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Jobs wanted to build cell network dedicated to iPhone

post #1 of 39
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Before launching the first iPhone, late Apple co-founder Steve Jobs wanted to replace established mobile carriers by creating a proprietary network specifically for the handset by leveraging an unused license-free spectrum band.

In a speech on Monday at the Law Seminars International event in Seattle, wireless industry pioneer John Stanton said Jobs looked to create a proprietary wireless network for Apple's upcoming iPhone rather than work with existing carriers, reports Macworld.

Stanton, who is now chairman of venture capital firm Trilogy Partners, said he met with the former Apple chief between 2005 and 2007 to discuss the creation of a new network built on the unlicensed WiFi spectrum. The move would give Apple the ability to manufacture a mobile handset as well as be in control of the service that supported the device.

"[Jobs] wanted to replace carriers," Stanton said. "He and I spent a lot of time talking about whether synthetically you could create a carrier using Wi-Fi spectrum. That was part of his vision."

Jobs ultimately dropped the idea in 2007, however he still managed to have a huge impact on wireless operators who wanted to carry Apple's popular device. Most recently Sprint made a nearly $20 billion four-year deal with Apple to become an authorized iPhone carrier.

"If I were a carrier, I'd be concerned about the dramatic shift in power that occurred," Stanton said.

He went on to explain that Apple sells software and services through outlets like the App Store and iTunes that might have otherwise gone to the operators. iOS apps download numbers continue to grow, recently reaching the 15 billion download mark, and look to be a significant source of revenue for the company in the coming year.

Stanton advises current wireless carriers to take chances with new phones and services rather than relying on established products. When he was head of Voicestream, the operator that later became T-Mobile, Stanton invested in Sidekick inventor Danger and Research in Motion.

"We had investments in those spaces because in part we were the little guy and we wanted access to unique devices," he said.

The issue of being carrier independent isn't completely unheard of as AppleInsider previously reported on Apple's granted patent filings in February that could allow future iPhones to select preferred wireless carriers by creating a mobile virtual network operator (MVNO) system. If ever instituted, the system would call for carriers against each other over wireless services provided to iPhone users. The original patent filing dates back to April, 2008.
post #2 of 39
1) I really wish the carriers were more open to profit sharing. I think that would have made it better for them in the long run by allowing them to no fork over huge lump payments up front as we are seeing with Sprint, and give even more reason for Apple to update older iPhones.


2) I'm surprised this gem from Robert X. Cringely wasn't mentioned in the article. Even if Jobs knew nothing of the article it is basically a lot of what Josb was envisioning with a WiFi-everywhere infrastructure that would disrupt mobile network operators.

»

http://www.pbs.org/cringely/pulpit/2...27_000456.html
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post #3 of 39
And if they had made their own phone network, well then they probably wouldn't sold as many iPhones.

I <3 GSM
post #4 of 39
It sounds like Steve Jobs to want to completely own responsibility for the user experience. The carriers' interests have sometimes conflicted with Jobs' vision. To think that Apple would have gone into competition with them. Plus, if they had done it, there would have been even less distinction between the iPhone and the iPod Touch.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #5 of 39
Quote:
Originally Posted by Suddenly Newton View Post

It sounds like Steve Jobs to want to completely own responsibility for the user experience. The carriers' interests have sometimes conflicted with Jobs' vision. To think that Apple would have gone into competition with them. Plus, if they had done it, there would have been even less distinction between the iPhone and the iPod Touch.

If we're talking WiFi-only there would be no need for an iPod Touch. The problem is that the concept in fatally flawed. I'm glad Apple went the route they went. All cellphone users are better for t.
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post #6 of 39
too bad they didn't. can't believe how much we pay for these 'sh**' networks.
post #7 of 39
An unlicensed WiFi network would not be a "cell network"
post #8 of 39
Quote:
Originally Posted by solipsism View Post

The problem is that the concept in fatally flawed.

Why? 802.22 makes me think a nationwide "Wi-Fi" network is doable.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #9 of 39
Quote:
Originally Posted by screamingfist View Post

too bad they didn't. can't believe how much we pay for these 'sh**' networks.

LOL. And you think Apple would have settled for the profit margins that AT&T/Verizon/etc receive?

Think again. There's NOTHING about Apple products and prices that suggest that an Apple network wouldn't have been as expensive if not more.
post #10 of 39
This is one of those crazy ideas (disintermediating the telcos) that we'd all love to happen, but it's a capital cost no one, not Apple, not Google, is willing to take on.

