The ability of Apple (AAPL) iPhones to connect to low-orbiting satellites could be the feature that drives more consumers to upgrade their smartphones rather than the much-hyped artificial intelligence apps, a telecom analyst says. Apple stock hit a record high on Wednesday.
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LightShed Partners analyst Walter Piecyk said Apple's plan to expand satellite connectivity to its iMessage app this fall has been an underappreciated factor that could spur iPhone sales. For now, Apple's satellite function has been limited to emergency services on iPhone 14 and 15 handsets.
With the iOS 18 software release, satellite connectivity can be used for regular text communications when people are out of the reach of terrestrial cellular towers. That includes cellular dead zones in the suburbs, Piecyk said in a blog post Tuesday. LightShed Senior Director Joe Galone co-authored the article.
On the stock market today, Apple stock notched an all-time high of 221.55. That was also its closing price for the shortened trading session. It rose 0.6% on Wednesday.
Service Uses Globalstar Satellite Network
Piecyk has been testing iMessage over satellite on his iPhone 15 Pro Max using a beta test version of iOS 18. He has used the texting feature in cellular dead zones in Westchester County, New York.
"It's performing better than I expected," he said. "Consumers may utilize this new functionality much more than most believe."
Apple has offered satellite connectivity through the Globalstar (GSAT) network since November 2022 after the introduction of the iPhone 14. The feature allows people in remote locations, such as a hiker in a national park, to send an "emergency SOS" to get help.
"Up to this point, Apple's (satellite) service has been limited to emergency services," Piecyk said. "However, the iOS 18 update this fall will expand satellite connectivity to the iMessage app in the United States."
Globalstar's network now includes 24 low-Earth-orbit satellites. It will add 17 more satellites to the constellation in 2025 to improve coverage and performance, Piecyk said.
Apple's emergency SOS service is currently active in 16 countries. The service is available for free for two years after the activation of a new iPhone.
Apple also offers roadside assistance via satellite in the U.S. for stranded motorists.
Apple Stock Is A Recent Breakout
Artificial intelligence features in iOS 18 and the upcoming iPhone 16 smartphones have grabbed most of the headlines, Piecyk said.
"Meanwhile, hype around satellite texting is virtually nonexistent," he said. "It may take some time, but the increased coverage offered by satellite texting could be a key factor in 2025 to invert the replacement cycle."
Piecyk predicted that Apple will extend satellite connectivity to apps beyond iMessage.
"Apple could sell this limited connectivity to any apps willing to pay for it — helping drive additional services revenue growth," he said. He suggested social network Meta Platforms (META) and others might be willing to pay for the capability.
Apple stock has an IBD Composite Rating of 89 out of 99, according to IBD Stock Checkup.
On June 11, Apple stock broke out of a cup base at a buy point of 199.62, according to IBD MarketSurge charts. It is now extended beyond the 5% buy zone of its breakout.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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