Apple To Introduce MVNO Wireless Service In ’07, UBS Says

And so it goes…UBS telecom analyst John Hodulik has asserted that Apple plans an MVNO, buying airtime from Cingular. There’s no evidence for this of course, but some deductive reasoning. Interestingly he does point out the major problems with Apple launching an MVNO and says it will not be a slam-dunk. The problems with an Apple MVNO are that it would be entering not one but two very competitive markets, handsets and mobile services, it probably won’t be subsidizing its handset very much (which time and again has proven to be a bad idea), and its distribution is relatively lower (the number of stores it has is an order of magnitude lower than the carriers).
Despite these challenges, Hodulik thinks Apple will launch an MVNO because “this strategy would appear to indicate Apple’s increasing desire for customer control, and potentially, store traffic”.
As for how successful the MVNO would be, “if they sold 2 million iPhones with a two-year service contract, he says, it would equate to 4% of the post-paid gross adds in 2007, and 12% of the industry net subscriber additions”.
Which does raise one point — most MVNOs try to gain money from service charges or content sales, and subsidize a lot to encourage that. If Apple’s business model is about getting revenue from handset sales it may not care about making much revenue on the service.

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