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Apple granted patent where carriers bid for iPhone service

post #1 of 83
Thread Starter 
A patent recently granted to Apple could wrest power away from the wireless carriers by creating a mobile virtual network operator (MVNO) system that would allow networks to bid against each other over wireless services provided to iPhone users.

In just three and a half years, Apple's iPhone has brought about substantial changes in the mobile phone industry and inspired a multitude of copycat devices. Now, just days before the iPhone goes multi-carrier in the US for the first time, AppleInsider has discovered a patent awarded to Apple that could further shake up the way carriers do business.

The patent, entitled "Dynamic carrier selection," describes a method for providing wireless communication services. According to the invention, a mobile device would store a network address and communicate with network operator servers. After receiving data from available network operators, the device or user would select a carrier. AppleInsider first reported on the patent in April 2008.

"In some situations, bids are received from multiple network operators for rates at which communication services using each network operator can be obtained. Preferences among the network operators are identified using the received bids, and the preferences are used to select the network operator for the mobile device to use in conducting communications," the filing noted.

The invention would allow Apple to run a MVNO system that could collect rate information from participating wireless networks within a region and automatically select or allow users to select the best option.

Traditional MVNOs purchase wireless minutes in bulk from existing carriers and resell them to customers. Apple's system could set off a bidding war between providers, potentially driving prices down.

The patent specifically lists Verizon and Sprint as examples of carriers from which MVNOs purchase minutes.



Using Apple's proposed system, a user could specify carrier preferences for different rates, locations and times that would then be dynamically selected by the iPhone.

An additional step that would likely enrage carriers would be for Apple to handle the accounting for the MVNO service and bill iPhone users through their iTunes account. Much like the controversial in-app subscriptions on the iPad, such a system would leave valuable user information in the hands of Apple, rather than the wireless carriers.

The application was filed in October 2006, nearly a year before the introduction of the iPhone. Former Apple executive Tony Fadell, known as the 'grandfather of the iPod,' is credited with the invention.



The patent serves as additional evidence that Apple has looked into ways to reduce its reliance on carrier relationships and provide iPhone users with more choices for wireless service.

Last October, reports emerged that Apple was working on a upgradeable flash-based SIM that could allow users to change wireless networks without having to obtain a carrier-specific SIM. Within weeks, several European carriers threatened Apple that such a feature would jeopardize their willingness to subsidize future versions of the iPhone.

Initial teardown reports of the Verizon iPhone 4 indicate that the smartphone uses a world mode MDM6600 Qualcomm baseband that could pave the way for a dual CDMA and GSM iPhone in the future.
post #2 of 83
What?\
post #3 of 83
Well this would be interesting! Companies in a bidding-war to provide you - the consumer- with services? I would love to be a fly on the wall when the telecom execs think about the ramifications of this one.

Wireless companies have been trying to branch away from being a provider of just the "pipe". I personally think they should stick to doing what they know best - providing wireless services - and stay away from the providing software services. They just do a horrible mess of it.
post #4 of 83
Quote:
Originally Posted by Whozown View Post

What?\

agreed..
post #5 of 83
Yes, I hope it happens very soon. You get your phone from Apple or any store, plug it to your computer and see the service prices side by side for comparison. And boom, you make your choice of whom becomes your carrier.

That will really be a hit with consumers. For the carriers? Who cares! They have ripped us off long enough.
post #6 of 83
Next we'll see this for Android and hear some Droidette claim Google was planning to do this all along.
post #7 of 83
Actually, why not to do this bidding every time in the beginning of the telephone call/data session? Why do I need even know who provides the service for me as long as it is cheap and reliable?




Quote:
Originally Posted by OC4Theo View Post

Yes, I hope it happens very soon. You get your phone from Apple or any store, plug it to your computer and see the service prices side by side for comparison. And boom, you make your choice of whom becomes your carrier.