Taking on the telcos with ubiquitous ad-hoc wifi sharing is kind of a cool idea. Democratizing. If every phone was a WiFi hotspot, could you have an internet connection through WiFi sharing across multiple WiFi hotspot hops a mile away? I don't know. If public WiFi was a reality, this idea could be tried out, but alas no.

The other way is to create a wireless network separate from the telcos today. That'll involve investing 10s of billions in backhaul infrastructure and 10s of billions of wireless spectrum licenses from the gov't. 40 billion may not be enough. If Apple was willing to do though, just create a wireless network independent of the existing telcos, operate it like iTunes-like "a little bit above break-even", with the all-you-can-eat plans, pay-as-you-go plans of our dreams, it would disintermediate the existing telcos.
post #11 of 39
Thank god that didn't happen.
post #12 of 39
Quote:
Originally Posted by StLBluesFan View Post

LOL. And you think Apple would have settled for the profit margins that AT&T/Verizon/etc receive?

Think again. There's NOTHING about Apple products and prices that suggest that an Apple network wouldn't have been as expensive if not more.

Sure there is. Who wouldn't want to pay an unsubsidized $600 and not have to pay a cell bill.

Even if they charged a premium to pay for the network, it would take a lot to reach the $2000+ we pay over a 2 year contract.

Remember. Apple makes money on hardware. Services exist for them to sell the hardware. The concept was good, albeit impossible at this time. Maybe in 10-20 years we will see something like that.
post #13 of 39
Quote:
Originally Posted by StLBluesFan View Post

LOL. And you think Apple would have settled for the profit margins that AT&T/Verizon/etc receive?

Think again. There's NOTHING about Apple products and prices that suggest that an Apple network wouldn't have been as expensive if not more.

the expense isn't the issue. its what you get for it that is.
post #14 of 39
Quote:
Originally Posted by StLBluesFan View Post

Think again. There's NOTHING about Apple products and prices that suggest that an Apple network wouldn't have been as expensive if not more.

Well, texting, video and picture messages would be free. I'm sure data would be unlimited. And if the network had been created at the iPhone's inception, such a network would be priced competitively with existing ones, so right now, provided the telecoms do exactly what they've done (the butterfly effect asserts that they wouldn't, but let's ignore that), Apple would have the most affordable network.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #15 of 39
Quote:
Originally Posted by AppleInsider View Post

The issue of being carrier independent isn't completely unheard of as AppleInsider previously reported on Apple's granted patent filings in February that could allow future iPhones to select preferred wireless carriers by creating a mobile virtual network operator (MVNO) system. If ever instituted, the system would call for carriers against each other over wireless services provided to iPhone users. The original patent filing dates back to April, 2008.

The MVNO option was widely discussed and speculated about by the whole blogging world and their pet rabbit in the unprecedented rumour mill and wild build-up to the emergence of iPhone v1 in 2007.

In the event, with hindsight, the decision to play hard-ball with the carriers turned out to be the right (and massively lucrative) one, with initial objectors like Verizon and Sprint being eventually assimilated into the i-Collective...

Resistance was futile :-)
post #16 of 39
When the rumours were first flying around about Apple introducing a phone, I imagined that this would be something they would have considered or even introduced.

Who knows - maybe this is something we will see in the future...
post #17 of 39
Let's say this can work in the US (big assumption).

Then what do you do in other countries? $80B can only go so far (can't believe I am writing this!).
post #18 of 39
I still want them to do this....

Here's a plan- buy Sprint. Unlimited everything for up to 5 apple devices per account. $80 a month. The end.

ask me why this would be smart for Apple- ask me- go ahead!
post #19 of 39
Quote:
Originally Posted by iansilv View Post

Here's a plan- buy Sprint. Unlimited everything for up to 5 apple devices per account. $80 a month. The end.

$80 a month regardless of the number of devices? So $80 if you have one and $80 if you have five (and have it be an extra $15 or something for every device over 5)?

I like it. A lot.

It's financially impossible for any company anywhere, but it's a great-sounding idea.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #20 of 39
If apple partners with the cablecompanies it can. Here on long island cablevision has wifi access points in a lot of places. Its 15/3 speeds. I use it for data when not home. Comcast is basing there wifi off of what cablevision is doing. Apple can partner with them to start wifi calling.

I know cablevision is looking into it,
post #21 of 39
Quote:
Originally Posted by Tallest Skil View Post

$80 a month regardless of the number of devices? So $80 if you have one and $80 if you have five (and have it be an extra $15 or something for every device over 5)?

I like it. A lot.

It's financially impossible for any company anywhere, but it's a great-sounding idea.

