Market Growth Potential for Small Satellites: An Industry View

Abstract

The potential of small satellites has frequently been likened to the advent of the personal computer. The drive towards smaller space systems has unquestionably opened the doors to space for dozens of companies and countries. Indeed, the “faster, better, cheaper” mentality embraced by small satellite producers became an industry mantra. However, nano-, micro-, and mini-spacecraft remain a very small part of the overall space industry landscape. This paper examines an industry view of the potential of small spacecraft to create a PC-style revolution in the satellite industry.

Increases in the size of the small satellite market can come in two ways. Either small spacecraft will supplant larger ones in existing markets or they will create large new markets. To evaluate current and future small satellite penetration into the existing satellite market, the market is segmented into a matrix of three basic satellite types: LEO, GEO, and interplanetary, and four applications: communications, remote sensing, science, and weather. Although small satellites have made important strides, they do not dominate any of the identified market segments. Furthermore, small satellites suffer from fundamental weaknesses that are unlikely to be overcome by medium-term advances in small satellite technology.

If existing markets will not provide sizeable growth then the only remaining possibility is the creation of new markets. Historically, the market potential of most revolutionary advances does not come from the replacement of old technology but from the generation of entirely new products and services enabled by this new technology. The catalyst for this transformation is typically one new capability that itself warrants adoption of the new technology.

Advances in small satellite technologies will support modest advancements of the small satellite industry, but it is considered unlikely that they will cause any major shifts in the space industry in the near- to medium-term.