Filing: Apple conceptualized smart MVNO system ahead of iPhone

[AppleInsider]

In the years and months leading up to the release of its iPhone handset, Apple Inc. considered forming its own mobile virtual network operator (MVNO) system which would interface with multiple primary wireless carriers to always provide users with the lowest possible rates depending on their location, a company filing has revealed.

The October 10, 2006 patent filing published for the first time this week suggests that although the Cupertino-based firm ultimately formed exclusive relationships with individual carriers for specific regions, it had prepared an alternative model that would have seen the iPhone sold contract free on its own roaming network.

Unlike traditional MVNOs that serve up wireless minutes purchased in bulk from one established carrier (such as AT&T) at a fixed cost to the user, Apple's backup plan called for a system that would allow all primary wireless carriers within a specific region to serve iPhone users by bidding prices for their service in a dynamic, real-time model.

Under the proposed model, each iPhone with a stored network address would be in constant communication with an iTunes-like mobile virtual network operator server, feeding the server real-time information about its geographic location. In return, the server would query its database of participating wireless networks within that region, and then select a carrier for the iPhone based upon predetermined rates from those carriers for that region.

Alternatively, Apple's MVNO could also insert the user in the network selection process by allowing them to select their own carrier based upon the best available rates for the particular region at a particular time of the day or week.

"Bids can be received from multiple network operators for rates at which communication services using each network operator can be obtained. Preferences among the network operators can be determined using the received bids, and the preferences are used to select the network operator," Apple's iPod chief Anthony Fadell wrote in the filing.

"Preferences may be further based on a location of the mobile device, the quality of service offered by the network operator, and/or type of communication. Bids from multiple network operators for rate information relating to rates at which communication services using each network operator can be obtained and the rate information can be sent to the mobile device for use in selecting the network operator."



Fadell added that rate information would be displayed on a user interface of the iPhone so that user selection of the network operator can be performed by the user. The iPhone would be registered with a network operator for a limited purpose of sending the request and receiving the network operator data in response to the request, and would separately be registered with the selected network operator for conducting communications after receiving the network operator data.

"The network operator preference data can be updated to identify a second set of preferences among the multiple network operators, and the updated network operator preference data can be sent to the mobile device," Fadell wrote.

"In addition, updating the network operator preference data can be performed dynamically based on parameters associated with the multiple network operators. The parameters include bids relating to rates at which communication services are available from each network operator, data relating to the network operators in an area corresponding to the current location of the mobile device, and/or rate information for different communication services available from each network operator."



As such, the updated network operator preference data would enable an iPhone to automatically select among multiple network operators as the user alters his or her location, always providing that users with the strongest possible signal and lowest possible rates.

Under such a model, Apple would presumably handle the accounting end, tabulating the users monthly bill and handling payments between the various participating carriers on its network.

[ View this article at AppleInsider.com ]

[JeffDM]

I had assumed that an MVNO was a consideration, it looks like maybe it really was. From a cost standpoint, I'm not sure if dynamic, real time prices would necessarily make sense though. If you're selling service contracts, you want to have your expenses locked down so you don't have surprises.

[petermac]

An interesting concept. How would this translate to various market around the world, and for that matter international roaming. What I am really asking, is this doable outside of the USA.

[hdasmith]

I really like that idea.

[anantksundaram]

Somehow seems so simple and obvious by hindsight. Makes you wonder, how come no one else thought of it before?

Of course, it raises the larger question of why Apple itself would not want to implement similar 'dynamic pricing' for say, iTunes downloads?

[Crtaylor]

If Apple was considering this, why did they end up tying the service to AT&T? I think it would have been much better to implement this technology than have to pay through a certain carrier even if it meant higher costs for the Phone itself. I sure hope they implement this in the new iPhone because there are better services out there than AT&T.

[Slewis]

Null.

[solipsism]

Originally Posted by JeffDM

I had assumed that an MVNO was a consideration.

