DigitalGlobe Inc. on Wednesday secured approval from U.S.
regulators to sell satellite images of objects as small as a
shoebox to overseas and commercial clients for the first time as it
faces intensifying competition from aircraft, drones and Google
Inc.'s fast-growing stable of space hardware.
The Department of Commerce approved its application to sell
higher-resolution images to customers other than the U.S.
government, expanding opportunities in a global imaging and
analysis market the Colorado-based company estimates to be worth
around $12 billion this year.
The data is most prized by location service providers--notably
big search or mobile companies such as Google and Nokia
Corp.--looking to improve and leverage their online map functions
to sell additional products, as well as sectors including energy
and agriculture.
DigitalGlobe said the sharper images improve the quality of the
algorithms that can be used by, for example, retailers to analyze
cars in a store parking lot and allow users to identify the kind of
vehicle, if not the manufacturer.
"It won't tell you whether it's a Porsche or a BMW," said Walter
Scott, DigitalGlobe's co-founder and chief technology officer. "But
it's the rocks and trees and the white space that's really left out
[on existing maps] that can be an important gauge of economic
activity." While its existing commercial service could identify
whether a field was planted, the improved imagery would be able to
identify the crop.
DigitalGlobe rose to prominence when it crowdsourced an effort
to use its five satellites in the hunt for wreckage from Malaysia
Airlines Flight 370, and it is already licensed to sell images of
objects as small as 50 centimeters across to commercial and
overseas customers.
The Commerce Department approval will allow sales of
higher-resolution images, with the launch of a planned new
satellite in August opening the way to market pictures of objects
as small as 31 cm across from next year, though DigitalGlobe could
move it to a lower orbit to improve this to 25cm.
Rivals using aircraft and drones can already capture and sell
even more high-resolution images, with increasing demand from
customers in the energy, mining and agriculture sectors to monitor
infrastructure and production.
DigitalGlobe last year applied for restrictions on satellite
providers be lifted ahead of the planned launch in August of its
WorldView-3 satellite.
The market for so-called geospatial information that combines
imagery and other data is estimated by analysts to be worth around
$10 billion a year. Google, which this week agreed to buy satellite
startup Skybox Imaging for $500 million in cash, is the latest in a
number of moves by the world's largest Internet search provider to
collect and provide data from the sky. Skybox has a single
satellite, but plans to launch as many as 24. Google is spending
more than $1 billion to put hundreds of satellites in orbit to
extend Internet access, people familiar with the matter said
recently.
Howard Rubel at Jefferies Group said the clearance to sell
sharper images would help DigitalGlobe capture market share from
operators of planes and drones as it could use existing
infrastructure, with potential margins as high as 80%.
Mr. Rubel said in a note to clients that it would also distance
DigitalGlobe from Skybox, which has a smaller image library and
needs to expand its satellite portfolio.
DigitalGlobe already sells mapping imagery to Google, Nokia and
Microsoft Corp., though government customers accounted for 87% of
its revenue last year. Its shares closed up 3.3% at $31.58, valuing
the company at $2.31 billion.
Write to Doug Cameron at doug.cameron@wsj.com
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