December 13, 2006
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
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