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UBS: Apple to offer MVNO wireless

updated 05:20 pm EST, Wed December 13, 2006

Apple to offer MVNO?

Apple is planning to launch its own MVNO service by purchasing wholesale capacity from Cingular Wireless in an effort to enter the domestic wireless services market, according to UBS analyst John Hodulik. "This strategy would appear to indicate Apple's increasing desire for customer control, and potentially, store traffic," Hodulik said. "We believe if volume had been the most important variable, Apple would work with all the major vendors in the U.S. to support its new iPod phone (iPhone), enabling it to target the heart of the 225 [million] domestic wireless users." Numerous hurdles exist for the Cupertino-based company if it is planning such a move, however, from competition from low-cost family plans already offered by other carriers to distribution troubles stemming from less retail outlets than other carriers such as Verizon and Cingular, according to a report from Barron's.

"Stores are an integral part of the wireless offering, where subscribers go to fix or upgrade handsets and often to pay bills," the analyst said. "Having fewer stores will be a disadvantage." Apple may also be in for economic troubles as previous MVNO providers have experienced in the past. "While we believe Apple has been able to negotiate an attractive deal with Cingular, we do not know whether it will be attractive enough to allow it to compete for high volume users and still make money on the phone services (if that is its intention at all.)"




by MacNN Staff

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Comments

  1. climacs

    Joined: Dec 1969

    0

    you'll pay a premium

    only your iPhone will offer integration with your iTunes library. Who knows what else... but basically iPhone will sell at a premium just like iPod. And if they do it right, people will pay for it. Look at Amp'd Mobile and Boost... I doubt their customers do price shopping on calling plans.

  1. malax

    Joined: Dec 1969

    0

    false I hope

    Cingular's coverage is the worst (in my area at least). I don't care how good the phone is, if I can't get the "bars" it's not worth it.

    This whole iPhone thing is tough. I can't see Apple making much money just selling handsets, and this MVNO option sounds like a loser too. I won't be surprised to see AAPL tank immediately after the announcement whatever it turns out to be. There are just too many ways to s**** this up.

  1. astarling06

    Joined: Dec 1969

    0

    Apple don't go MVNO

    I am moderately interested in this supposed "iPhone" but if Apple goes MVNO then I'm suddenly not interested. Most of the MVNO companies in the U.S. are prepaid and are very pricey in terms of per minute charges. On the other hand, MVNO is the fastest way for them to get to the market. I think Apple should take their time and do it right. Cingular has good technology (GSM, EDGE)but has bad reception in many areas especially in Kansas. Branching out to products besides computers and iPods are good for business if they do it the right way.

  1. Stephane

    Joined: Dec 1969

    0

    Not US only

    If Apple use Cingular network, it can be especially beaucuse iPhone will use GSM and EDGE. And those are the satndards dominating the main markets which happen not to be the USA…

    Maybe Cingular sucks but by choosing GSM/Edge, Apple ensure to have handsets ready for European markets, in which several of really big players allow for unlocked phones on their networks…

  1. macnixer

    Joined: Dec 1969

    0

    Network Free is...

    ...the way to go. Like most European and Asian opeartors all you need is a SIM card and use any phone of your choice. I believe Apple should do that. If iPhone does comes out then it will have a worldwide acceptance if it is not tied to any network. The failure of ROKR was also due to the same reason. ROKR would have sold in other countries even if it did not make it in US and one of the reason was, it being tied to a single network service.

  1. mthomes

    Joined: Dec 1969

    0

    iPhone

    I don't know a lot about the phone market. It's never really interested me. I had a few different service providors over the years (AT&T, Sprint, Verison) and am currently settled on T-Mobile. Isn't AT&T now Cingular? Maybe I have that wrong. I was looking into MVNO and it doesn't seem like the road I would have thought Apple would go with, but the whole iPhone thing is still in the "RUMOR" stage anyway.

    I believe that currently a large portion of the American public views mobile phones as disposable. They seem to last about as long as you provider contract. I'm usually not one to spend a chunk of change on a cell phone. I've had a few "higher end" phones over the years and haven't found myself any more satisfied than with a cheap/free one.

    I would like to see Apple change this. I want to see a phone that isn't just another disposable piece of plastic with cell service. I don't want to keep turning in my phone for another every 1-2 years and having to get used to a whole new piece of plastic with a couple of new bells and whistles. I want a phone that will last. I want something new an innovative. I haven't seen anything new in cell phones that has ever got me excited. I hope that maybe Apple could be the one to do this.

  1. jnicholas

    Joined: Dec 1969

    0

    MVNO and services

    Could the MVNO route help Apple provide services beyond the phone easier? Carriers are notorius for over controlling phone features, perhaps the MVNO would let Apple have slick .mac mobile with slick support for email, syncing etc.

  1. macnorway2000

    Joined: Dec 1969

    0

    The clue...

    While Apple may face hurdles in competing with the larger providers, they will stand to make a more hand-in-glove service that interfaces with the existing .Mac offering. They have a controlled number of subscribers and could easily integrate your (purchased) iTunes library with the service, sync you Mac back and forth, have voicemail and SMS integrated with iChat and your .Mac email. This tight integration will make the phone experience all new, all different. Again, they have control over all steps on the way here and can put it to good use.

  1. eddd

    Joined: Dec 1969

    0

    An iPhone is a must, but

    why Cingular? I am in the process of moving away from my current carrier, which uses the Cingular network (SunCom). It is simply awful in the SouthEast. I can't think of a worse carrier... even T-Mobile is much better than Cingular.

    All the great features and function won't matter if it sucks as a phone. This could do more damage than good to Apple's brand, and I'm surprised they are moving forward with Cingular (if the rumors are true).

  1. climacs

    Joined: Dec 1969

    0

    ROKR failed

    not because it was tied to Cingular, it failed because it was an ugly phone and the iTunes functionality was minimal.

    As for the choice of Cingular for the airtime... ugh. I will not pay a premium for an iPhone if I have to go back to Cingular. I had horrible coverage and service with them. I have T-Mobile now and I am much happier. I will never go back to Cingular.

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