Filing: Apple conceptualized smart MVNO system ahead of iPhone

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 46
    jeffdmjeffdm Posts: 12,949member
    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.
  • Reply 2 of 46
    petermacpetermac Posts: 115member
    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.
  • Reply 3 of 46
    hdasmithhdasmith Posts: 145member
    I really like that idea.
  • Reply 4 of 46
    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?
  • Reply 5 of 46
    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.
  • Reply 6 of 46
    slewisslewis Posts: 2,080member
    Null.
  • Reply 7 of 46
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by JeffDM View Post


    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.
  • Reply 8 of 46
    Quote:
    Originally Posted by Crtaylor View Post


    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.
  • Reply 9 of 46
    macinthe408macinthe408 Posts: 1,050member
    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...
  • Reply 10 of 46
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by anantksundaram View Post


    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!
  • Reply 11 of 46
    Quote:
    Originally Posted by macinthe408 View Post


    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.
  • Reply 12 of 46
    Quote:
    Originally Posted by petermac View Post


    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.
  • Reply 13 of 46
    mh71mh71 Posts: 44member
    Quote:
    Originally Posted by macinthe408 View Post


    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.
  • Reply 14 of 46
    mh71mh71 Posts: 44member
    Quote:
    Originally Posted by kenaustus View Post


    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.
  • Reply 15 of 46
    olternautolternaut Posts: 1,376member
    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.
  • Reply 16 of 46
    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?
  • Reply 17 of 46
    sapporobabysapporobaby Posts: 1,079member
    Quote:
    Originally Posted by petermac View Post


    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.
  • Reply 18 of 46
    slewisslewis Posts: 2,080member
    Null.
  • Reply 19 of 46
    sapporobabysapporobaby Posts: 1,079member
    Quote:
    Originally Posted by Slewis View Post


    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.
  • Reply 20 of 46
    outsideroutsider Posts: 6,008member
    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.
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