Iridium rises as William Blair calls possible Samsung deal 'significant positive'
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Iridium Communications (NASDAQ:IRDM) shares rose on Friday as investment firm William Blair called a potential deal with Samsung (OTCPK:SSNLF) a "significant positive" for the satellite constellation provider.
Analyst Louie DiPalma, who has an outperform rating on Iridium (IRDM) shares, noted that any potential deal for satellite connectivity for Samsung's S23 Galaxy smartphones would be "fitting," especially after the company said in July it was working with an "undisclosed partner" for smartphone satellite connectivity.
"In our view, the Iridium smartphone functionality will be more expansive than the Apple-GlobalStar iPhone 14 partnership, which only entails sending a message over satellite to first responders for an emergency 9-1-1 situation when the user is outside cellular range," DiPalma wrote in a note to clients.
DiPalma added that a potential partnership with Samsung could bring in at least $20M in revenue for Iridium (IRDM), but added that estimate could be "conservative."
In September, Apple (NASDAQ:AAPL) introduced the satellite feature as part of its new iPhone 14 lineup.
Earlier this month, Apple (AAPL) said it was investing $450M to get the feature, known as its Emergency SOS texting, off the ground, with the "majority" of the money going towards its partner, GlobalStar (NYSE:GSAT).
News of a potential deal between Iridium (IRDM) and Samsung (OTCPK:SSNLF) was first reported by South Korean publication ETNews.
Samsung's Galaxy S23 is expected to debut in February.
Late last month, Iridium Communications (IRDM) raised its full-year outlook for service revenue growth and OEBITDA based on strong momentum across all commercial business lines.