That will really be a hit with consumers. For the carriers? Who cares! They have ripped us off long enough.
post #8 of 83
Quote:
Originally Posted by Whozown View Post

What?\

My reaction as well.
post #9 of 83
Quote:
Originally Posted by DieWalkure View Post

Actually, why not to do this bidding every time in the beginning of the telephone call/data session? Why do I need even know who provides the service for me as long as it is cheap and reliable?

That's the point of this patented invention. It's for dynamic carrier switching depending on which carrier provides the cheapest bid.
post #10 of 83
Okay - so I didn't actually invent it. But I did think it up.
And I have been saying for a while that this is how cellphones *should* work.

The benefit would be obvious. Carriers would compete on price and their ability to provide service.
And users would see more coverage and better prices.

Currently carriers compete on their ability to sign-up customers. And that results in a very different set of priorities.

C.
post #11 of 83
Uhm, yeah, while they have been awarded this patent, I thought it was pretty obvious that this is an abandoned concept, and only exists if the deals with Cingular didn't pan out. The talk is that they considered this option, but obviously, they have struck a deal with multiple wireless companies now. I highly doubt this will ever happen.
post #12 of 83
Quote:
Originally Posted by Cpsro View Post

Next we'll see this for Android and hear some Droidette claim Google was planning to do this all along.

The thread wasnt even about Android but you wanna start shit anyways

On topic, this would be a very interesting idea if executed correctly
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post #13 of 83
Quote:
Originally Posted by Coolaaron88 View Post

The thread wasnt even about Android but you wanna start shit anyways

On topic, this would be a very interesting idea if executed correctly

Is there a potential flip side to this? Bidding prices could send them down so significantly that it would reduce to carriers to subsistence levels. This could squeeze network development and eventually reduce the infrastructure to its knees. Without a reliable network, a good part of iphones functionality is lost.

I don't see this working out too well. Sounds great from a consumer perspective but the end game to me appears to be an overall negative.
post #14 of 83
Wow, this shows how sad the wireless industry is in the US, that you have to have a patent to force some sort of competition among the cartels. Hilarious. Hey Apple, maybe you should start by selling unlocked iPhones in the US just for kicks.
post #15 of 83
Google will have all their copies machine ready. 3 2 1....

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post #16 of 83
Quote:
Originally Posted by Matthew Yohe View Post

Uhm, yeah, while they have been awarded this patent, I thought it was pretty obvious that this is an abandoned concept, and only exists if the deals with Cingular didn't pan out. The talk is that they considered this option, but obviously, they have struck a deal with multiple wireless companies now. I highly doubt this will ever happen.

For this to happen, it would require co-operation from the carriers.
And because it could cause a sea change in the way they do business, I don't see them falling over themselves to offer this option.

However in Europe, customers face a mess of individual carriers in individual countries. Imagine the US with different carriers in different states. And yet Europe is supposed to be a single market.

I could imagine the possibility of European legislators, demanding that carriers offer this option.

C.
post #17 of 83
I wonder if that bid is going to be combinatorial in any way, e.g., I will bid for a high rate at high cost, or low rate at low cost. There are patents on combinatorial bidding languages. ( e.g., http://www.faqs.org/patents/app/20090094153 )
post #18 of 83
Quote:
Originally Posted by cgrisar View Post

After a cut in the software, after a cut on content, now Apple wants/needs a cut in the phone billing now that the exclusivity contracts stand on their last legs. And some people probably believing that Apple has a right to it as Apple - according to them - created the market.

I'd rather pay money to Apple than a carrier.

Especially a mobile carrier that wants to charge me $10 per megabyte for having the audacity to travel across a border.

C.
post #19 of 83
Quote:
Originally Posted by Carniphage View Post

I'd rather pay money to Apple than a carrier.

Especially a mobile carrier that wants to charge me $10 per megabyte for having the audacity to travel across a border.

C.

Choose a different carrier.
post #20 of 83
Quote:
Originally Posted by djsherly View Post

Choose a different carrier.

Please tell me a carrier that does not have roaming charges?

