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Apple as Mobile Operator?Apple as Mobile Operator?

Could an MVNO follow the iPhone?

Dan Jones

December 13, 2006

2 Min Read
Apple as Mobile Operator?

If Apple Inc. (Nasdaq: AAPL) actually does launch an iPhone next year, as many expect, is a move to become a mobile virtual network operator (MVNO) the next step?

At least one financial analyst firm thinks so; UBS Research has issued a report suggesting that Apple could start an MVNO venture early next year. "We believe Apple could launch a branded wireless service in [the first quarter], purchasing wholesale network service from Cingular," writes analyst John Hodulik in the note.

"The company could launch with at least one Apple phone which combines the iPod player with GSM/UMTS phone capabilities," he continues. "We believe the company can take a small but meaningful share of the domestic wireless market in 2007."

Hodulik also believes that the computer company would most likely target high-end users with its phone, which would most likely affect Sprint Corp. (NYSE: S) in the marketplace. This conflicts with more optimistic speculation today from Strategy Analytics Inc. , which suggests that Sprint could take back market share in 2007 with new dual-mode iDEN/CDMA handsets. (See Sprint Pushes Dualmode Talk Button.)

For its part, Apple has not even officially confirmed that it is working on an own-brand cellphone, let alone an MVNO. Nonetheless, the iPhone has been a constant rumor on the wireless market for a good two years now. (See iPhone Prepares for Launch and iDon't Care.)

MVNOs have a short and checkered history in the U.S. For every Virgin Mobile USA Inc. (NYSE: VM) success story there's an ESPN-style flop.

Apple's best opportunity for MVNO success is to piggyback on the success of its iPod music player -- even if the initial ROKR/iPod device didn't exactly fly off the shelves -- and brand it as part of the Mac "lifestyle." (See CES: Wireless on Parade.)

Charging a premium for tech hipster cachet has worked for Apple in the past. What other IT company of its size has managed to persuade consumers to pay for a simple email service like .mac?

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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