The next generation of Global Positioning System satellites developed by Lockheed Martin has tested successfully for compatibility with previous craft in orbit, a major advance that's set to save costs and improve operability.

The company said its GPS III prototype "recently proved it was backward-compatible with the existing GPS satellite constellation in orbit."

Analysts said the backward compatibility element of the product development would save costs for the U.S. Air Force and remove potential obstacles in the interconnectivity of present satellite constellations in orbit and those still being developed and due for launch in the coming years.

Keeping communications up to date between ground and orbiting craft is one of the challenges facing not only the U.S. Air Force but also other military establishments worldwide, which points to a steady growth in the global sales potential of this branch of aerospace activity, analysts said.

Lockheed Martin said Thursday it conducted tests which concluded Oct. 17.

During the tests, Lockheed Martin's GPS III Nonflight Satellite Testbed successfully communicated via cross-links with Air Force flight-like hardware simulators.

The GNST is a full-sized, functional satellite prototype currently based at Cape Canaveral Air Force Station. The cross-links communication involved GPS IIR, GPS IIR-M and GPS IIF satellites, which make up the bulk of the current GPS satellite constellation.

The tests also demonstrated the ability of a U.S. Air Force receiver to track navigation signals transmitted by the GNST.

"These tests represent the first time when the GNST's flight-like hardware has communicated with flight-like hardware from the rest of the GPS constellation and with a navigation receiver," Lockheed Martin's director for GPS III Development Paul Miller said.

"This provides early confidence in the GPS III's design to bring advanced capabilities to our nation, while also being backward-compatible," Miller added.

Lockheed Martin is working on contracts to produce the first four GPS III satellites -- SV 01-04 -- and has received advanced procurement funding for long-lead components for the fifth, sixth, seventh, and eighth satellites, the SV05 to SV08).

The first flight-ready GPS III satellite is expected to arrive at Cape Canaveral in 2014 for launch by USAF in 2015.

The new generation GPS III is "a critically important program for the Air Force," says Lockheed Martin. It will affordability replace aging GPS satellites in orbit while improving capability to meet the evolving demands of military, commercial and civilian users, the company said.

GPS III satellites will deliver three times better accuracy; provide up to eight times more powerful anti-jamming capabilities; and include enhancements to extend spacecraft life 25 percent further than the prior GPS block. It will be the first GPS satellite with a new L1C civil signal designed to make it interoperable with other international global navigation satellite systems.

Described as an innovative investment by the U.S. Air Force under the original GPS III development contract, the GNST has helped to identify and resolve development issues prior to integration and test of the first GPS III flight space vehicle, the SV 01.

In the meantime, the U.S. Air Force appears to have adopted a rigorous "Back-to-Basics" acquisition approach, Lockheed Martin said.

The GNST has gone through the development, test, and production process for the GPS III program first, significantly reducing risk for the flight vehicles, improving production predictability, increasing mission assurance, and lowering overall program costs. Details of the savings achieved were not discussed in Lockheed Martin's news release.

The GNST arrived at Cape Canaveral July 19 to test facilities and prelaunch processes in advance of the arrival of the first flight satellite. On Aug. 30, the GNST established remote connectivity and communicated with the GPS Next Generation Operational Control System. The OCX is being developed by Raytheon.

Before it was shipped to Cape Canaveral, the GNST completed a series of high-fidelity activities to pathfind the integration, test and environmental checkout that all production GPS III satellites undergo at Lockheed Martin's GPS III Processing Facility in Denver, Colo.

Lockheed Martin has headquarters in Bethesda, Md., and reported net sales of $47.2 billion in 2012. Raytheon has headquarters in Waltham, Mass., and reported sales of $24.9 billion in 2012.