“Apple Chief Executive Steve Jobs has a problem: He’s taken Apple into the phone business with the iPhone. Yet he has to rely on partners such as AT&T and Starbucks to provide the wireless connections he needs to make those phones useful. For a control freak like Jobs, that’s not a pleasant situation,” Brian Caulfield reports for BusinessWeek.
MacDailyNews Note: T-Mobile supplies U.S. Starbucks with service.
Caulfield continues, “The solution: For a few billion dollars, Apple could get into the phone business itself, buying the spectrum it needs to offer not just voice service for all those iPhone users, but to build the broadband wireless links it needs to offer next generation, network-centric computing, communications and entertainment. Little wonder, then, rumors have cropped up that Jobs is eyeing a bid for a prime piece of wireless spectrum due to be auctioned off by the U.S. government this January.”
Caulfield writes, “So will he do it? Not a chance.”
Apple easily has the money, but won’t want to take on the hassles, says Caulfield in the full article here.
First! I’ll bid in their behalf!
Didn’t I cover that all yesterday?
Dave
It seems like it could be a huge move for Apple to do so. In one fell swoop they could kick the ass of the cable-satellite-cellphone industry. Sitting back watching someone else take it could leave them at a disadvantage.
Jester, if you want to do something on someone’s behalf, begin with a cease and desist on the “first” crap for your own good, please. Thank you, come again.
Just a warning. I read this and another article about iTunes and new Sanza products.
In both articles, they were written with a “Steve Jobs, perfect? I don’t think so.” attitude. I do not know where these people get the cohoneys to write about things they seem so clueless about.
I just do not know.
en
But, isn’t their contract with AT&T;for five years? Sure they could lay the ground work for a future phone system, but seeing as how TV is going all digital in February ’09, they’ll be sitting on it for a while.
I know it is now wise for Apple to do it, but part of me wishes Apple would just so we could see what Apple could do. Apple has a way to doing it better and in ways nobody else thinks of.
The easiest thing is to go into the auction with Google, and create an AppleGoo bid. Google needs the spectrum just as much as Apple, if not more so, so as to eliminate the net neutrality potential problem.
By the way the headline should be “FCC”, not “FFC”, as FFC stands for Fulham Football Club, for those who follow the Premiership.
KenC,
Yes, a joint venture with Google is exactly what I have been saying too. Perhaps they will work out a secret agreement.
Let Google buy it and pay the cost, and then do a deal with them.
Wont be as good as them buying it, but it’s better than nothing!
That Apple is considering it, I have no doubt. Why shouldn’t they, especially if their greatest advantage would be to take control of the whole end-to-end user experience of the iPhone and even more significantly, take a leadership position in the carrier space? I’m no expert but, I know good service and easy-to-use products and here Apple has excelled where others have failed. Which shows me perspective plays a crucial role for visionaries who dare to dream big.
So why not consider the wireless spectrum? Currently, the industry pundits and analysts are divided over whether Apple could succeed and those who believe Apple would be getting in way over their head are looking at this from the current carrier paradigm and we all know Apple thinks different and the CEOs of the carriers cannot see beyond their own desks.
I believe the most compelling reason for Apple to jump into the wireless spectrum with both feet would be if they get to control the entire process. Without that control they would be vulnerable much like they are right now with their AT&T;partnership. Apple delivered a remarkable product in the iPhone but it was AT&T;’s operational constraints and process shortcomings that tainted the launch and is a reflection on Apple.
This is the collision of ideals; AT&T;attempting to control the user experience using their carrier paradigm to unleash Apple’s new technology. Apple can plan in great detail to ensure things are kept simple only to have AT&T;drag on their efforts because they’re too thick to think different.
The reason the pundits say the mobile operator business is too difficult for Apple to handle is because, for the most part, the current host of carriers do it so badly but pundits believe that’s just the nature of the business. Windows users who experience less than stellar performance on their computers believe that’s just the nature of computing.
Dollars-to-donuts Steve Jobs got a good look at the carrier business during his negotiations for the iPhone, much like he did on that fateful day when he strolled through the halls of Xerox. He learned all he needed to know through observation and it doesn’t take a genius to realize where the carriers are failing. How could Apple not improve on that? If they can’t negotiate a winner-take-all strategy to acquire this wireless spectrum I would hope Steve Jobs would provide a host of reasons why it can’t be done, money being the last concern, in the hope that others might improve upon the current business model.
Unfortunately, Apple would have to bet the farm in order to win the auction and Steve Jobs is not going to settle for less because otherwise the sheer dogma would stifle any further technological advancements without help and I can count on one hand the number of times Jobs went outside of Apple for help in order to sustain his vision.
