

How Apple dodged a bullet - BlazingFrog
http://gdgt.com/discuss/this-is-something-wrote-about-how-apple-aa3/?utm_source=gdgt+newsletter&utm_campaign=fa6184a82c-Newsletter+/+2010-10-01&utm_medium=email

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martythemaniak
I don't think Apple would've had a problem handling the PR, even it it said
"Apple" instead of "AT&T" next to the missing bars. Every geek would have
known which network backs Apple's network and word would have spread quickly
enough.

Still, not going the MVNO route was a good choice - why divert your attention
and resources so much when a carrier will let you do almost everything you
want.

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danilocampos
Apple may have dodged a bullet, but I'm not so sure the whole virtual network
business was ever in the cards. If anything, it may have been a bargaining
chip used to grease the wheels of early conversations with carriers.

Think about it. If you're a carrier, do you want to sell a bunch of high
volume, low margin commodity pipe each month to one company? Or would you
rather enjoy subscriber growth, reduce your churn, and sell a bunch of high
margin data plans? Unless I'm missing a huge piece of the puzzle, I think
carriers would rather have direct billing relationships with high value
subscribers.

So that's how you chum the water, if you're Apple and you want to get away
with murder, relative to normal manufacturer/carrier relations. Make it look
like this is going to do down no matter what, so line up now and join the fun
or watch from outside. They can do this very credibly at that point – the iPod
nano was heating up and people were noticing Apple's consumer mojo.

But would Apple really want to be an MVNO? I say not in a million years.
Consider: Apple has spent a lot of time explaining their position on vertical
integration. They like to have complete control over everything that exists
between themselves and the user experience. Whether it's _Thoughts on Flash_ ,
their position on licensing their OSes, or internal antenna testing facilities
on their campus, this is a resounding theme.

Being an MVNO completely runs counter to that. For all the control they gain
cutting the carrier out of the customer experience, Apple doesn't even control
the most essential component of the business – the wireless infrastructure.
That leaves them entirely at the mercy of the carrier for the _wireless phone
experience_ they are directly selling to the user. This isn't like the
manufacturing relationships they already have to build their stuff – if a
manufacturer doesn't work out, the worst that happens is a batch of iDevice X
doesn't reach US shores. Consumers never see the gaffe, except as buzz-worthy
" _omg they're out of stock_ " news.

The outcome they chose makes it clear who sells what, letting Apple pass the
buck when they're not involved in a shitty portion of the iPhone experience.

Apple made the right move, but culturally, I don't think they'd have played it
any other way.

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jdavid
this author misses the point completely.

if apple would have gone the MVNO route, the iPhone would be multiband, and
have tethering. it probably could have connected to either sprints/verizon
tech, or to ATT's network.

it could have been the phone with the best connection. apple could have also
made deals with people to route calls through wifi, 3 years ago.

think of how much time apple has lost to ATT being slow.

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protomyth
Wasn't Sprint the bigger player in the MVNO market?

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danilocampos
Using Sprint would have been a lot of trouble for Apple, though. They'd have
had to manufacture two iPhone variations – one that works with Sprint's CDMA
network, and one that used GSM for every other market in the world. Not that
this is impossible, especially if the tradeoffs are right, but it's probably
much easier to only have to worry about one type of cell phone chipset.

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gojomo
Nowadays, Apple could buy Sprint (market cap: $14B) with their cash-on-hand
(over $25B).

If they wind up making CDMA iPhones anyway...

