Comments on: How Apple will become a mobile carrier

By: Technology products

Technology products — Thu, 12 Jul 2012 12:37:09 +0000

Starter mobile or internet service providers face difficulties to establish their business if they don’t start on a large scale but I don’t think Apple face such kind of difficulties because they can invest large amount of money if they start providing mobile service.
According to my point of view Apple doesn’t jump into this business since it has more ups and downs than other tech business but if it jumps they will gain huge hype and stand out in there tech industry.

By: Yago

Yago — Wed, 09 May 2012 14:32:01 +0000

Yago,
spot on Nisse32. Just take the whole roaming pricing chaos out there. No operator will dear to attack their roaming revenues. This is the weak point of the telco industry and this is where Apple has a lot to win and nothing to lose.

Forget switching carriers in your home country, there is little value for the customer there. But now imagine you travel to Spain and instead of paying 50€ plus for a handfull of calls and MB, you could choose the best price at local rates offered to you by Apple mobile, directly through your itunes, just as if you would buy an app.

Apple gains:
- total control of the customer, way beyond the normal lifetime of any device
- offer the best service to the user, as they could be switching from one network to another depending on better coverage.
- additional margin from wholesale deals in minutes and data, even higher by saving all the customer acquisition costs that mobile operators pump into saturated markets just by cross selling into their base.
- Additional ARPU (15-40€), who does not want this?

By: Nisse32

Nisse32 — Fri, 04 May 2012 16:28:40 +0000

The base for Apples entry is some big flaws in the current telecom industry:

- The price on a specific service is not based on production cost but totally arbitrary on what the market can bear (ie SMS, international roaming etc)
- Because of the mismatch above a lot of new services are blocked/hindered/artificially priced (ie IP-telephony, tethering etc)

The above makes more and more customers unhappy and Apple also doesn´t like that the telcos throttle the customer use of the iPhone.

Another example of lazy telcos is for example the lack of visual voicemail. This is an excellent feature for customers but, for example, in Sweden none of the four “official” iPhone operators has bothered to implement this service…

What Apple should do is to buy up bulk capacity (only ip-based) in every major market. This is possible with the use prepayment etc and Apples large cash reserve. Then sell flatrate subscriptions wich includes everything (roaming, tethering, messages, web, etc etc) and without any service blocking. Apple could also migrate to 100% IP-based service (forget oldfashioned voice calls, SMS, MMS etc). Instead new improved HD VOIP services, iMessage, Facetime etc etc.

With virtual SIM technology Apple can change the underlying serviceprovider dynamically (even several times per day) depending on the terms with the different providers. The customer wouldn´t even notice. This would permanently shake-up the whole telco-industry as we know it.

Only one company has the customer base, cash and infrastructure to do this. The question is: Does Tim want to?

By: Hemendra Kumar Saini

Hemendra Kumar Saini — Fri, 04 May 2012 09:32:01 +0000

eventually every great thing comes to end, thats what happening to google i.e. they are shifting focus from thier core product and trying to put their hands in every possible direction which mean their fall later or sooner.

By: CUEngineer

CUEngineer — Thu, 03 May 2012 20:11:51 +0000

” Apple will provide wireless service directly to its iPad and iPhone customers. ”

Do you have any facts? or are you completly talking out of your …

whats the point in writing random stories without anything to back it up?

By: Jon T

Jon T — Thu, 03 May 2012 17:54:00 +0000

Wow. This could really be a possibility. Every Apple device on an Apple branded network that actually uses whichever network is best in your current location…

Sign me up yesterday please. Bill my iTunes account monthly and I’ll take a new iPhone every 18 months as will all the family. And did I hear a family package Apple? Yes to that too…

By: Mandar Kulkarni

Mandar Kulkarni — Thu, 03 May 2012 06:22:42 +0000

Can’t imagine the bugging frequent Ads from Apple in mags, hoardings and on television.. ;)

Mandar
http://www.harbinger-systems.com

By: Whitey Bluestein

Whitey Bluestein — Thu, 03 May 2012 00:26:45 +0000

The report last September that Google was conducting a trial of three networks in Spain for a possible future launch of an MVNO was apparently a hoax. It sounded fishy to begin with. And it was.

By: keninca

keninca — Wed, 02 May 2012 23:21:32 +0000

I don’t think they will build or buy a network, either. But I also don’t see them putting their name on service they don’t have control over, especially service that lots of people complain about. This makes the question about Apple’s bargaining power moot, but in any case, they don’t want to risk losing all that margin on phones for the potential profits of what is essentially a reseller of service – they won’t make $300-$400 in profits on the service in 2 years, and it would consume a lot of bandwidth. And even if they did make a similar profit on the service, it would require a big investment, one that would create little, if any, incremental increase in overall profitability.

I think the technology that Apple has developed is not about offering Apple wireless service (although I won’t be the least bit surprised if they build a wi-fi network), but rather about offering unlocked phones, where they don’t have to cater at all to the carriers. In the long term, this would force carriers to compete on price and service, and not confusing gimmicky marketing and plans.

By: samvitraina

samvitraina — Wed, 02 May 2012 22:42:11 +0000

Whitey,

Interesting post. The MVNO route for Apple has been long rumored. You mention Google less likely to do so. Google launched their MVNO operations in Spain (wonder why they chose a 100%+ saturated market). I am not sure on how that venture is doing for them. But they could gather learning from the Spanish market and apply it elsewhere.

A key consideration on this business model will have to be profitability. You mention companies like Virgin doing this successfully for the last few years but it is important to note that their profitability has always been under pressure. Virgin has also reached a plateau of sorts in the number of subscribers, a problem I am sure will be alien to Apple.

There is also the other point of handset subsidy, which in the MVNO model will have to be fully supported by Apple. This would be an additional expense, which Apple does not bear today.

Lastly, in the US, the market is largely dominated by AT&T and VZW and in my view, Apple would gain a better start and pilot if they were to parter with an international operator like Vodafone with more than 10 properties globally and offer unique value propositions like reduced rate global voice and data roaming.

Just some thoughts..