Up to five devices at once. Maybe 3, whatever- the point is that with the 4G network, Apple would have a way to offer broadband to homes. This would head-off Cox and other home broadband providers from imposing data caps which would stifle the ability of consumers to buy movies on the internet from Apple.
post #22 of 39
Quote:
Originally Posted by AppleInsider View Post

He goes on to explain that Apple sells software and services through outlets like the App Store and iTunes that might have otherwise gone to the operators

That's the part that truly gives me nightmares: carriers peddling software (similar to how they used to peddle ringtones and the like). Companies mostly made up of people who don't even know what a software developer is (and don't really care), trying to market, distribute and take a cut of software sales. So glad Apple won out on this...
 
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post #23 of 39
I remember I used to get very angry in those days when smartphone manufacturers removed WiFi only for US market since carriers (the evil empire) would not let them.
post #24 of 39
Quote:
Originally Posted by iansilv View Post

I still want them to do this....

Here's a plan- buy Sprint. Unlimited everything for up to 5 apple devices per account. $80 a month. The end.

ask me why this would be smart for Apple- ask me- go ahead!

I know, it's a trick question, right? Because it wouldn't be smart for Apple.

Apple fans need to try to understand that just because THEY want something doesn't mean Apple can make money delivering it.

For instance, ATT made $3.5 billion in profits last quarter. That's 1.1 billion per month. It has 100 million subscribers. Thus, the profit per sub per month is $11. On those "outrageous" $80-100 monthly bills. I think the ARPU is something like $60. So for every three users ATT charges maybe $180 per month, and profits $30. What's the profit if you drop the charges to $80? Here's a hint. It starts with a -

And you think Apple should provide cell service for 5 users for $80. So clueless.

First of all ATT has huge scale that enables it to earn even that amount of money. It has huge fixed investments made over the course of decades that allow it to provide the "inferior" services that it provides. By the way, I'm SURE you knew that Apple has $256 BILLION in fixed assets. Yeah, those are the towers and lines between them that make cell service possible. After all those decades and all those hundreds of billions of dollars of investment, they earn less profit than Apple does.

I've said it 100 times and I'll say it again - thank god no one at Apple listens to the armchair analysts who populate these boards.
post #25 of 39
Would have loved to see Steve's attention to detail used to hone cellular service down to exactly what it is: a data pipe. Eliminating the many sideshows (e.g. home monitoring systems -- I'm looking at you Rogers) and focusing effort on the things that really matter: quality of service and data capacity.
 
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post #26 of 39
I always though if Apple took over ATT they might have gotten some tech innovation to deal with the bandwidth problem.

If Apple became a a telecom, can they make enough profit on hardware sales and break even on service like they do on the iPod/iTunes model?

Can they be a contract-free, low fee competition to the others?

Will they let other phones on the network?

Can they innovate new services and wireless technology?
post #27 of 39
Quote:
Originally Posted by auxio View Post

That's the part that truly gives me nightmares: carriers peddling software (similar to how they used to peddle ringtones and the like). Companies mostly made up of people who don't even know what a software developer is (and don't really care), trying to market, distribute and take a cut of software sales. So glad Apple won out on this...

It wouldn't have ever happened. "apps" would have never been integral to the experience if carriers were the ones distributing them. In hindsight it seems like lost revenue for them, but its revenue that wouldn't have otherwise existed
post #28 of 39
Quote:
Originally Posted by cameronj View Post

I know, it's a trick question, right? Because it wouldn't be smart for Apple.

Apple fans need to try to understand that just because THEY want something doesn't mean Apple can make money delivering it.

For instance, ATT made $3.5 billion in profits last quarter. That's 1.1 billion per month. It has 100 million subscribers. Thus, the profit per sub per month is $11. On those "outrageous" $80-100 monthly bills. I think the ARPU is something like $60. So for every three users ATT charges maybe $180 per month, and profits $30. What's the profit if you drop the charges to $80? Here's a hint. It starts with a -

And you think Apple should provide cell service for 5 users for $80. So clueless.

First of all ATT has huge scale that enables it to earn even that amount of money. It has huge fixed investments made over the course of decades that allow it to provide the "inferior" services that it provides. By the way, I'm SURE you knew that Apple has $256 BILLION in fixed assets. Yeah, those are the towers and lines between them that make cell service possible. After all those decades and all those hundreds of billions of dollars of investment, they earn less profit than Apple does.

I've said it 100 times and I'll say it again - thank god no one at Apple listens to the armchair analysts who populate these boards.

Yeah yeah yeah.

But one can dream!

