Apple granted patent where carriers bid for iPhone service

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 84
    What?\
  • Reply 2 of 84
    sflocalsflocal Posts: 4,382member
    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.
  • Reply 3 of 84
    Quote:
    Originally Posted by Whozown View Post


    What?\



    agreed..
  • Reply 4 of 84
    oc4theooc4theo Posts: 294member
    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.
  • Reply 5 of 84
    cpsrocpsro Posts: 2,428member
    Next we'll see this for Android and hear some Droidette claim Google was planning to do this all along.
  • Reply 6 of 84
    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.



  • Reply 7 of 84
    Quote:
    Originally Posted by Whozown View Post


    What?\



    My reaction as well.
  • Reply 8 of 84
    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.
  • Reply 9 of 84
    carniphagecarniphage Posts: 1,984member
    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.
  • Reply 10 of 84
    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.
  • Reply 11 of 84
    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
  • Reply 12 of 84
    djsherlydjsherly Posts: 1,012member
    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.
  • Reply 13 of 84
    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.
  • Reply 14 of 84
    Google will have all their copies machine ready. 3 2 1....
  • Reply 15 of 84
    carniphagecarniphage Posts: 1,984member
    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.
  • Reply 16 of 84
    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 )
  • Reply 17 of 84
    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.
  • Reply 18 of 84
    carniphagecarniphage Posts: 1,984member
    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.
  • Reply 19 of 84
    djsherlydjsherly Posts: 1,012member
    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.
  • Reply 20 of 84
    carniphagecarniphage Posts: 1,984member
    Quote:
    Originally Posted by djsherly View Post


    Choose a different carrier.



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



    C.
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