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Experienced satellite operators raise concerns over the price strategies of new space industry startups

A new startup in the space industry, NanoAvionics, is winning more contracts courtesy of its affordable charges. The chief executive of NanoAvionics, Brent Abbot, justifies that it all melts down to price when it comes to service providers’ choice. The executive admits that the firm’s expansion is thanks to their current market demand after lowering costs, their reliability in the industry, and their experience in orbits.

Experienced satellite operators are doubtful of the sweet deal, advising customers to evade the price facade. These operators stated this in a virtual meeting courtesy of SpaceNews. 

The lead technologist of LeoStella, Brian Rider, warns customers from going for low prices. LeoStella is a product of the collaboration between Thales Alenia Space and an imaging satellite operator BlackSky. 

Rider advises satellite service customers to observe NanoAvionics’ reliance, efficiency, and the firm’s implementation of its vision. Unless this firm proves its efficiency in fulfilling its contracts from both the operational and infrastructural levels, its low prices are just an impetuous lie.

The founder of Clyde Space, Craig Clark, who is the firm’s current chief strategist, advises customers to watch out for experience and critical achievements as factors for selecting their service provider. Additionally, Marco Villa, Tyvak International’s chief executive, advises satellite operators and customers to evaluate his firm’s track record and consistency in delivering spacecraft to space.

Villa explains that cost will eventually go down once technology advances and production goes on a spree of large scale. He reiterates that people will have to work with the quality and mission reliability after overruling costs. Satellite operators say that once economies of scale set at due to demand, then price will eventually go down.

Clark states that high production will lower the cost of satellite manufacturing, which customers will enjoy. Clark adds that they are yet to reach the production scale that will counter charge. NanoAvionics enjoys economics of scale by producing standardized cubesats with varying sizes.

Abbott states that they develop space vehicles with similar components with variances depending on the mission profile. Other procedures remain constant so that they can view a clear framework for adjustments. L3Harris Technologies also admits to using this concept to meet the orders and deals they have with governmental customers for their small satellites. 

Finally, Tim Lynch of the L3Harris Space and Airborne Systems Multi-Domain Architecture Group states that they have yo frequently other processes when they receive orders from Air Force and the Navy customers. These orders allow them to delve into the glory of economies of scale, a move that they respond to with differential production.