There's a reason it didn't work, namely it wasn't feasible. So it's nothing more than "what if"
post #29 of 39
09-21-2006, 10:38 PM :: "Prediction: Apple iPhone is GSM locked to Apple Mobile MVNO"
http://forums.appleinsider.com/showthread.php?t=66907
post #30 of 39
Quote:
Originally Posted by Tallest Skil View Post

Why? 802.22 makes me think a nationwide "Wi-Fi" network is doable.

Because Wi-Fi has severe issues with things like mobility or capacity when you start putting more than a few users into a cell? It's after all a nomadic technology at best meant to be a wireless replacement for a fixed LAN.

Sure you could make it mobile, but that would require a ton of proprietary vendor specific extensions for starters.

Regs, Jarkko
post #31 of 39
I've been speculating for awhile (tongue-in-cheek, mostly) that this is what Apple's cash hoarding is about (I was thinking maybe they make their own next gen LEO satellite network for global coverage). It's obvious they have to move undermine the carriers at some point. They've chipped away at them but there has to be some long-term game plan.
post #32 of 39
Quote:
Originally Posted by jahonen View Post

Because Wi-Fi has severe issues with things like mobility or capacity when you start putting more than a few users into a cell? It's after all a nomadic technology at best meant to be a wireless replacement for a fixed LAN.

Sure you could make it mobile, but that would require a ton of proprietary vendor specific extensions for starters.

Regs, Jarkko

802.22 isn't really Wi-Fi, hence the quotes. It's designed for that very purpose, I think.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply
post #33 of 39
Quote:
Originally Posted by halfyearsun View Post

It wouldn't have ever happened. "apps" would have never been integral to the experience if carriers were the ones distributing them. In hindsight it seems like lost revenue for them, but its revenue that wouldn't have otherwise existed

It may have "existed", but certainly not in as well thought out and executed manner as the iTunes app store. Which probably would have led to it's inevitable demise (due to poor experiences for both app purchasers and developers). That plus fragmentation because every carrier would have it's own version of an app store (each with it's own uniquely craptacular experience).
 
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post #34 of 39
Quote:
Originally Posted by StLBluesFan View Post

LOL. And you think Apple would have settled for the profit margins that AT&T/Verizon/etc receive?
...


ATT (last quarter) posted that their mobile segment was operating on a 29.6% margin. Hardly a "settling" profit margin.

for comparison, Exxon (an "evil" oil company) had a 12.2% profit margin in the same quarter ($10.3 billion profit on $125.3 billion revenue)





http://www.att.com/Investor/Financia...ts_IB_3Q11.xls
post #35 of 39
Quote:
Originally Posted by cameronj View Post

I know, it's a trick question, right? Because it wouldn't be smart for Apple.

Apple fans need to try to understand that just because THEY want something doesn't mean Apple can make money delivering it.

For instance, ATT made $3.5 billion in profits last quarter. It has 100 million subscribers. Thus, the profit per sub per month is $11. On those "outrageous" $80-100 monthly bills.



that was ATT as a whole. ATT's mobile unit posted 29% margins.
post #36 of 39
Quote:
Originally Posted by Tallest Skil View Post

802.22 isn't really Wi-Fi, hence the quotes. It's designed for that very purpose, I think.

It's a WRAN technology, which makes it even worse for things like voice traffic, where the cell change should be seamless. It isn't really defined for mobility at all so a nomadic system would be a better description. WiMAX had a similar start and one of the reasons why telcos didn't like it as much (true mobility came as an add-on really to WiMAX).

The IEEE equivalent for mobility (with support for 250km/h speed and bitrates up to 80Mbpx) is 802.20, which was published in 2008, but hasn't been taken up by any significant amount since HSPA, CDMA2000 and LTE have achieved pretty much the goals of 802.20.

Regs, Jarkko
post #37 of 39
Quote:
Originally Posted by sandor View Post

that was ATT as a whole. ATT's mobile unit posted 29% margins.

Not to mention the fact that a lot of their costs also have to do with subsidizing expensive handsets.

In any event, I doubt Apple could start its own telco without drawing some kind of federal attention. Imagine what the antitrust authorities would say about an OEM owning a network and banning all their competitor's devices from the network.
post #38 of 39
Google tried this early/mid 2K... they pulled out, although they still own some bandwidth from the FCC(?).

Interesting article between Google and Andrew Seybold...
post #39 of 39
Quote:
Originally Posted by stelligent View Post

Let's say this can work in the US (big assumption).

Then what do you do in other countries? $80B can only go so far (can't believe I am writing this!).

You must work in Washington DC..
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