C.
post #21 of 83
Quote:
Originally Posted by Carniphage View Post

Please tell me a carrier that does not have roaming charges?

C.

Never said there was. I'm just having a bit of fun.
post #22 of 83
Assuming this ever came to pass, why would carriers ever subsidize phone manufacturers prices to consumers again?
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post #23 of 83
Quote:
Originally Posted by digitalclips View Post

Assuming this ever came to pass, why would carriers ever subsidize phone manufacturers prices to consumers again?

The subsidy is a loan - offset agains the revenues the carrier will charge you down the line.
A carrier is only going to do that, if you are locked to his network.

In an ideal world, you'd have the choice of both.

However, there would be nothing to prevent Apple from offering its own subsidy.

C.
post #24 of 83
Quote:
Originally Posted by digitalclips View Post

Assuming this ever came to pass, why would carriers ever subsidize phone manufacturers prices to consumers again?

I think that under this model the subsidization (is that even a word!?) would come from Apple instead of the wireless provider(s). Or perhaps this would end subsidies all together and we'd end up with $300-$400 iPhones and lower monthly bills. I'd be okay with this path as long as the savings were realized in the first 6-12 months.
post #25 of 83
Quote:
Originally Posted by pika2000 View Post

Wow, this shows how sad the wireless industry is in the US, that you have to have a patent to force some sort of competition among the cartels. Hilarious. Hey Apple, maybe you should start by selling unlocked iPhones in the US just for kicks.

It's worse than that. Try the fact that this stupid business method patent got granted in the first place.

Or maybe apple doesn't want people to know their phone can cost $800-$1000 unlocked.
post #26 of 83
Quote:
Originally Posted by pika2000 View Post

Wow, this shows how sad the wireless industry is in the US, that you have to have a patent to force some sort of competition among the cartels. Hilarious. Hey Apple, maybe you should start by selling unlocked iPhones in the US just for kicks.

Not sure that European competition is a model of perfection.

C.
post #27 of 83
It'd work great for International travel, instead of paying roaming rates you'd pay local rates wherever you go, billed via an iTunes account.

No wonder European carriers are against it, I'd say roaming charges would make a nice little earner for them.
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post #28 of 83
Quote:
Originally Posted by Carniphage View Post

The subsidy is a loan - offset agains the revenues the carrier will charge you down the line.
A carrier is only going to do that, if you are locked to his network.

In an ideal world, you'd have the choice of both.

However, there would be nothing to prevent Apple from offering its own subsidy.

C.

Yes exactly, you reiterated my point. I can see this being the future. If Apple acts as the middleman between their own clients and a group of carriers they can easily drop the iPhone cost to those that subscribe to this system. This just maybe the biggest news on Apple in a long time. Imagine the sales of iPhones that are a fraction of the cost and negotiate, on the fly, the lowest connection rate for any call! Wow! Could this be one use for the new data center in the Carolinas?
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post #29 of 83
Apple is just trying to control everything...just like Apple likes to do. Here is the down side as stated in the article "several European carriers threatened Apple that such a feature would jeopardize their willingness to subsidize future versions of the iPhone." You will save a few pennies on your phone bill but get ready to pay $500 - $700 for that new phone.
post #30 of 83
Quote:
Originally Posted by vjo,npd View Post

Apple is just trying to control everything...just like Apple likes to do. Here is the down side as stated in the article "several European carriers threatened Apple that such a feature would jeopardize their willingness to subsidize future versions of the iPhone." You will save a few pennies on your phone bill but get ready to pay $500 - $700 for that new phone.

Oh dear.

We already do pay $700 for the phone. It's just that it is paid by a hire-purchase agreement with carriers. It is called a contract.

Carriers would STILL BE ABLE TO DO THIS.

C.
post #31 of 83
Quote:
The patent specifically lists Verizon and Sprint as examples of carriers from which MVNOs purchase minutes.

