(Reuters) -Apple Inc on Wednesday selected Globalstar Inc as its partner for a feature that would allow iPhone 14 users to send emergency messages from remote locations.
The tech giant said it was dedicating $450 million from its advanced manufacturing fund toward satellite infrastructure to support the feature. GlobalStar will receive the majority of the funding, but the iPhone maker did not specify which other players will receive the rest and in what form.
While Apple will pay for 95% of the approved capital expenditure for the new Globalstar satellites needed to support the service, Globalstar said it would still need to raise additional debt to construct and deploy the satellites.
Globalstar, which makes low-earth orbit (LEO) satellites, said it had tapped investment bank Goldman Sachs & Co and expects to complete a financing in the fourth quarter of 2022.
LEO satellites operate 36 times closer to the earth than traditional ones and hence take less time to send and receive information, leading to faster broadband service even in remote areas.
Globalstar's shares were trading slightly higher after the bell. They had jumped more than 20% in regular trading but reversed course to finish lower on Wednesday.
The latest iPhones start at $799 and will be available later this month, Apple said at its "Far Out" event.
The satellite message feature will be available through a software upgrade on iPhone 14 models, which include extra hardware to send the messages, in November.
The service will be free for two years with the iPhone 14. Apple did not say what would happen after that period.
The service will start in the United States and Canada and will roll out to other markets in the coming months, the company said.
(Reporting by Eva Mathews in Bengaluru and Stephen Nellis in San Francisco; Editing by Shounak Dasgupta)