Micro-Launch Momentum: Assessing Europe's Position

In the dynamic landscape of the European space industry, a robust competition is unfolding among numerous privately-owned start-up companies, all vying to establish themselves as dedicated micro-launch providers.?

Micro launchers have a clear value proposition. Essentially, these vehicles offer a tailored launch experience for customers, characterised by a potential on-demand schedule involving multiple launches per year exclusively dedicated to smallsats. These companies are specifically targeting the growing demand for launching small satellites into polar and sun-synchronous orbits (SSO).? Additionally, customers have full control over mission parameters. The companies behind these micro launchers aspire not only to address existing limitations in space access solutions but also to create new opportunities for smallsat developers to explore and leverage in their space activities. Several European start-ups, approximately twenty at various stages of planning, development, or early testing, are making their mark in this space.?

Smallsats, with masses under 1,200 kg, are still gaining prominence for their suitability in higher latitude launches compared to their larger counterparts destined for geostationary orbits. Historically, commercial launches for smallsats were limited due to the dominance of medium and large launcher markets. However, with the increasing reliability and cadence of smaller launch vehicles, a critical question arises – will the commercial success of dedicated micro-launch providers be solely determined by launch prices?

Looking beyond the price tag

According to BryceTech data, a total of 2,402 Smallsats were launched in the year 2022.

In the realm of sales and marketing, product or service differentiation often dictates market success. Yet, in the dedicated micro-launch market, the sheer surge in small satellite launches, estimated at an average of 2,610 annually between 2023 and 2032 (according to Euroconsult ), prompts a re-evaluation of the significance of differentiation beyond mere pricing. For emerging micro-launch providers, the challenge lies in understanding whether customers prioritise the lowest launch cost or if other factors, such as environmental sustainability or national pride, hold sway.

Drawing insights from Elon Musk's approach in founding SpaceX, where cost-effectiveness played a central role, the micro-launch market could see a similar scenario unfold. Once reliability and a rapid launch cadence are established, the primary determinant of success might indeed become the cost of launching each pound of payload into orbit. The challenge for these emerging companies is to strike a balance between price competitiveness and other value propositions.

?While launch price is undeniably critical, it is equally important to recognise the potential value that dedicated launchers can bring beyond cost savings. Many micro-launch companies emphasise environmental sustainability, political benefits, and positive economic impacts as part of their value proposition. However, the question remains: do these factors carry more weight than achieving the lowest price for satellite operators?

An insightful analysis of Julian Hewson ? here on LinkedIn (https://www.dhirubhai.net/pulse/european-dedicated-micro-launchers-down-survival-cheapest-hewson-htfie/) emphasises that as the micro-launch market evolves, strategic pricing will play a crucial role in determining market share and profitability. Companies may employ various approaches, including cost-based pricing, immediate high-margin pricing for early launches, or offering service bundles to attract customers. As the market matures, pricing tactics may shift towards market-based pricing, where the perceived value to customers becomes a more dominant factor.

The dedicated micro-launcher market is not without its challenges. Many start-ups may face hurdles in terms of funding, timing, regulatory issues, and market positioning. The journey is expected to be a challenging one for most, with considerable investor risk. However, the rewards for successful companies will be substantial, opening-up new opportunities in space that were previously inaccessible.

In 2021, the Air and Space Academy of the Deutsche Gesellschaft für Luft- und Raumfahrt conducted an analysis stating that the European small launcher ecosystem requires active nurturing during this transitional phase. While the definitive public and private solution is yet to be determined and put into action, European stakeholders should confidently invest in the success of upcoming small launchers. Simultaneously, various initiatives are underway to invest in launch sites within Europe.

Despite the limitations in orbit characteristics that these proposed new sites can support, these initiatives are sparking novel concepts and ideas related to ground infrastructure and safety protocols. Importantly, these innovations need to be integrated into existing facilities in French Guiana, enhancing their practicality and cost-effectiveness.

In the coming years, the European dedicated micro-launcher market will be closely monitored as it navigates through the intricacies of pricing, market differentiation, and technological advancements. While launch price will undoubtedly be a significant factor, the ability of companies to innovate, adapt, and offer unique value propositions beyond cost savings will likely be the key to success. As the industry matures, the focus may shift from a price-driven competition to a more nuanced understanding of customer needs, pushing the boundaries of what is possible in the realm of small satellite launches.