COLORADO SPRINGS — An Amazon executive said the cost to produce antennas for its proposed Project Kuiper megaconstellation is already “well under $500,” even as SpaceX retreats from the subsidized $499 price it charges customers for its operational Starlink terminals. 

“I actually think we can go lower, but when you get under $500 you can then start penciling out a business model that scales broadly, globally,” Dave Limp, senior vice president for Amazon Devices and Services, said during the 37th Space Symposium April 5 here. 

Amazon has been leveraging its experience in producing low-cost devices at scale, including Echo smart speakers and Kindle e-readers, to bring down manufacturing costs for an antenna that Limp said is about the size of an LP record.

He said the antennas, and the 3,236 satellites envisaged for the constellation, are also using custom microchip designs that Amazon is developing in-house to improve performance.

Amazon has not released pricing information for Project Kuiper user equipment or internet service. The company has yet to launch a single Kuiper satellite, but announced April 5 launch agreements with Arianespace, Blue Origin and United Launch Alliance that covers up to 83 launches over five years.

SpaceX, in contrast, has launched more than 2,330 Starlink satellites to date and is serving customers in some 30 nations.

SpaceX had been charging U.S. Starlink customers $499 for hardware and $99 per month for service. In March, however, SpaceX cited inflation in announcing price hikes. U.S. customers will now pay $549 to $599 for the hardware, depending on when they placed their order. The cost of the service increased to $110.

Bringing down the cost of user terminals to meet price points that encourage widespread adoption is one of the greatest challenges that broadband megaconstellations face.

Gwynne Shotwell, SpaceX’s president and chief operating officer, told the 36th Space Symposium last August that the company was losing money on user terminals with every customer it acquires, because the cost to make them is higher than the average user can afford.

She said SpaceX aimed to cut production costs in half by the end of 2021, and then by half again at a later date. It is unclear whether pandemic-related supply chain issues that have slowed the delivery of Starlink antennas to customers have impacted these plans. 

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...