Google's New Satellites Can Spy On Apple’s Supply Chains, Skybox CEO Says

Google Doodle Hubble
Google Inc. is reportedly planning to buy a piece of Richard Branson's Virgin Galactic to help put its new Skybox satellites in orbit. Google Inc.

What's Google (NASDAQ:GOOGL) really getting with its just-announced $500 million acquisition of satellite manufacturer Skybox Imaging? While  the search giant is expected to integrate the company's satellite imagery into Google Maps, Skybox CEO Dan Berkenstock sees huge potential for Google to gather valuable competitive and corporate intelligence.

Berkenstock told the Wall Street Journal Monday that Skybox could be used to spy on Google’s competitors -- for instance, images of Foxconn plants could help determine Apple Inc.’s (NASDAQ:AAPL) future plans, like when it intends to release the next iPhone. 

If Google knew that, it could plan a “competitive strategy for its Android devices,” according to John M. Simpson, director of the Privacy Project at Consumer Watchdog. 

Furthermore, Berkenstock suggested Skybox could be used to detect political crises like those that unfolded throughout the Ukraine last year, and aid in the search for the lost Malaysian Airliner, Flight MH370. Skybox says that by 2018 the data collected by its satellites will be photographing the earth’s surface clearly enough to capture live video of cars on a highway, three times a day.

This kind of intel could be very valuable to corporate clients, investors, governments -- and lucrative for Google -- but it also raises questions about the ever-expanding reach of the tech giant, which manages the world’s most-used Web search tool and the most popular smartphone operating system, Android. “Imagine what you could do with HD video from space,” Skybox asked in a promotional video.

Android phones equipped with Google’s services track where a user goes, to sell higher-priced, location-based advertisements. Some critics contend that satellite data is just another way for Google to track people without their consent.

Neil Currie, a managing partner at Cornershop Advisers, used satellite photos to determine sales figures for retailers when he worked as a stock analyst at UBS. The imagery could be used to determine inventory for car manufacturers and the amount of traffic coming through seaports, Currie said, but he used it to compare the number of cars in the parking lot of a company like Wal-Mart Stores Inc. (NYSE:WMT) year over year.

“It’s a technology that allows you to gather a lot of data points, but it’s all about properly interpreting the data,” Currie told International Business Times. “We looked to see if there was any correlation between how full a parking lot was and the retailer’s quarterly earnings. And we found, that for specific retailers like Wal-Mart, there was.”

Currie said that in the past, a firm like his might have hired someone to use a clicker to count cars at retailers that did not release their quarterly sales figures. While satellite images eliminate “a lot of legwork” and allowed UBS to gather data on a significantly broader scale, the technology is not without its weaknesses.

“One of the limitations of using that data was that you had to have companies with a very defined parking space,” Currie said. “Shopping malls were difficult, since you do not know which store consumers are going to. Also, they sometimes have multilevel parking lots that don’t show how many cars were parked there.”

While satellite imagery was helpful for retailers or restaurants that consumers visit during the day when the sun was high in the sky, it was useless for those with a lot of evening traffic or later in the day, when objects cast long shadows. The information also came at a great cost, Currie said.

“It is quite expensive when you’re using hundreds of images,” Currie said. “We tried a couple of companies due to the price. I’m sure as technology grows, the cost of doing this will get lower.”

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