Anyone who is sick and tired of the current carrier business model and believes if anyone can change that paradigm Apple can, should be encouraging Jobs to take a long, hard look at this auction.
Apple is duty-bound to consider the feasibility of making good use of the wireless spectrum and in the short term have managed to deliver a number useful products like Airport and AppleTV, but these pale in comparison to what could be if Apple owned a chunk of the wireless spectrum. Apple could secure its future and Jobs’ legacy forever.
Go Apple!
What does FFC stand for? “Freaks For Communication”?
Okay, KenC beat me to it. But it still needs to be fixed…
G4Duakie… good thoughts… great piece!
I agree.
I for one wil not buy an iPhone simply because I have to be married to the most inept communicaitons company on the planet – worse even than Vanuatu’s meger phone company!
And when you have AT&T;sales staff actually discouraging purchases of the iPhone, you kind of wonder if S.J. is building a case to terminate the relationship – once he has all the other ducks in a row.
I live part of the year in Hawaii (lousy AT&T;service) and part of the year in Australia (No AT&T;service but TELSTRA is just as bad). Here in Oz all mobile phones (cell phones to you) must be unlockable and usable by any telco.
So, Apple has to make a great shift here… They may contract with Telstra or Optus or Virgin but the phones have ot work for everyone… you may not get all of the features BUT you have the iPhone!
Cheers – let’s hope S.J. has the cojonies to jump on this one!
mdn = piece
Thinking differently:
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Maybe Steve is taking a long hard look at this auction but with a different hat on. What if Disney bought some spectrum and Steve slipped Apple in under the radar, some shared cost arrangement, or suchlike. I haven’t noted Steve exerting much influence on Disney as yet, not surprised, Disney is a behemoth, it takes subtlety and patience. Did Steve sell Pixar to Disney like he sold Next to Apple?
MagicWord ‘high’ – well maybe
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Yay!!
Another Fulham fan
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Bring back Louis Saha…
<on topic>
While this scenario makes a crazy kind of sense, how would Apple acquire spectrum in other countries? OFCOM in the UK are due to auction off the analog TV spectrum that’s to be freed up in 2012, so maybe Apple (and Google) could possiblt make inroads here.
=:~)
“What if Disney bought some spectrum . . .”
Trade your rabbit ears in for mouse ears?
Spectrum is not everything, what about infrastructure?
We are talking billions and years to complete.
Unless someone like AT&T;will provide ready network.
“In a separate news, Apple is considering bidding on an old and unused launch pad that NASA is putting out for auction. Sources say, Apple plans to corner the iSatellite market with it’s iSatunes.”
I think the article is dead on: Apple has too much to lose and too little to gain by buying spectrum, especially since the new rules—as stated in the article—require the successful bidder to alllow other companies and devices to use the network Even if Apple successfully bids for, let’s say, about $9 billion, there are still billions of dollars in infrastructure costs, as well as corporate restructuring within Apple, and all sorts of things that can go wrong, so Apple wouldn’t necessarily have the “control” that people now think they would. What would this do to the stock price? The initial uncertainty alone would probably send the stock down sharply. Apple is currently one of the fundamentally (and technically) strongest stocks out there. This fundamental strength could well be jeapordized if Apple bought spectrum.
And If Apple were to buy spectrum, how much of their remaining resources—both people and capital—could they afford to put into their computer business? Buying spectrum and maintaining a network are VERY expensive and time consuming.
Of course it would be crazy and irresponsible for Jobs not to at least *investigate* the possibility of buying spectrum, but Apple could very well end up spending too much and actually relinquishing too much control should it proceed with the transaction.
Just my opinion.
I also doubt Apple giving serious consideration to this notion…at this time.
But…in five years, when the aggreement with AT&T;is up, things may be very, very different.
Think about it. How many iPhones might be in circulation by then? Today’s million iPhone users (and even next years potential 10 millioniPhone users) is just a fraction of the user base needed to make having some of spectrum woorthwhile.
But…(if the iPods growth is any potential indication) in 5 years, there may well be 50 to 100 million iPhone users…more than enough to make owning (or having a significant partnership in) some spectrum to be worthwhile.
A Google bid with some Apple backing would make for an interesting scenario. One that AT&T;would not be happy with…unless they were also involved.
Hmmm…
Mmmmm…AppleGoo
Come January 2008 the auction for the wireless spectrum goes to bid and once it does its gone for good.
All of the current television space that is in use now will be turned back over to the government who will in turn auction it off to the highest bidder.
There won’t be anymore in five years. So it’s now or never.
nicely done dualie, cya around?
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mw: Pwn
“Mmmmm…AppleGoo”
I like Goople better, or Agoo, Appoo