[Nokinside]

It would be interesting to see how the market share affects the profits and how these two companies plan to compete in long term.

If Blue Origin and SpaceX compete in the same segment and divide the market, development and manufacturing costs per launch will increase for both. Assuming each will price the launch price so low that they get roughly 50 percent of the market they would get without the other, both lose half of the volume to the competition.

SpaceX aims for moderate 3% ($55 million) operating profit margin. Bezos has deeper pockets, so if he perceives financial weakness in Musk/SpaceX, he can decide to absorb the losses for a decade and steal launches and drain profits from SpaceX driving it to the ground.

https://www.fool.com/investing/2017/02/05/how-profitable-is-...

[Retric]

Several buyers are uninstered in a launch monopoly developing which is likely to prevent such a strategy from working. A more likely scenario is for a major player to gain a process advantage and leverage that into higher profits for decades like Intel vs AMD etc.

[brianwawok]

Intel leveraged monopolostic deals to hold the lead, not process advantage

[unixhero]

Good point, but to be fair. Intel cpus are better.

[brianwawok]

But what would have happened if AMD had juicy Dell and other OEM partnerships in the desktop era? Desktops in 2000 are smartphones in 2015. Billions of dollars.

[unixhero]

Sure. But in the 2000 era, the AMD cpu's were crap in comparison to Intel. I know I know, it's unfair, and now they are much better. But I will forever hold a grudge. Ryzen looks great btw. I remember this classic: https://www.youtube.com/watch?v=yRn8ri9tKf8

[foota]

They're certainly up in some areas, but the latest gen brings real competition.

[steve_musk]

This wasn’t true when Intel was conspiring with PC manufacturers though.

[valuearb]

Intel had a massive process advantage.

[valuearb]

A 3% profit margin isn’t modest, it’s catastrophic. With a their heavy capital requirements and massive technology lead they should be banking 30%. 3% says please shut us down first time we have a bad year.

[nbanks]

However spacex could easily survive off 3% profit for now, as long as they still keep collecting all their used rockets. I only remember them launching one used rocket so far which was successful, and presumably they'll work out any remaining glitches and start using the others.

[greglindahl]

SpaceX has launched 3 boosters a second time. However, they don't expect to start launching them many times until another revision in the hardware.

[nashashmi]

What lead? They are a cockroach compared to boeing/lockheed/northrop. 3% is not just modest, it is a healthy sign they are in the game.

[valuearb]

There isn't a space launch company on the planet who can launch anywhere near the cost of SpaceX and make a profit. That's without counting re-usablity, mind you. With re-usablity SpaceX should be able to slash prices by at least 50%, though they shouldn't until the market forces them to. Instead they should be re-investing those profits into Raptor and the BFR.