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At the moment, Lockheed does not have a competitive rocket. Moreover, its only big space project is Orion, which might never fly more than twice, if that. Thus, this shift to satellites makes some sense, as it will be difficult now for the company to gain market share in the launch and manned spacecraft markets. It is too far behind. However, there is a new industry developing in smallsats, and Lockheed is well positioned to get in at the start.
Update: I do this all the time, but I made a mistake here and assigned the Delta family of rockets to Lockheed Martin. For some reason I make this mistake often, switching Atlas 5 and Delta and Lockheed Martin and Boeing. I apologize for the error.