Me too. To me it seemed like the best option for Apple who likes to have a tight control on their entire product. But AT&T seems to have bent over enough to make it less attractive. I wonder if the MVNO was the original plan, the backup plan or just something they were looking into to get a full grasp of the situation.

[jsheffie]

Originally Posted by Crtaylor

If Apple was considering this, why did they end up tying the service to AT&T? I think it would have been much better to implement this technology than have to pay through a certain carrier even if it meant higher costs for the Phone itself. I sure hope they implement this in the new iPhone because there are better services out there than AT&T.

Not in my area there isn't.

There isn't a single other carrier in existence (that I have tried -verizon, sprint/nextel, altell) that will hold a signal in houses and many buildings within about a 15 mile radius.

ATT is the only one here.

Still, many people choose nextel around here, just to see them all go outside to get a clear DC signal.

I don't mind ATT. I think they are a little too large a company, but then again I think verizon is also.

[macinthe408]

This system reminds me of those idiots who waste $5.00 in gas to drive across town to get it at $.03 cheaper per gallon, thereby saving $0.00.

Would the rate differences between carriers--at different times of the day even!--be enough to give incentive to the user to navigate a byzantine bidding system, ala ENRON, all to save $0.01 on a phone call to Aunt Mary?

Some things just look so good in theory. In practice, however...

[Rot'nApple]

Originally Posted by anantksundaram

Somehow seems so simple and obvious by hindsight. Makes you wonder, how come no one else thought of it before?

Of course, it raises the larger question of why Apple itself would not want to implement similar 'dynamic pricing' for say, iTunes downloads?

"As such, the updated network operator preference data would enable an iPhone to automatically select among multiple network operators as the user alters his or her location, always providing that users with the strongest possible signal and lowest possible rates.

Under such a model, Apple would presumably handle the accounting end, tabulating the users monthly bill and handling payments between the various participating carriers on its network."

Would it still be a GSM phone which rules out everyone except T-Mobile and AT&T here in the states? What's the point of choosing the best signal provider at the cheapest rate with only two main national competitors at the least and possibly a few regional choices if any?

Are these bidding rates always the same? What if a company expands capabiity to become the one with the strongest possible signal over the carrier you are used to seeing on your bill for a specific region but that new carrier charges a higher rate, does the phone look for the signal or the rate and can the user override the iPhone's choice if they prefer rate over signal or signal over rate and how can one verify their billing over multiple rates like when driving cross country on vacation, can certain providers be cheaper or provide the best signal when going on your trip for vacation and yet a week or two later, different providers hold those priveleges?

How, as a consumer, can you verify, especially if you are frequently on the road and use your mobile phone a lot. It seems this type of endeavour, billingwise, could get pretty messy and confusing awful quick and how, if one feels overcharged, "prove it" and with flucuating rates to boot?! Sure there could be a iPhone service log to match with Apple's billing statement, but cross checking rates that are known to be variable due to competition or bidding... I dunno.

Give me either a monthly charge for minutes I can see being used and can countdown what I have left or prepaid type plans where I can alway purhcase my time when I need it, so some months when I'm not using the phone I'm not paying for a bunch of minutes I don't need and other times when I need a lot of minutes I can purchase as many as I need.

Personally, I'm glad Apple chose the selective carrier option they now have and where change is not a constant because I would be highly skeptical where my rates can change not only when visiting another state, but driving in-state on the highway from one city to the next and having possibly at least two or more provide my service and bill Apple for it, who then bills me stating what?... this call lasted 15 minutes, three mobile operators provided you with the strongest signal at their best price and of that 15 minute call Area 1: 3 min. @ .25¢, Area 2: 8 min. @ .39¢, and Area 3: 4 min. @ .27¢ courtesy of t-mobile, some off brand provider and at&t. Yep, sure wouldn't want to have to see that on my bill!