My take, is that this could be used in any carrier situation, but will be much more meaningful in the 700mhz LTE arena. When those systems are up and running, you will see 3-5 compatible carrier signals in any given US location. Some of those carriers could be smaller operators, some will be large national carriers (VZW, ATT, et al).

This would effectively create an iCarrier store for apple to use to interface on the license holder, tower operator, side of the equation. Apple has already usurped the sanctity of the handset holder < - > carrier relationship, why not go for yet another one.
post #32 of 83
Quote:
Originally Posted by c-ray View Post

My take, is that this could be used in any carrier situation, but will be much more meaningful in the 700mhz LTE arena. When those systems are up and running, you will see 3-5 compatible carrier signals in any given US location. Some of those carriers could be smaller operators, some will be large national carriers (VZW, ATT, et al).

This would effectively create an iCarrier store for apple to use to interface on the license holder, tower operator, side of the equation. Apple has already usurped the sanctity of the handset holder < - > carrier relationship, why not go for yet another one.

I think this is exactly what is coming. The new data center maybe involved you think?

Many will scream that is more of Apple's closed system mentality ironically when in fact it is liberating. Wow, wow, wow AAPL might hit 1000 in my lifetime This is big.

My question is, if Apple has been granted a patent on this, how long before Google, Microsoft et al manage to copy Apple yet again?

BTW to those worried about costs of iPhones ... with this Apple can subsidize their own iPhones in this plan as others have pointed out. We are paying the full price now just over time in our contracts.
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post #33 of 83
Slow down.
Isn't going to happen without carrier cooperation.
And I don't see that happening without legislation forcing carriers to play ball.

C.
post #34 of 83
Quote:
Originally Posted by Carniphage View Post

The subsidy is a loan - offset agains the revenues the carrier will charge you down the line.
In an ideal world, you'd have the choice of both.
C.

Except that loans *END*. Why is it that after my cell contract is done my bill (which should be just for service at that point) does not go down? The phone's paid for!

They want you to think it's a loan. But really it's really a scam.

-Mike
post #35 of 83
Quote:
Originally Posted by Carniphage View Post

Slow down.
Isn't going to happen without carrier cooperation.
And I don't see that happening without legislation forcing carriers to play ball.

C.

How many have to play ball before the flood gate opens? I acknowledge this may only operate in the USA, Europe maybe a whole other ball of wax. Not sure about the rest of the Americas.
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post #36 of 83
Quote:
Originally Posted by mcashwell View Post

Except that loans *END*. Why is it that after my cell contract is done my bill (which should be just for service at that point) does not go down? The phone's paid for!

They want you to think it's a loan. But really it's really a scam.

Well of course it is.
Which is why a new business model would be preferable.

C.
post #37 of 83
Quote:
Originally Posted by mcashwell View Post

Except that loans *END*. Why is it that after my cell contract is done my bill (which should be just for service at that point) does not go down? The phone's paid for!

They want you to think it's a loan. But really it's really a scam.

-Mike

You said it! Yet another reason why this plan of Apple's will be sweet. We have been at the mercy of a what is literally a cartel in the US for too long.
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post #38 of 83
Quote:
Originally Posted by digitalclips View Post

How many have to play ball before the flood gate opens? I acknowledge this may only operate in the USA, Europe maybe a whole other ball of wax. Not sure about the rest of the Americas.

Like I said earlier, I can see this happening in Europe before the US.

The European Court of Justice just made a very interesting ruling relating to national boundaries for subscription television. It would be great if they took on the carriers.

C.
post #39 of 83
Quote:
Originally Posted by Carniphage View Post

Like I said earlier, I can see this happening in Europe before the US.

The European Court of Justice just made a very interesting ruling relating to national boundaries for subscription television. It would be great if they took on the carriers.

C.

Well that is good news. I don't follow the Euro side so much anymore so I am out of touch. I can see it happening here the only question is, how soon?

btw, I am originally from Chesterfield
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post #40 of 83
Quote:
Originally Posted by Whozown View Post

What?\

Essentially someone at Apple has elephant sized family jewels.
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