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Deere aligns with SpaceX
to boost rural connectivity
 
By Tim Alexander 
Illinois Correspondent

MOLINE, Ill. – John Deere is aligning with billionaire Elon Musk’s SpaceX satellite fleet to boost rural connectivity to their GPS-guided precision agriculture equipment. The agreement, announced in January, will allow more rural farmers who face connectivity issues to better utilize Deere’s precision ag technology.
“The value of connectivity to farmers is broader than any single task or action. Connectivity unlocks vast opportunities that were previously limited or unavailable,” said Aaron Wetzel, vice president of production and precision ag production systems at John Deere, in a news release. “For example, throughout the year, farmers must complete tasks within extremely short windows of time. This requires executing incredibly precise production steps while coordinating between machines and managing machine performance. Each of these areas are enhanced through connectivity, making the entire operation more efficient, effective, and profitable.”
Deere’s patented SATCOM solution will tap into SpaceX’s Starlink satellite internet constellation via a Starlink terminal on compatible machines, along with a 4G LTE JDLink modem to connect the machine to the John Deere Operations Center. The SATCOM solution will initially be available through a limited release in the United States and Brazil starting in the second half of 2024, according to Deere senior vice president and chief technology officer Jahmy Hindman.
“The SATCOM solution unlocks the John Deere stack so every farmer can utilize their current precision agriculture technology in addition to the new innovative solutions they will deploy in the future. We initiated this process with a fierce focus on delivering value to our customers,” Hindman said.
In January 2023 Deere announced it was “finalizing its search for a satellite partner.” Driven by its goal to digitize its revenue streams, the company, founded in 1837 in Grand Detour, Ill., set a goal of deriving 10 percent of its total revenue from software subscription fees by 2030. Deere currently offers free connectivity services via its JDLink platform.
Better connectivity will enable farmers to embrace technologies such as field sharing, remote display access, autonomy, faster machine learning and wireless data transfer, according to John Spendlove, senior communications product manager for Deere. Spendlove declined to disclose the amount Deere was willing to invest in acquiring a satellite partner last year, only stating that the company was “willing to make a substantial investment.”
MSN’s The Motley Fool recently reported that “going from a concept in 2015 to beta service in 2021, SpaceX’s goal to build a network of fast internet communications satellites has grown from 0 to 10,000 to 2.2 million active users (according to a December 2023 SpaceX filing with the FCC).”
According to The Motley Fool, “you can see why this new service would be attractive to farmers. It’s going to lower costs, improve efficiency, and mean more profit per acre farmed. This partnership is also going to be attractive to SpaceX, which has to space out its satellites equally all around (the) globe to ensure universal satellite internet coverage, regardless of where population centers are.”
The Motley Fool estimated that if Deere realized its goal of achieving 10 percent of total sales through software subscription fees, this could amount to around $6 billion in annual revenue (based on Deere’s past-year revenue reporting) for the company.
“The profit opportunity could be substantial as well. Services revenue is generally higher margin than manufacturing, and Deere already earns about $10.2 billion a year in profit as a manufacturer. Deere could therefore be looking at an extra $1 billion or more in profit on the services it will be able to provide thanks to its partnership with Starlink,” The Motley Fool speculated. “How much of this revenue and profit Deere ends up sharing with SpaceX remains to be seen. One thing seems certain, though: The more revenue and profit Starlink can generate for the company, the more likely we are to see a Starlink IPO in the near future.”
2/13/2024