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AT&T Communications Network Verizon Apple

No, Apple Won't Become a Wireless Carrier (fortune.com) 33

Posted by msmash from the not-my-cup-of-tea dept.
Don Reisinger, reporting for Fortune: Apple won't be competing with its carrier partners anytime soon. Speaking at Startup Fest Europe in Amsterdam during an interview on Tuesday, Apple CEO Tim Cook squashed rumors that his company is planning to eventually get into the cellular market to compete with the likes of AT&T and Verizon. "Our expertise doesn't extend to the network," Cook said. "We've worked with AT&T in the U.S., O2 in the U.K., as well as T-Mobile and Orange, and we expanded as we learned more. But generally, the things Apple likes to do, are things we can do globally. We don't have the network skill. We'll do some things along the way with e-SIMs along the way, but in general, I like the things carriers do."
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No, Apple Won't Become a Wireless Carrier More

No, Apple Won't Become a Wireless Carrier

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  • MVNOs instead? (Score:1)

    by Anonymous Coward

    Ruling out becoming a carrier, fine. Logical. Even ruling out acquiring them. But has Cook ruled out an international collection of MVNOs? (Just as Virgin do).

    All round the world, as well as their own retail stores, Apple has Authorised Resellers. They are well-used to this sort of distributed operation. I can absolutely see them doing this.

    • I'd say it's quite likely that Apple takes the Google route (e.g. Project Fi [google.com]) and becomes an MVNO at some point, just as you suggested. After all, Apple likes to control the experience its users have, but right now their users have to interact with carriers, most of whom are rather crappy on a good day. Moreover, being able to commoditize the network by layering themselves on top of it allows them both push network costs for their users down while insulating their users from the network carriers, which is a

      • Re: (Score:2)

        by pesho ( 843750 )
        Google definitely has the right idea with Project Fi. Project Fi alone can make you buy into their android ecosystem. I have been using it for a few months. It truly shines when traveling abroad. For the first time in my life I feel like I have a real mobile device. I no longer need to swap sim cards or pay roaming (especially data roaming!). The other killer feature are the seamless wifi call integration. Helps a lot in area with poor wireless coverage (my home). It is beyond me why Apple will discard the

      • An MVNO business is low margin (relative to iPhone margins) and requires a lot of marketing to become effective. If Apple were to launch an MVNO, they would have to massively increase their marketing budget for a low margin service, while competing directly with carriers that sell their phones AND provide their wholesale network access. Keep in mind average revenue per user is declining for wireless carriers and MVNOs. Apple has no interest in investing in a declining martgin service that hurts its ability

        • But by that same logic, wouldn't you suggest that Apple should concede the virtual assistant space, the cloud storage space, the OS space, and any number of other product and service categories in which they operate, since they're also low margin operations? Mind you, I'm NOT trying to argue that logic is incorrect, nor am I trying to argue one way or the other about whether Apple should be in those spaces, but I do think they have a reasoning for being in each of them. Specifically, it seems to be that it'

    • "There must be some truth to that rumour, they've called a press conference to deny it".

  • Whether it being an ISP, Fiber, Cable, Satellite, or Wireless. They all in general are disliked by the community.
    Why?
    1. Infrastructure is expensive. A lot of the bill goes to general infrastructure whether or not you use the service or not there is an infrastructure that needs to be in place ready to operate when you are.

    2. Monthly Costs. Needing access to the network means you need to budget for it over the long term. Unlike giving a one time fee for a device you keep on paying for it. So you feel the pai

    • Good points.

      Also, I'd highlight that, in the network business, you really only get noticed when (a) you screw up, or (b) people have to pay you. Nobody gets home, fires up Netflix, and thinks "thanks Comcast, for providing me this high speed broadband connection that's allowing me to watch Netflix!"

    • > They all in general are disliked by the community.

      You are correct in stating that, but the reasons you cited are inaccurate. They are hated because

      1. They advertise "unlimited" while enforcing an undisclosed limit, fingering the top n% users as "abusing" services
      2. They cut services and raise prices
      3. They deliver crappy devices (set top boxes with miniscule hard drives, cable modem/router combo units, etc.)
      4. They want to be treated as common carriers (no liability), but want to discriminate in what

  • Apple should buy one. They are in the business for overcharging for everything. Two benefits - they get to overcharge if they are carrier (like every other one) and they can make all the bandwidth use for all apple made applications free. Look at MVNO Google-Fi. They could potentially go quad-sim in the USA. (SIMs now are apparently capable of carrying more than one network).

  • Translation: "We don't like commodity businesses. We'll do some things along the way, but in general, I like the fact that we've got a lock on the highest-margin portion of the mobile phone business, and I like the things carriers do, such as competing to see who can invest the most in expensive mobile infrastructure in order to minimize their return on invested capital."

    • I read that as "Apple won't become a wireless cancer" and that seemed legit.

    • There's something wrong with your translation, or their conclusion, as Verizon and ATT both have profits in the billions, while their infrastructure and bandwidth appear to be way behind other countries' options.

      • I'll assume from that comment that you're not an experienced stock investor. I think you confuse "profits" with the term I used of "return on invested capital." Here are links to the the financials of Apple [reuters.com], AT&T [reuters.com] and Verizon [reuters.com].

        Look at the bottom of each under the "Management Effectiveness" section. The numbers in that section and other numbers on those pages suggest that Apple, who is the most successful name-brand mobile phone producer, is earning several times as much money on each invested dollar as

  • They also said they wouldn't sell music when they stole the Apple trademark from Apple Records.

  • To own absolutely everything in the chain:

    Hardware -> operating system -> core software -> software distribution -> network

    I can see it now: iComm. Sure it costs 20% more, but it's cooler, and only works in the exclusive iPhone club. Jobs would have never missed such an opportunity.

  • I work for "a carrier", what Tim really means is that he doesn't want his entire company falling under laws that govern the telecom industry. You have a LEGAL RIGHT to privacy on any real carrier.

    This is why Google isn't actually a carrier for Fi .... It's not cause they can't do it, it's because doing so would absolutely destroy their business model since they are required by law ( in the US at least ) to not snoop on ANY COMMUNICATIONS within ANY COMPANY UNDER THAT CORP UMBRELLA. Meaning that every c

  • I'll say. They don't even sell servers any more after killing Xserve line in 2010.

  • Even limiting it to the US, they'd burn through their money mountain bribing the government just to get permission to set up towers. This is an established industry and there's no breaking into it cleanly. The government is all about maintaining (and worsening) the status quo lately. Hell, look at AT&T + DirectTV. Apple would gain precisely nothing by doing this, and they'd have to piss away an ungodly sum just to step into the ring.

    A more realistic option would be to buy T-Mobile, but Apple wouldn'

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