[addicted44]

Originally Posted by macinthe408

This system reminds me of those idiots who waste $5.00 in gas to drive across town to get it at $.03 cheaper per gallon, thereby saving $0.00.

Would the rate differences between carriers--at different times of the day even!--be enough to give incentive to the user to navigate a byzantine bidding system, ala ENRON, all to save $0.01 on a phone call to Aunt Mary?

Some things just look so good in theory. In practice, however...

Because the user would not do the selecting (unless they wanted to). The network would be chosen automatically by the software.

Its a good idea, but probably too complicated to implement.

[kenaustus]

Originally Posted by petermac

An interesting concept. How would this translate to various market around the world, and for that matter international roaming. What I am really asking, is this doable outside of the USA.

It might be lined up for future trials in Australia, where rumors have it that only unlocked iPhones will be sold.

A MVNO concept for Apple will only work when there are a large number of iPhones in use - like in another year or so. As the Aussies are traditionally fast adapters of technology their market will be perfect to trial this idea on after sales have grown.

My concern with the iPhone for travelers is that it appears that Apple has not worked out a system where I could go to, say, the UK and buy a chip from the iPhone carrier to cover me while I was there. I'd pay for UK calls for local and switch the chip back to my US chip when flying home.

[mh71]

Originally Posted by macinthe408

This system reminds me of those idiots who waste $5.00 in gas to drive across town to get it at $.03 cheaper per gallon, thereby saving $0.00.

Would the rate differences between carriers--at different times of the day even!--be enough to give incentive to the user to navigate a byzantine bidding system, ala ENRON, all to save $0.01 on a phone call to Aunt Mary?

Some things just look so good in theory. In practice, however...

I agree. I think it would be a great system for Apple to implement on the backend. They could charge you(or me) a flat fee like AT&T does, and then bid out the minutes from their end.

The system would be "seemless" (in theory) to you. Apple would make their iPhone tax. And whoever wants the minutes most would get the revenue.

[mh71]

Originally Posted by kenaustus

My concern with the iPhone for travelers is that it appears that Apple has not worked out a system where I could go to, say, the UK and buy a chip from the iPhone carrier to cover me while I was there. I'd pay for UK calls for local and switch the chip back to my US chip when flying home.

A system like this could actually work out for a multinational MVNO. Without doing anything at all, when you get off the plane at Heathrow, the network detects an iPhone with the MVNO plan and starts the bidding process.

If it were automated as I described in my last post, it could be rigged up so you wouldn't notice at all.

[Olternaut]

Complicated or not, if anybody could make this idea work it would be Apple. This really should have been their primary plan in the first place but now they are locked with AT&T for 5 years (4 now?).
Hopefully down the road they might actually implement this.

[randomthot]

although it would be a lot of work...perhaps at least, this was a planned foil, to keep all the cell co's honest during negotiation.

I could also see how such a plan as this would help to seamlessly blend into a WiMax option.

Either way, perhaps it was too new/bleeding edge, and jeopardize the iPhone launch & success for now.

I agree that it is probably too complicated...polling and draining batteries. But if anyone could pull it off...it would be Apple, eh?

[sapporobaby]

Originally Posted by petermac

An interesting concept. How would this translate to various market around the world, and for that matter international roaming. What I am really asking, is this doable outside of the USA.

Mobile phone networks do this already. They check your status via the HLR and VLR.

Mobile operators have been pulling this off since their inception. Apple would not be doing anything ground breaking here.

[Slewis]

Null.

[sapporobaby]

Originally Posted by Slewis

They are not miracle workers and batteries can only hold so long a charge. Granted this can be offset with better energy efficiency but auto-polling servers is the very definition of energy inefficient.

Sebastian

Exactly. Phones poll all the time anyway. They are designed to to this. Apple would not be re-inventing the wheel. This is old news as MVNO's have been around quite a while.

[Outsider]

Is there any real evidence for Apple's "5 year lock-in" with AT&T? I've heard about it and never really seen anything definitive though.

