Apple Eyes the Wireless Auction

APPLE EYES THE WIRELESS AUCTION
[SOURCE: BusinessWeek, AUTHOR: Peter Burrows]
Talk of the government's pending auction of valuable wireless spectrum has focused largely on one intriguing newcomer to the bidding: Google. But another tech powerhouse has considered joining the bidding as well: Apple. The company studied the implications of joining the auction, which will be held Jan. 16. The winners will get rights to use the spectrum that analog TV broadcasters are handing back to the government in 2009, given their mandated move to digital television. Apple is leaning against participating in the auction. It's not the money. With nearly $14 billion in cash, the company can clearly afford the $4.6 billion minimum bid required by the government, and could probably come up with the $9 billion that's expected to win a portion of the spectrum to be made available for a nationwide network. Rather, the risk for Apple is in entering the generally low-margin, hardscrabble world of running a massive-scale network. Rather than focus all of Apple's entrepreneurial instincts on creating the next innovative gizmo, the company would be on the hook for the massive operational headaches that go with provisioning traffic, activating new subscribers, and fielding their angry calls when service glitches occur.
http://www.businessweek.com/technology/content/sep2007/tc20070910_014733...

* Apple may bid for airwaves (Associated Press)
http://www.latimes.com/business/printedition/la-fi-apple11sep11,1,223891...

* Apple network doesn't make much sense
[SOURCE: InfoWorld, AUTHOR: Nancy Gohring]
Apple's entry into the carrier business, while interesting to speculate, is difficult to imagine since the company already has a "sweetheart deal" with AT&T, said Michael Gartenberg, an analyst with Jupiter Research. In an unusual arrangement for the mobile industry, Apple is thought to receive a portion of the monthly service revenue that AT&T earns from iPhone customers. AT&T is the iPhone's exclusive carrier. Gartner analyst Van Baker finds it "highly unlikely" that Apple would be interested in buying the spectrum. "It's a very different business than they're in, and it's not something they have a whole lot of expertise in," he noted. Apple could decide to partner with another company that has more experience in the mobile operator business, which could make more sense, Baker said. Still, the arrangement between Apple and AT&T looks beneficial to both companies, so there probably isn't a significant incentive for Apple to want to change that setup, especially because the operator business comes with "lousy margins," he said. However, Apple might have at least one good reason for wanting to operate a network, said Avi Greengart, an analyst with Current Analysis. "They do like to control the end-to-end experience," he said. While becoming a mobile operator would be a "tremendous stretch" for Apple, it wouldn't surprise Greengart if Apple was considering it. An Apple network would likely be very tightly integrated with Apple products and come with very simple pricing, he said. Such a strategy could have a ripple effect across the industry. Operators tend to watch what competitors are doing and make adjustments to their own strategies accordingly, he said.
http://www.infoworld.com/article/07/09/11/Apple-network-doesnt-make-sens...