Apple to crush carriers, become direct service provider | Hacker News Reader

Apple to crush carriers, become direct service provider

bgr.com

25 pointskemper31 comments

It's very hard to imagine Apple as a traditional MVNO where their brand would take all the hits for network quality and yet have little to no ability to impact things on the engineering side. There is a reason that there aren't premium MVNO's.

Bingo. And the probability of Apple building their own wireless network is pretty close to zero.

Especially since that isn't the sort of business they tend to get into anyway. Apple hasn't become a record label either, despite having been involved with the music industry rather longer. Ultimately, being a mobile network operator simply doesn't give Apple the opportunity to provide a superior product in the same kind of way that building hardware/software does, so I strongly doubt they'd do it.

Filed under, "I'll believe it when I see it."

And where are they supposed to get all the towers? That's a multi-year construction project and, if they try it, they'll alienate their existing carrier partners.

Now maybe Apple thinks they can afford to do that, but it seems risky.

> And where are they supposed to get all the towers?

They aren't.

> Bluestein said while speaking at the Informa MVNO Industry Summit in Barcelona.

http://en.wikipedia.org/wiki/Mobile_virtual_network_operator

Going MVNO would put them in the awkward position of competing with their own suppliers. Then again they're in this situation with Samsung and it hasn't been fatal yet. The one thing that makes this interesting to me is that they are now shipping handsets that will work on multiple carriers in almost every market. This would let Apple brand the service as their own but pit the carriers against each other behind the scenes to get the best deal on connectivity. A customer's phone might switch networks from hour to hour and they'd still pay the same bill and see an Apple logo in the upper left.

Is there an MVNO yet that's not just barely scraping along? They're in a lousy bargaining position and most seem to just get crushed.

The carriers don't operate their own cell towers, they're run by an outside company that just leases space to ATT/VZW. Apple could work with this company to add their new network to the towers.

This would prevent the MVNO situation where you're still dependent on one of the large carriers for the connection, and ultimately at their whims.

http://www.quora.com/Does-each-wireless-carrier-own-their-ow...

The carriers do own the spectrum though, and that's the part Apple can't easily buy. What good are your own transmitters if you aren't allowed to transmit on any frequencies?

I could be wrong, but I think process for buying spectrum varies widely from country to country.

I don't see Apple doing something like this if they can't do it globally. In other words, I would file this under "highly unlikely".

If this were to happen I might consider getting an iPhone again. I'd miss my Nexus but the service providers available now in the US are terrible.

But yeah this doesn't seem very likely.

Why didn't you include the "expert says" part when submitting the article? Especially one that has no proven track record. That changes the entire tone of this link-bait headline.

"Apple has the distribution channels, digital content portfolio and customer base to make the move, Bluestein says, and it also has more than 250 million credit cards on file for iTunes users who could be billed directly for wireless service."

Ok, and the big missing piece, oh yeah the network. You know the thing that costs 4 - 10 billion to buy the spectrum for and another 50 - 100 billion to build out the actual network stations for. Now sure, Apple to commit its entire cash pile to becoming another AT&T or Verizon but that certainly isn't going to happen.

And the other challenge I see is that the carriers all co-operate with pairing agreements and roaming agreements because they are all in the same pool. Bring in an 800 lb gorilla which is trying to 'crush' them? Do they co-operate now? Probably not.

It's more likely that this rumors are a move to extract even more cash from telcos.

Markets that require detailed interaction with customers are a minefield.

I can't see Apple wanting to be there.

Consumer telecoms is a brutal, low-margin business. The service providers are doing them a favour by being there, because they shield Apple branding from the nastiness of the domain.

[Edit: I removed some references to Google while I was mulling on it. Can't quite remember what it said, but I expect notatoad's feedback was in-spirit]

this article is about apple, not google. apple already has channels to directly interact with their customers. Apple stores are hugely successful, have a great reputation, and are everywhere.

and consumer telecom is hardly a low-margin business. it might not be as high margin as apple is used to, but consumer telecom companies seem to manage to pull in plenty of profit.

AT&T and Verizon stores are "everywhere". Apples stores are not. There are more and more, but they stick to upscale areas and big cities, so it's very easy to be 100 miles from the nearest Apple store if you aren't on the coast.

Actual quote: [..] says Apple will soon begin to offer wireless service directly to iPhone and iPad users.

In the last years Apple focused on innovation. Moving against the carriers (voice service) doesn't look too good (going against partners, very mature business == little potential & high costs)

Going in the wireless data service (internet) would however bring value: less latency, more speed, better Siri service.

Oh, come on hacker news! Don't upvote crazy Apple rumors. Leave that stuff on Macrumors.

...according to random pundit trying to get attention at industry conference.

This piece (by Jean-Louis Gassée, August 2011) is relevant:

Steve, Please Buy Us A Carrier!

http://www.mondaynote.com/2011/08/14/steve-please-buy-us-a-c...

The premise is entirely US centric - strategies aimed at ATT, Verizon, and carrier subsidies don't scale globally.

And of course, begs the question of how this would help Apple sell the hardware from which it derives the bulk of it's profits.

I'll believe it when I see it, seems very unlikely though. BGR is on a role, this has to be the second or third horrible article I've read from them this week.

It seems to be a risky move and I don't know if Apple wants to go down this path. There are huge costs tied to network operators' functions..

Please come to Canada.

They would probably charge even more than the carriers.

How would this crush the carriers when, as an MVNO, Apple would be writing the carriers a giant check every month to use their towers?

The CLEC wars proved that you can't use a network owner's wires to compete against them.

I'm not sure Apple should play that game unless they are ready to handle the extra regulatory and infrastructure management loads.

Looks like nothing more than a rumor, flagged.

I hope now google do not do that...

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