Is SpaceX Planning to Make a Smartphone to Rival the iPhone?

Space Exploration Technologies (NASDAQ: SPCX), also known as just SpaceX, is a company that could disrupt many different industries, including space travel and telecom. But one that investors may not have considered is the smartphone market. While its Starlink service offers mobile internet for smartphones, CEO Elon Musk has also hinted that entering the smartphone market may be a possibility.

The company reportedly has a prototype for a device that's similar to an iPhone

According to a recent report from the Wall Street Journal, SpaceX has been working on a device that has a slimmer design than Apple's iPhone. While it's designed to help people interact with artificial intelligence (AI), its capabilities could certainly extend beyond that, as it's expected to use a Snapdragon chipset from Qualcomm.

The device is nowhere near launching, and there is no certainty that it will even come to market. But with Musk being critical of Apple's restrictive app store policies, it also wouldn't be surprising if he were to want to bring his own smartphone or similar device to market, one that could rival Apple's popular devices. He has suggested in the past that while he isn't thrilled with the idea of doing so, he may feel compelled.

"The idea of making a phone makes me want to die. But if we have to make a phone, we will. But we will aspire not to make a phone."

Is SpaceX the ultimate growth stock to own?

One of the most compelling reasons to invest in SpaceX despite its high valuation is that it has some tremendous growth opportunities. Not only can its reusable rockets revolutionize space travel, but its Starlink business could make it a big player in the telecom sector. And its biggest opportunities are in artificial intelligence (AI), with the company planning to put data centers into space. SpaceX arguably already has too many places to spend and invest in as it is. A smartphone may be a possibility down the road, but I wouldn't expect that to be a focus for the business at this stage.

SpaceX has already been incurring billions in losses, and investing in too many different areas at once could prove to be costly and risky. While making risky investments can work for large tech companies with massive resources and strong financials, that strategy may not be as sound for a company such as SpaceX, which still needs to find its way out of the red.

SpaceX may be an exciting stock to own, but it's also a highly risky one, and there are arguably far better growth stocks out there for investors that offer a better mix of growth and safety.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Qualcomm. The Motley Fool has a disclosure policy.