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> Starship could drive down launch costs, but it can't reduce the cost of the satellites themselves. You'll hit a floor where it could reduce costs, but not remotely enough to justify it.

You're assuming that satellites are so expensive that the difference between Falcon 9 and Starship is not relevant but we don't know this. Satellite hardware is usually very expensive but SpaceX is building them internally as a series product so they might be able to drive the marginal cost/unit much lower.

It's safe to assume constellation bandwidth (and potential revenue) scales linearly with total payload mass, meaning it is proportional to ($satellite_cost_per_keg + $launch_cost_per_kg). Unless satellite cost is much higher than launch cost there are benefits from switching to a cheaper launcher.

Since Falcon 9 design is mostly frozen and still requires throwing away an upper stage for every launch it has a price floor of its own. I honestly wouldn't be surprised if launch is already more expensive than satellites.

Elon has already said that Falcon 9 is the largest and most expensive part of Starlink, for Starlink to be fully successful it needs Starship.

Falcon 9 is limited by Falcon 9 second stage product.

> This makes no sense unless actual people are riding on it at some point.

It actually makes a lot of sense, if that performance gets you a cheaper vehicle.

> This is beyond conventional business risk, this is a leap of faith.

Starlink, the NASA Moon program, commercial sat buissness, SpaceX Mars Plans, SpaceX Space tourism and so on. A cheaper vehicle always has more usage.

I will concede all those points except for the last one.

> Starlink, the NASA Moon program, commercial sat buissness, SpaceX Mars Plans, SpaceX Space tourism and so on. A cheaper vehicle always has more usage.

Go back to basic college Econ. There is a supply curve and a demand curve. Reusable rockets allows providing the same commodity (orbital transportation) at a lower price.

The problem that everyone seems to subtly know but doesn't like to say aloud is that the demand curve is highly inelastic.

It is completely possible that cheaper rockets result in more usage, but less total revenue. This happens with lots of things. Think about food production, weather is bad, rice harvest is very low during a year in a nation that mostly eats rice. We have historical examples that total value of the crop goes up, despite less being available. That's highly inelastic demand for you. If supply of orbital launch goes up, then total revenue can easy decrease.

In this case, the only way for total revenue to increase a great deal is for genuine innovation to happen. Yes, space tourism, Mars plans, etc. would fit the bill. However, all of these are bets, and I don't think they're particularly good ones. The best bet would be for US government itself to realize what is happening and double-down on the military and scientific windfall they can get from it. I don't feel like this will happen on its own, and the general public isn't engaged enough. I worry that SpaceX's success could usher in its own demise, and we lose out on the opportunity of a generation.

With Falcon 9 you always throw away the second stage, even if you reuse the rest - that adds up. Also even though 60 says per launch and the many hundred in orbit are a monumental achievement already, it pales in comparison with their plans. Also the stats have finite lifespan, so with many thousand in orbit even a weekly 60 sat launch migh not be enough to replenish & add more sats over time.