The apparent goal of the project is to find ways to stream data directly to Apple devices. If successful, the team could allow Apple to lower its dependence on carriers. Additionally, the company may use the tech to link its devices together without a traditional network, as well as offer more robust location services. The team reportedly hopes to have something ready to deploy within five years.
As with most of Apple's moonshot projects, all the usual caveats apply: just because the company is working on something, doesn't mean it will ever see the light of day (see: Project Titan). The initiative "could be abandoned," according to Gurman. Moreover, "a clear direction and use for satellites hasn't been finalized."
As Bloomberg notes, building out a satellite network is a costly endeavor, and a number of companies have tried and failed to do so. Apple may ultimately decide, whatever the benefits of the technology, it can't deploy it at a cost that makes it worthwhile. That said, the project definitely fits a pattern of Apple trying to lower its dependence on other companies when it comes to the success of the iPhone. After settling its lengthy legal spat with Qualcomm in April, Apple then spent $1 billion to acquire the majority of Intel's smartphone modem business so that it could engineer a future where it doesn't need the chipmaker.