Apple to Play Service Provider to Rumored iPhone
Dec 13th 2006Nik AgarwalMy View
The Apple “iPhone” has been a huge fan favorite in the rumor mills for quite some time. The reason why I put the word iPhone in quotation marks is because Apple still has not confirmed the product nor has it confirmed the name of the product. There are numerous speculations about how the iPhone will be made available to consumers. This Bloomberg article talks about how some analysts are predicting that Apple will act as the service provider for their iPhone. This will mostly likely result in the iPhone being a GSM phone. Companies like Virgin Mobile and Helio are MVNO’s and Apple would act as the same way. MVNO’s purchase airtime from service providers who own the physical network and have spare bandwidth. They then repackage and rebrand the service and sell it back to consumers for competitive rates.
Analysts are also predicting that Apple will become an MVNO by purchasing “minutes” from Cingular. This makes complete sense as Cingular and Apple also have a great relationship in terms of introducing iTunes powered phones (e.g. Motorola Rokr). As expected, Apple will mostly likely rely on its website and its retail stores to offer the iPhone. The article also mentions that the iPhone will most likely have 4GB - 8GB memory and will sell for approximately $300. I am assuming that the price tag will no doubt include you to sign a 2 year contract with the support of, as Cingular claims, “the network with fewest dropped calls.”
I am expecting an iPhone from Apple, however, I do not anticipate it being the hottest phone on the market. A phone must also be capable of great reception and call quality. In my opinion, Apple is relatively inexperienced in phones and will have a tough time competing with the portfolios of Nokia, Motorola, and Sony Ericsson.� In addition, I think Apple is thinking to ride the iPod’s success to generate large volume sales of the iPhone.� However, as much as the iPhone sounds tempting, if it doesn’t make great calls, there really is no point to buying it, is there?
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