in manufacturing market revenues. Most of these satellites were launched by government operators to support policy objectives spanning climate change, sustainable development and industrial support. In addition, EO remains the primary application for emerging space programs; growing funding into these programs is a key driver for overall investment growth. In 2015 civil government investment topped $10 billion for the first time.

“The EO industry is going through a significant supply increase. Over the next decade, 419 satellites are expected to be launched generating $35.5 billion in manufacturing revenues,” said Adam Keith. “Significant growth in the number of commercial satellites launched in constellation is expected. When the number of satellites <50kg (such as the Planet and Spire constellations) are added, the number of supply solutions expands even further. As supply will increase faster than the demand for commercial data and services, some price pressure is expected to result. As well, operators will need to better differentiate themselves in the market place as to the capabilities of their respective systems.”

The value-added services market reached $3.2 billion in 2015, and is growing at a faster rate than the data market alone (11% 5-year CAGR). Key markets for value-adding services do not mirror those for commercial data sales. Defense, while representing 61% of the commercial data market, represents only 15% of the VAS market; conversely, infrastructure projects (such as cartography, cadaster, etc.) is only 10% of the commercial data market, but 33% of the value-added market. The reasoning for this is relatively straightforward; defense end-users purchase data with much value-added analytics performed in-house. On the other hand, lower-cost, coarser resolution and geolocation accuracy data can be leveraged with value-adding to form higher value products and services. This approach is expected in emerging location-based applications – the focus of upcoming satellite constellations. While the data may be lower-cost, it will be able to build applications based on high frequency change detection with the focus on the product or service delivery over purely data sales.