[solipsism]

Originally Posted by Outsider

Is there any real evidence for Apple's "5 year lock-in" with AT&T? I've heard about it and never really seen anything definitive though.

No. Verizon's CEO came out after AT&T was deemed the officical carrier of the iPhone and said—with sour grapes—that Apple approached them first with a 5 year deal that they turned down.

edit: I can't find a report that links Verizon CEO turnign down the deal AND stating the 5 year agreement. Where did the 5 year assumption come from?

[sapporobaby]

Originally Posted by solipsism

No. Verizon's CEO came out after AT&T was deemed the officical carrier of the iPhone and said—with sour grapes—that Apple approached them first with a 5 year deal that they turned down.

edit: I can't find a report that links Verizon CEO turnign down the deal AND stating the 5 year agreement. Where did the 5 year assumption come from?

Apple approached an operator in Finland that turned them down. Sonera said an EDGE phone was old technology and Finnish law prevented them from bundling non-3G phones with subscription based contracts. Would this be considered sour grapes? I think Verizon had a chance but did not see it fitting their biz model. Who knows for sure?

[Outsider]

Yeah. Verizon has ZERO regrets I bet.

[Outsider]

Originally Posted by solipsism

No. Verizon's CEO came out after AT&T was deemed the officical carrier of the iPhone and said—with sour grapes—that Apple approached them first with a 5 year deal that they turned down.

edit: I can't find a report that links Verizon CEO turnign down the deal AND stating the 5 year agreement. Where did the 5 year assumption come from?

Beats me man. I keep seeing that number being thrown around like it was bloody obvious to everyone except me.

[solipsism]

Originally Posted by sapporobaby

Would this be considered sour grapes? I think Verizon had a chance but did not see it fitting their biz model.

Mea Cupla. Unless Google is gaslighting me, I read the quotes completely wrong. The quotes below reveal excellent—though in retrospect, short sided—responses from Verizon's CEO:

"We need to let the iPhone hit the market. We need to see what the reaction is, but we don't believe it changes the game plan that we put in place for how we segment the market and what we think will attract the wireless user," Seidenberg said during a news conference at NXTcomm, the telecommunications industry's annual show.
(source)

“We just added four new devices in the past month,” he said. “The new BlackBerry is flying off shelves. The way we see it, our customers have price points and service packaging that is different.”
“The way we come at this is to let the iPhone hit the market,” he said. “I don’t think it changes the game plan for how we approach the market. But we need to see the impact. The burden is on (AT&T and Apple) to prove the market will change.”
“The iPhone will add excitement and stimulation to the market,” he said. “If we have done our job, then we will be a beneficiary. I hope it does reasonably well.”
(souce)

[sapporobaby]

Originally Posted by solipsism

Mea Cupla. Unless Google is gaslighting me, I read the quotes completely wrong. The quotes below reveal excellent—though in retrospect, short sided—responses from Verizon's CEO:

"We need to let the iPhone hit the market. We need to see what the reaction is, but we don't believe it changes the game plan that we put in place for how we segment the market and what we think will attract the wireless user," Seidenberg said during a news conference at NXTcomm, the telecommunications industry's annual show.
(source)

“We just added four new devices in the past month,” he said. “The new BlackBerry is flying off shelves. The way we see it, our customers have price points and service packaging that is different.”
“The way we come at this is to let the iPhone hit the market,” he said. “I don’t think it changes the game plan for how we approach the market. But we need to see the impact. The burden is on (AT&T and Apple) to prove the market will change.”
“The iPhone will add excitement and stimulation to the market,” he said. “If we have done our job, then we will be a beneficiary. I hope it does reasonably well.”
(souce)

Gaslight. Do you know that movie?

[solipsism]

Originally Posted by sapporobaby

Gaslight. Do you know that movie?

I assume you mean the version with Ingrid Bergman. There is an earlier one, I think, and a play that they came from. The movie never crossed my mind when writing my previous post, but the term was coined from the movie/play.

