Amazon's Kuiper satellite project may impact retail margins, facing capital-intensive challenges.

From Investing.com: 2024-12-22 04:30:00

Amazon’s Kuiper satellite project raises concerns about its impact on retail margins. Barclays estimates Kuiper’s losses to peak at $3.3 billion in 2025, causing an 80-basis-point drag on operating income margins. Despite this, there is potential for significant upside in retail OI margin. Kuiper operates in a $61 billion market but faces capital-intensive challenges, with each rocket launch costing up to $150 million. Amazon is expected to introduce Kuiper’s service around mid-2026, leveraging e-commerce and Prime ecosystems for competitiveness. The industry could become a two-player market with SpaceX’s Starlink, allowing Amazon to achieve margin improvement and fund long-term initiatives like AI and grocery. Retail OI and Kuiper’s impact will be a key discussion for Amazon in the coming months.



Read more at Investing.com: How will Amazon fund Kuiper? Barclays weighs in By Investing.com