Rumor: Apple considering becoming a carrier, leasing network from existing wireless providers
Apple is allegedly in talks with wireless providers in both the U.S. and Europe about launching its own cellular service, in the same way MetroPCS and Boost Mobile piggyback on established carrier networks.
Citing sources close to Apple, Business Insider reported on Monday that Apple is "privately trialling" a mobile virtual network operator, or MVNO, service in the U.S. It was said that Apple is looking long-term, and it doesn't plan to launch its own network within at least five years.
Apple explored that approach before it launched the first iPhone, as revealed by patent filings that described a system that would automatically switch between multiple wireless carriers. The original concept would have had Apple sell the first iPhone contract-free on its own roaming network.
One report alleged that late Apple cofounder Steve Jobs sought to build out an entire cell network dedicated to the first iPhone.
Any alleged interest by Apple in forming an MVNO would undoubtedly be met with resistance from carriers, however. And those same wireless providers would need to sell network capacity to Apple for its MVNO, essentially forfeiting their most profitable wireless subscribers to Apple-leased network space.
For that reason, it seems unlikely that carriers such as AT&T or Verizon in the U.S. would be willing to work with Apple and sell network capacity.
Repeated studies have shown that iPhone owners consume more data than any other smartphone user. That makes iPhone owners the most profitable subscribers for wireless carriers -- almost certainly the type of customer that carriers would not want to hand over to an Apple MVNO.
Last year, Apple launched its own SIM card, limited to the iPad Air 2 with cellular connection. That alone was enough to upset Verizon, which refused to support the Apple SIM. As a result, Verizon customers in the U.S. must buy an LTE iPad from Apple, and then obtain a SIM card separately from Verizon.
AppleInsider's own sources said earlier this year that the company is considering shipping its anticipated "iPhone 6s" with the Apple SIM card. But that too would likely create concern amongst carriers around the world.
MVNOs lease their voice and data service from major carriers. That excess capacity is sold to smaller companies at a discounted rate, who then sell budget mobile plans to customers.
In 2012, CEO Tim Cook said Apple doesn't need to "own the pipe," referring to investment in carrier networks. He noted that Apple is focused on delivering quality devices and would rather leave network operations to its partners.
Google has already announced its own "Project Fi" mobile network plans earlier this year. Google's MVNO service is limited to the company's flagship Nexus 6 smartphone, and features a "pay what you use" data billing policy.
Citing sources close to Apple, Business Insider reported on Monday that Apple is "privately trialling" a mobile virtual network operator, or MVNO, service in the U.S. It was said that Apple is looking long-term, and it doesn't plan to launch its own network within at least five years.
Any alleged interest by Apple in forming an MVNO would undoubtedly be met with resistance from carriers, who profit greatly from iPhone users and their heavy data consumption.
Apple explored that approach before it launched the first iPhone, as revealed by patent filings that described a system that would automatically switch between multiple wireless carriers. The original concept would have had Apple sell the first iPhone contract-free on its own roaming network.
One report alleged that late Apple cofounder Steve Jobs sought to build out an entire cell network dedicated to the first iPhone.
Any alleged interest by Apple in forming an MVNO would undoubtedly be met with resistance from carriers, however. And those same wireless providers would need to sell network capacity to Apple for its MVNO, essentially forfeiting their most profitable wireless subscribers to Apple-leased network space.
For that reason, it seems unlikely that carriers such as AT&T or Verizon in the U.S. would be willing to work with Apple and sell network capacity.
Repeated studies have shown that iPhone owners consume more data than any other smartphone user. That makes iPhone owners the most profitable subscribers for wireless carriers -- almost certainly the type of customer that carriers would not want to hand over to an Apple MVNO.
Last year, Apple launched its own SIM card, limited to the iPad Air 2 with cellular connection. That alone was enough to upset Verizon, which refused to support the Apple SIM. As a result, Verizon customers in the U.S. must buy an LTE iPad from Apple, and then obtain a SIM card separately from Verizon.
AppleInsider's own sources said earlier this year that the company is considering shipping its anticipated "iPhone 6s" with the Apple SIM card. But that too would likely create concern amongst carriers around the world.
