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Apple Mobile: How Apple will become a mobile carrier

Thursday, May 3, 2012 · 10:01 am · 20 Comments

“What’s next for Apple? Apple will provide wireless service directly to its iPad and iPhone customers,” Whitey Bluestein writes for GigaOM.

“First, Apple will sell data packages bundled with iPads. Then it will sell data and international roaming plans to iPhone customers through the iTunes Store,” Bluestein writes. “And in time — sooner than many think — Apple will strike wholesale deals with several mobile operators so that Apple can provide wireless service directly to its customers, as Apple Mobile.”

Bluestein writes, “Apple has all of the pieces necessary to offer wireless service directly to customers. They have the world’s leading brand, a loyal following who will pay a premium for Apple’s products and services, and 363 retail stores around the world, growing to 400 by the end of the year. And with iTunes, it has the digital content and billing platform to offer service with one-click simplicity. The infrastructure is in place today, with the patented architecture ready for Apple’s next big move.”

Read more in the full article here.

[Thanks to MacDailyNews Reader "Dan K." for the heads up.]

Categories: News

Tags: Apple Inc., Apple Mobile, carriers, data service, iPad, iphone, itunes store, MVNO, wireless data

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Comment Feed

20 Comments

disposableidentity

Thursday, May 3, 2012 - 10:23 am · Reply

Would love it (as a shareholder and as a customer).

Apple can negotiate a better deal than we all can individually. I’m pretty indifferent to my provider, and (of course) am thrilled with Apple.
Nerd Beautiful

Thursday, May 3, 2012 - 10:26 am · Reply

Correct, but “willing to pay a premium” is a talking point of 5+ years ago, not today. These days you pay Apple the same or less as you would for a competing product and get an experience that is exponentially better.
tomL

Thursday, May 3, 2012 - 10:32 am · Reply

Now that iPhones and iPads can work with any caarrier, it makes sense for Apple to broker that service with the carriers, allowing the device to use whichever carrier offers the best service or price at the moment. I like it. Kind of like Priceline.
IPerk

Thursday, May 3, 2012 - 10:33 am · Reply

Sign me up.
Greg M

Thursday, May 3, 2012 - 10:34 am · Reply

Apple using other providers systems isn’t going to improve anything or help to lower prices. In the US we already pay some of the highest rates in the world with some of the worst service.

I have zero interest in paying a premium for wireless service.
- Nerd Beautiful
  
  Thursday, May 3, 2012 - 10:43 am · Reply
  
  But if they buy millions of minutes or GB’s or whatever, they can probably get a discount. Then they create the plans they want – plans that don’t manipulate and gouge; plans that don’t undercut essential functionality. Those would be good things.
  
  Consider also that they could bundle some service with the products. If they make profit on the hardware sale they can afford to make less or no profit on the data plan… consider iTunes, which for a very long time (maybe still?) was a break-even endeavor.
  
  It’s entirely possible that Apple as a mobile carrier would mean lower prices, more consistency and better service.
  
  Now consider how many people would like to buy an iPhone every year but don’t because of 2 year contracts. What if your contract allowed you to buy every year or was even set up to encourage it?
  
  You see… this could be a very good thing, if they’re willing to take on the extra work.
  - Greg M
    
    Thursday, May 3, 2012 - 3:34 pm · Reply
    
    What you’re saying sounds great and I’d love for it to happen. However, Apple isn’t about making things less expensive, they’re about maximizing margins. With Apple nothing is ever enough. They hide their greed by making fantastic products and then convincing us that we can’t do without them.
    
    Don’t get me wrong, I love my Apple products but at the same time let’s not kid ourselves, Apple is all about trying to separate us from as much of our money as they can while getting us to say thank you at the same time.
    - Manbearpig
      
      Thursday, May 3, 2012 - 5:17 pm · Reply
      
      Almost. Apple is maximizing profits. They give some things away (iCloud for instance). They are not maximizing margins on everything. Sometimes lowering prices increases profits.
      - Greg M
        
        Thursday, May 3, 2012 - 7:29 pm · Reply
        
        Apple isn’t “giving” iCloud away. They’re using it as a way to get people more entrenched into all things Apple. It will be (is being) used to squeeze out competition and that will ultimately cost us.
noodlesnoodlemann

Thursday, May 3, 2012 - 10:38 am · Reply

As we don’t know any details, kind of silly to speculate, isn’t it? If it’s a good deal, people will sign up. If it is at a premium, without any premium features, they may not. Saying one will or won’t sign up, without any facts, is beyond foolish at this point.
BoC

Thursday, May 3, 2012 - 10:46 am · Reply

Maybe…

A recent trial of another longer range wireless for 802.22 WiFi may actually be a revolution in the making for a new form of ISP to emerge that is NOT tied to existing cell towers.

Technology is being pushed in all sorts of ways. That might mean that an 802.22 WiFi source is tied to the larger ISP’s optical network by micro point to point microwave dishes.