[JeffDM]

Originally Posted by sapporobaby

Exactly. Phones poll all the time anyway. They are designed to to this. Apple would not be re-inventing the wheel. This is old news as MVNO's have been around quite a while.

They've been around, I think the news here is that Apple patented a system that allows it to work with an ever-changing patchwork of providers, possibly turning on a dime if they want to. How useful it really is, is an open question.

[sapporobaby]

Originally Posted by solipsism

I assume you mean the version with Ingrid Bergman. There is an earlier one, I think, and a play that they came from. The movie never crossed my mind when writing my previous post, but the term was coined from the movie/play.

I was thinking of the movie. Kind of like the old ones. Thin Man, etc....

Anyway, I am sure Verizon is probably saying ouch, but what could they say considering the success of the iPhone. I wonder if they would respond the same way, if they had the chance again.

[sapporobaby]

Originally Posted by JeffDM

They've been around, I think the news here is that Apple patented a system that allows it to work with an ever-changing patchwork of providers, possibly turning on a dime if they want to. How useful it really is, is an open question.

When roaming, I can do this with my phone. For this system to work, there would have to be an agreement that the operators will allow their subscribers to roam while in the hone country and this will NEVER happen. In short, Apples system is nothing new considering all mobiles perform this function now. When roaming, they switch from network to network, or the user can pick a network and lock in.

[solipsism]

Originally Posted by sapporobaby

Anyway, I am sure Verizon is probably saying ouch, but what could they say considering the success of the iPhone. I wonder if they would respond the same way, if they had the chance again.

Who knows. They are as notorious as Apple for wanting control. Their response so far has been to create a phone to compete directly with the iPhone, which we know can't happen overnight or without a decent UI, and perhaps even the carrier's lowering prices of unlimited data may have been the result of the iPhone's emergence, but I have no proof that they are connected.

[Slewis]

Null.

[sapporobaby]

Originally Posted by Slewis

They're polling for a connection, not to a central server as described, and in this system they would have to be polling for both the connection and to the central server.

Sebastian

They poll the HLR (home location register) and VLR (visiting location register) to see if the phone is allowed to book into a given network. It polls to find its geographic location, can it make calls, can it receive calls. It does not poll just for a connection. The polling is also determined by the network.

[JeffDM]

Originally Posted by sapporobaby

When roaming, I can do this with my phone. For this system to work, there would have to be an agreement that the operators will allow their subscribers to roam while in the hone country and this will NEVER happen. In short, Apples system is nothing new considering all mobiles perform this function now. When roaming, they switch from network to network, or the user can pick a network and lock in.

At the basic level, it's similar, but this system looks like it adds a fair amount of complexity in the back end to simplify the user end. Networks would be chosen based on more factors than whether or not you are on your "home" network. The concept of even knowing you are roaming might not apply, and there would be no manual intervention needed, and possibly even no indication.

[sapporobaby]

Originally Posted by JeffDM

At the basic level, it's similar, but this system looks like it adds a fair amount of complexity so that networks are chosen based on more factors than whether or not you are on your "home" network. The concept of even knowing you are roaming might not apply, and there would be no manual intervention needed, and possibly even no indication.

But for this to work, you would have to have a completely neuter or generic SIM card. Homed to no local network for it to operate seamlessly. If Apple were to do this, they would have to be more than an MVNO. They would have to become a network provider and not just a purchaser of minutes. All MVNO's purchase minutes from someone. When a subscriber purchases an account from said MVNO, the subscriber may see another operator brand in standby but the SIM will still be locked onto the network that sold the MVNO the minutes. For an operator to allow roaming in the home network, they would be committing financial suicide. As I said, it will never happen. (I say never but you should never say never. I know)

[JeffDM]

Originally Posted by sapporobaby

But for this to work, you would have to have a completely neuter or generic SIM card. Homed to no local network for it to operate seamlessly. If Apple were to do this, they would have to be more than an MVNO. They would have to become a network provider and not just a purchaser of minutes. All MVNO's purchase minutes from someone. When a subscriber purchases an account from said MVNO, the subscriber may see another operator brand in standby but the SIM will still be locked onto the network that sold the MVNO the minutes. For an operator to allow roaming in the home network, they would be committing financial suicide. As I said, it will never happen. (I say never but you should never say never. I know)

So basically you're saying that this isn't being done, but before, you said that it's been done for quite some time, nothing new, move along..

