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Could Apple become its own cellular carrier?

Dan Moren | May 8, 2015
Google's heading into new territory with Project Fi. Should Apple set up an MVNO too?

And let's also keep in mind Tim Cook's favorite metric: customer satisfaction. Very few folks are enthusiastic about their wireless carriers, and on occasion that bleeds over to their phones. So I imagine it must be galling for poor Tim and Co. to hear complaints about poor service and slow speeds when the problems lie with the service, not the device. (Not to absolve Apple of problems in those areas.)

The case against
You know, I'm almost starting to talk myself into this being a great idea. But even with all of the factors in favor of Apple launching its own cell phone service, I think it unlikely, for a few reasons.

First off, as an MVNO, Apple would still have to strike deals with the companies that own the actual infrastructure--the very same ones that are currently its partners. While those companies would still rake in money from Apple, they'd have less direct access to subscribers, preventing them from upselling users on additional plans, branded content, and so on.

Google's network, in an unprecedented move, is actually based on both T-Mobile and Sprint's towers, along with support for Wi-Fi calling--the system automatically detects which is the strongest signal, and switches your phone to that. I'd imagine that an Apple MVNO would do something similar. But no matter how good T-Mobile and Sprint are, they're still the smallest of the big four networks. Without access to Verizon and AT&T's towers, Apple still loses out on a lot of reach, especially in less populated areas. And the big two are much less likely to make these deals, because they have far more to lose than the smaller players do.

Apple would also potentially then lose access to the carriers' retail locations. And while this age of Apple Stores and online shopping means that hurts less than it used to, keep in mind that there are more than 2300 Verizon stores and 2200 AT&T stores throughout the U.S., compared to 265 Apple Stores. And that doesn't even take into account all those authorized dealers, mall kiosks, and third-party locations. Granted, Apple Stores tend to have prime placement, especially for the segment of the market Apple aims at, but there are plenty of folks who aren't going to buy a phone sight unseen and can't easily reach an Apple Store.

There's also the issue of international support. In the most recent quarter, Apple posted huge growth in China and respectable improvements in the rest of the Asia-Pacific. But the iPhone's available in dozens of countries, and if Apple wanted to bring its own carrier experience to the rest of the world, it would have to renegotiate its deals in all of those countries. Which is not to say it couldn't simply stick to the U.S. and selected other countries, as it's done with services like iTunes Match, but it kind of flies in the face of that very idea of "a unified front."

 

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