If it occurs it will be good for consumers and force cell tower operators to be more competitive.
chefstephen

Thursday, May 3, 2012 - 10:51 am · Reply

I don’t see this happening enlarge scale.

The carriers might be happy to sell wholesale but I don’t think Apple wants the problems carriers have. While ATT, Verizon etc. would be the actual carriers, people would think their carrier is Apple. Carriers have low satisfaction rates for a reason and putting the Apple name on it isn’t going to make connections and speed any better. This would harm the Apple name so unless Apple can get it’s own bandwidth and created a better experience I don’t believe they would do this.

Second if you leave the carriers they will not have any interest in offering your product; in fact you are now a threat. Apple would certainly attract some of it’s loyal fans but unless the actual mobile service is better most people will still go you the carriers to shop for a phone and if you are now their competition that is a problem.

What I can see is some sort of a world phone. A phone that can use any iPhone compatible network available, at any time, so it can always use the best one. So you could switch from AT&T to Verizon to O2, Vodaphone etc. seamlessly. Likely you buy this phone from Apple unsubsidized and then pay a comparable data rate to the other carriers. You would not pay extra for roaming anywhere Apple has their agreements.

This way you are not taking away the carrier’s bread and butter and they likely make more money. They still get the regular iPhone sales and contracts and they make some extra from Apple by being part of their network. While not huge in % this is a market that has a need. Carriers charge ridiculous fees when traveling and have little incentive to make it work better. Domestically all the carriers have weak signal areas. In many areas one carrier is dominant because they built out their network first and it wasn’t worth another carrier spending the money to compete. Offering phones that could do this roaming would hurt the carriers very little; in fact it could actually help them by taking some of their critics away.

It would be a limited market that could possibly expand but it could be profitable as long as you don’t make an enemy of the carriers initially.
Marty

Thursday, May 3, 2012 - 10:51 am · Reply

The only thing that makes me doubt this is the fact that 99% of people hate their wireless provider… No matter who it is, or what deal they signed.

Apple has always managed to avoid being viewed as the enemy, but you’ll notice that no carrier has.

It’s possible Apple could do it and offer it cheap/simple to sell more hardware (like everything else iTunes related).

Apple isn’t known for putting their name on other company’s services though.
quiviran

Thursday, May 3, 2012 - 10:51 am · Reply

The difference will be attitude. Apple will be out to provide a great customer experience and a good value. The carriers (at least in the US where they have no government oversight) are just out to empty our wallets with as little real effort as possible. I see lower costs. less abusive data plans and faster speeds. Hurry, Apple, please hurry.
alanaudio

Thursday, May 3, 2012 - 10:54 am · Reply

The key question for me is that if Apple is planning to ride on the backs of existing service providers, how do Apple persuade those providers to take part ?

US service providers are ripping off their customers on a colossal scale and it’s hard to see how they could be persuaded not to. That’s why I feel that Apple might have to work around them rather than work with them.

In the UK, my iPhone is unlocked and I get a SIM only deal from my service provider, Giffgaff, who provide me with 250 mins, unlimited data and unlimited texts. I pay 10 GB Pounds per month inc 20% sales tax which equates to about US $16. They offer data only deals for iPads too. 500mB is £5, 1GB is £7.50 or 3GB for $12.50 per month.

Are there comparative deals in the US ?

If Apple can offer a truly international service and get rid of international data roaming charges, then I would be very interested indeed.

I very much hope that Apple do find a way to offer such a service as it would do a lot to preserve the quality of the user experience. The internet connection is crucial to most Apple products and at the moment, it’s the weakest link.
- fricfrac
  
  Thursday, May 3, 2012 - 1:13 pm · Reply
  
  Good info
Dave

Thursday, May 3, 2012 - 11:29 am · Reply

Who will subsidize the purchase of the phone?
cococanuck

Thursday, May 3, 2012 - 11:58 am · Reply

This is all well and good for US users. Apple sells more product overseas. I wonder what they will do in other countries?
- fricfrac
  
  Thursday, May 3, 2012 - 1:11 pm · Reply
  
  Just a thought, but what else can they do with all the profits accruing offshore. It’s looking unlikely that the US administration will grant them tax exemptions to bring all the money home, sooo…use it to enhance the customers experience with their local carriers. This would work here in the EU where the networks are not so tied down and PAYG is common. Not sure about deregulation in other regions but I would sure go for a service that used the profits generated in my home country…after all it’s our generated profit and should stay where it came from.
  Wishful thinking I know, but the positive feedback would be immense.
MacHouse

Thursday, May 3, 2012 - 3:11 pm · Reply

Wishful perhaps but not unfathomable. I travel all over the US. I’d love to have a plan that allowed my devices (iPhone & iPad) connect to whichever carrier has the best coverage in my location. Think of how much simpler the SKU’s would be for Apple. Build just one LTE iPad, one LTE iPhone. I have no loyalty to the wireless carriers.