Amazon Pushes Project Kuiper Into 2023. Should Investors Worry? – The Motley Fool - 1Home

Amazon Pushes Project Kuiper Into 2023. Should Investors Worry? – The Motley Fool

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, […]



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2022 is almost gone, and as the calendar flips to 2023 it may finally be time for the United Launch Alliance (ULA) Vulcan rocket to fly.
Initially expected to debut in 2019, first flight for the newest space rocket from ULA joint venture partners Boeing (BA 4.03%) and Lockheed Martin (LMT 2.59%) has been pushed back and back and back again — to the point that ULA now says Vulcan’s maiden flight will come in “early 2023.” ULA managers aren’t the only ones crossing their fingers and hoping this latest deadline gets met, however.  
Also waiting with bated breath is Amazon.com (AMZN -1.44%).
Whenever Vulcan launches, you see, it will carry Amazon’s first two “Kuipersat” internet broadband satellites into orbit. Designed to test out a system that will one day compete with SpaceX’s high-profile Starlink satellite internet service, these first two Amazon satellites will piggyback on a mission initially designed to carry another company’s lunar lander to the moon.
You may recall that, as recently as a year ago, Amazon had tapped tiny space start-up ABL Systems to launch its two new satellites into orbit, with a launch date set for late 2022. As it turns out, ABL’s RS1 rocket isn’t quite yet ready for prime time, though, so Amazon is switching launch providers and asking ULA to help out.  
As Amazon admitted in a late-October update, ABL wasn’t entirely at fault for delaying the Kuipersat mission into 2023. Amazon itself hadn’t yet completed building Kuipersat-1 or Kupersat-2, at the time saying only that it would be done “later this year.” It’s not yet known if that has been accomplished, but with an FCC-imposed 2026 deadline for completing half of its launches looming ever closer, Amazon can’t afford any more delays. Instead of waiting for ABL, it will hitch a ride with ULA.
(ABL isn’t losing Amazon’s business entirely. With more than 3,200 satellites it needs to launch, Amazon is still keeping ABL in the lineup for two launches, if and when its RS1 is up to the task.)
Next year’s Kuiper launch will be the first of 47 Kuipersat missions Amazon hopes to launch with ULA, 38 of which will fly on new Vulcan rockets, with the other nine riding ULA’s Atlas V rocket, which Vulcan is replacing. In addition to ULA (and ABL), Amazon also intends to send up satellites 18 times with Arianespace, and “up to 27” times with Amazon’s cousin company, Jeff Bezos-founded Blue Origin.
Amazon describes its switch from ABL to ULA for its first launch as “a chance to practice payload integration, processing, and mission management procedures ahead of those full-scale commercial launches.” Looked at that way, the decision to launch with ULA makes some sense, and may save Amazon some time working out these details later on.  
It’s also worth pointing out that this latest delay may at least be the last such delay Amazon must account for. Step by step, other obstacles to a Q1 2023 launch have already been knocked out. On Oct. 31, for example, Blue Origin confirmed that it has finally shipped both of the BE-4 rocket engines needed to outfit ULA’s Vulcan for flight. Two weeks later, Vulcan’s primary customer, Astrobotic, confirmed that it has shipped its Peregrine lunar lander to ULA to be loaded aboard the Vulcan.     Now, all that’s needed is for Amazon to finish building its satellites, get them delivered to ULA, and loaded alongside the Peregrine. At that point, only bad weather could conceivably interfere with an on-schedule launch, and the long-awaited beginning of Project Kuiper.
So… fingers crossed. With plans to sink at least $10 billion into Project Kuiper, Amazon has a lot riding on this project. Given the challenges, I honestly don’t have a lot of hope that it will succeed, and there’s a non-zero chance Amazon’s $10 billion investment will go down in flames.
Just beginning to build its satellite internet constellation, Amazon is starting out way behind SpaceX, which already has 3,232 Starlink satellites in orbit, hundreds of thousands of paying customers, and more than two years of successful operation behind it. But at least Amazon looks finally ready to leave the starting gate, and when that happens, Amazon investors can breathe a sigh of relief.    
With ULA on its team, at least, Amazon won’t now fall any farther behind.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
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