[sapporobaby]

Originally Posted by JeffDM

So basically you're saying that this isn't being done, but before, you said that it's been done for quite some time, nothing new, move along..

Sorry if I did not clarify.

All phones poll and choose a network when roaming. Roaming is the key. In a home network, phones are locked to the operator that issues the SIM card. The same would be true of Apple's proposal unless they had a card that was not locked to ANY network while at home. This card does not exist as far as I know. All operators want subscribers to be locked into the network for which the card was issued.

Apple's proposal of simply picking a network already exists in a roaming scenario. Do you travel out of the US much or are you located outside the US? I am currently in Finland but will go to Kuwait, France, Belgium, and some additional countries. My card will lock onto DNA while here in Finland but will pick ANY network once I leave Finland. I also have the option to pick a DNA partner in the country where I end up. So once again, Apple's solution has been in place for quite a while and is therefore not new.

**I need to crash but if you have additional questions, or statements I will answer them later **

[ksec]

Well Someone has mention it already. May be it would work like Pay As You Go ( I dont know what is the term in US ). You pay for it per min at a flat rate.

And then Apple buy the Network resources in bulk. Apple would properly handle the backend like Billing, and most importantly Visual Voice Mail. They could in theory control and maintain the voice quality as well. It could tie it to something like a .Mac Services where SMS, Visual Voice Mail ( or Voice Email ) and your Email, iChat Conversation History are all stored on the server.

You will be able to access it anywhere on your Mac, Iphone, or ipod touch if you have wireless signal.
For a Monthly Rate, you get all these services and may be some basic min and data usage. Then you pay flat rate for extra min and data.

That would simply beat RIM.....

I bet huge amount of people would be willing to pay premium for this kind of services.

It sounds too perfect to me...... If it worked world wide it would also mean apple have enough reason to open an Apple Store everywhere in the world.

[sapporobaby]

Originally Posted by ksec

Well Someone has mention it already. May be it would work like Pay As You Go ( I dont know what is the term in US ). You pay for it per min at a flat rate.

And then Apple buy the Network resources in bulk. Apple would properly handle the backend like Billing, and most importantly Visual Voice Mail. They could in theory control and maintain the voice quality as well. It could tie it to something like a .Mac Services where SMS, Visual Voice Mail ( or Voice Email ) and your Email, iChat Conversation History are all stored on the server.

You will be able to access it anywhere on your Mac, Iphone, or ipod touch if you have wireless signal.
For a Monthly Rate, you get all these services and may be some basic min and data usage. Then you pay flat rate for extra min and data.

That would simply beat RIM.....

I bet huge amount of people would be willing to pay premium for this kind of services.

It sounds too perfect to me...... If it worked world wide it would also mean apple have enough reason to open an Apple Store everywhere in the world.

For this to work according to your scenario. Apple would have to become a real GSM operator. What others seem to not understand is that the SIM card put into the phone is home locked to the issuing operator. There is not such thing as roaming in a home network. I do not know how to make this easier to understand. There is no way for a phone to hop between networks within the home network. If you roam, you are not bound by these restrictions. To date, no operator allows this as it is not in their best interest.

As for the "working world wide". It already does. Phones hop networks world wide when they roam. Apple has many global stores already. I pay flatrate for my service already. 10 Euros for unlimited data services (HSDPA speeds). So once again, this is an already implemented idea.