MVNOs lease their voice and data service from major carriers. That excess capacity is sold to smaller companies at a discounted rate, who then sell budget mobile plans to customers.
In 2012, CEO Tim Cook said Apple doesn't need to "own the pipe," referring to investment in carrier networks. He noted that Apple is focused on delivering quality devices and would rather leave network operations to its partners.
Google has already announced its own "Project Fi" mobile network plans earlier this year. Google's MVNO service is limited to the company's flagship Nexus 6 smartphone, and features a "pay what you use" data billing policy.
Comments
the main carriers will always be able to undercut apple on price, unless they plan on running at a loss
Ah, good 'ol knee jerk Libertarianism at work...
Couldn't be that LACK of government action (in the form of preventing telecom monopolies) is the real problem, and that they should be instead regulated as utilities, huh?
What in the world is "knee jerk Libertarianism"? Is that something practiced by all of our overbearing, meddling political masters? Oh, that's right...there are no Libertarian masters.
Well one of those market share firms reported today that Apple dropped to third in Chna, behind Huawei and Xiaomi. I think those reports are stupid but it's just the kind of thing that could panic Wall Street. Man I can't wait until Apple is no longer just the iPhone in China company.
Ah, good 'ol knee jerk Libertarianism at work...
Couldn't be that LACK of government action (in the form of preventing telecom monopolies) is the real problem, and that they should be instead regulated as utilities, huh?
We had a real telecom monopoly. Called the Bell System. The moment it was broken up, telephone hardware prices dropped by 50%. Remember how much long distance cost in 1983? $.58/minute (1999 dollars). Do you know how much long distance costs today? Wholesale, about a tenth of a cent per minute.
Just more uninformed Democrat rabble by kids too young to know better.
And it should be noted that the telephone monopoly that used to exist did not happen because of market forces. It was thanks to longstanding collusion between AT&T and government.
I have been on MVNO for past 4 years since iPhone 4S came out. In my case it's Straight Talk MVNO they lease Sprint, Verizon, AT&T and T-Mobile you get 5GB data and unlimited talk text and all the rest. My iPhone 6 works perfectly and connects to AT&T tours which support LTE in some areas I get 50 MB/s down and up, but I never went over 5GB yet and if you do go over your limit Straight Talk will throttle your speed to 128kb/s which is enough to send texts or send and receive emails. Next pay period you will get another 5GB and all that for $50 a month and no BS. I am very happy never had a problem!
Now dropped below 3%... The alleged connection to Apple is the Greek stock market "bloodbath" in progress, so it's just wholly irrational panic selling.
Just here to remind Sog that he has promised to self-ban for a year if AAPL fails to hit $150 by year end...
We see the same sort of coercion today when Cogent or Netflix get into a spat with ATT or Comcast. They look back on the days of paying for long distance by the minute and drool. There was almost zero cost to upgrading their interconnects with Netflix (a couple of patch cables) but they own the last mile so you have no choice.
To address the article, it seems like buying Sprint or T-Mobile would be a better choice since both already own spectrum and networks. Their market caps are 13B and 30B respectively. It would be a lot cheaper to start there and build up. Sprint comes with the bonus of owning a huge amount of fiber crossing the USA and a bunch of undersea links.
I've been arguing for four years that the big tech companies will be forced to take on the network gatekeepers or face increasingly punitive "rents" as the telco and cable companies look jealously on tech profits. Google fiber is an obvious shot across their bow. Apple needs to get on the game.
Nirvana!
If governments would stay out of it Apple could probably buy every single one of them, maybe even throw Google in as a bonus, and still have some cash left over. Cut out everyone who won't use an Apple device.
'could' isn't 'would' and I don't think Apple wants to get into that business (dumb pipes).
As long as Apple can solve the 'phone number' problem (DNS for phones: When I get off the plane in Tokyo, can I just get a NipponTel signal, pay via my AppleID, and my contact list can still call me), I just want to be able to change my carrier whenever it's financially prudent.
I believe you/we are being baited a bit, for amusement.