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Boeing’s race to keep up with the satellite revolution is revealed

Boeing’s satellite facility is located in the huge industrial zone around Los Angeles International Airport, which has long served as a hub for the aviation and aerospace sectors in the United States. The plant was developed in the 1940s for Nash Motors, that rolled off the manufacturing line with its legendary Rambler. The land was purchased in the 1950s by Howard Hughes’ namesake aerospace company, which developed some of the world’s first commercial satellites there.

When Boeing bought Hughes’ space business in 2000, it inherited the facility. Today, it is home to Boeing Satellite Systems, one of the world’s major satellite makers and part of Boeing’s Defense, Space & Security division, which earned $14 billion in revenue in the first part of this year, accounting for over 43% of company’s total revenue.

In today’s rapidly increasing space business, Boeing is up against the stiff competition. Upstarts like SpaceX of Elon Musk are deploying leaner, lighter, and more technologically sophisticated satellites in response to increased demand for the broadband Internet service. Money has flowed into “space-tech” at unprecedented levels, with space-focused firms garnering over $7 billion in financing last year. Boeing, for its part, is now battling to maintain its lead in what has evolved into a modern-day space race.

“Technology is changing—you’re getting smaller satellites with bigger constellations, and how old guard will fight against that is something we’ll have to monitor,” says Ronald Epstein, an aerospace as well as defense equity analyst from Bank of America.

Boeing’s massive, 1-million-square-foot satellite site around LAX is the major battleground for an “old guard” firm trying to keep up with so-called new space economy. Bright fluorescent lighting beams down from the ceilings 100 feet above, giving the main factory floor the appearance of a huge white box. Boeing’s teams are currently working on cutting-edge satellites for Luxembourg-centered satellite provider SES, among the firm’s largest commercial customers.

Since the initial 1990s, when the satellite unit was still a component of the Hughes Space and Communications, the Boeing company has been building satellites for SES. SES and Boeing have joined together to construct an 11-satellite constellation that will operate in a medium orbit roughly 5,000 miles above Earth. The constellation’s purpose, known as the O3b mPower, is to supply clients with high-speed Internet and data connections, such as cloud computing providers, telecommunications firms, cruise ships, shipping lines, and airlines.

The satellites will replace a constellation of 20 SES satellites that were launched eight years ago and were constructed by Boeing competitor Thales Alenia Space. Boeing is assisting SES in expanding the capabilities of the original network by building a fleet of the smaller satellites which is going to operate in a quicker, more adaptable, as well as farther-reaching manner. The newest O3b mPower satellites are going to be approximately half the size of the predecessors but will have a data capacity of more than ten times that.