Cingular music deal suggests possible Apple MVNO for ‘iPhone’

“Reports that wireless carrier Cingular will team up with Napster and Yahoo! go a long way to suggest it doesn’t plan to work with Apple on its music phone offering,” Katie Dean reports for TheStreet.com.

Dean reports, “But rather than turn up the competitive heat on Apple, the move by Cingular, which is jointly owned by AT&T and BellSouth, could turn out to be a plus for the digital music king.”

“ThinkEquity analyst Jonathan Hoopes suggests that Apple might opt with its upcoming iPhone to become a ‘mobile virtual network operator,’ which could be a better deal,” Dean reports. “MVNOs, as they’re called, don’t own their own spectrum but enter into deals with carriers to use spectrum for their own brand-named services. Virgin Mobile, for one, is an MVNO.”

“And it might make sense for Apple to forge ahead on its own, Hoopes says. ‘If Apple just makes a phone and sells it, the carrier gets the recurring revenue of songs and data,’ he says. ‘If they make the phone and deliver [it] in a MVNO, then they can potentially tap into a recurring revenue stream,'” Dean reports.

Full article here.

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22 Comments

  1. Soon we will hear how the theory of relativity was in fact invented for the iPhone. Everyone seems hell bent on twisting everything that happens lately as evidence for the existence of the mythincal iPhone.

    I say it doesnt exist.

  2. only reason i dont like the sound of that is that itll take ages for a UK release 🙁 but then i could import the phone and unlock it i suppose ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  3. I don’t see Apple doing this… no postpaid/contract MVNO has worked. Ever.

    Prepaid MVNOs like Virgin Mobile (a joint venture between the Virgin Group and Sprint Nextel) and Tracfone (which uses Cingular’s network) have done very good, but people don’t expect much with those.

    Almost every MVNO that requires a contract have either failed (remember ESPN Mobile, anyone?) or aren’t doing that good (Helio, Disney Mobile). Apple doesn’t want a failure to happen. Amp’d Mobile is a hybrid model (prepaid and postpaid services are available), and it’s doing well, but it’s a very un-Apple model.

    Personally, I expect Apple to team up with T-Mobile USA, as they plan on launching a new 3G/UMTS network next year, with most of the country covered by the end of 2007. Also, T-Mobile’s CEO has commented on how Apple is so innovative and how Leopard will change the OS world… soulds like a deal is in the works.

    MDN MW: “island”; as in “you have to be stranded on a desert island to think that an Apple MVNO would work”

  4. It may be better for Apple to go that route, because if the iPhone and it’s associated business is a success, Apple could spread the service to any of the major carriers that want it.

    FWIW, I myself, would not be interested in a phone until the song capacity matches close to my library (~2-3K songs). I already have a shuffle, nano and 3G ipod. But for others, it could be their first iPod.

  5. Good points about the MVNOs if Apple wanted to go that route. I do not think it makes much sense for Apple to do it for those reasons, but also because they do not have any other revenue streams connected to the iPhone for an Apple MVNO to make sense. Songs from iTunes? Sure, but those are already being distributed and it makes much more sense to buy via computer, then sync with phone. Portable device -> computer transfer would be a change that the RIAA would make the RIAA crap in their pants.

    I do hope Apple does a phone, because I suspect it will be quality hardware, have beautiful and functional design, and I hope it will be similar an iPod in terms of integration with iTunes – audio, photo, and addresses. Yeah, I can sync my phone now, but the ease of use if Microsoftian.

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