Google and Intel have already expressed interest in the forthcoming 700MHz spectrum auction. Now, speculators say Apple may throw its hat into the ring.
The auction is creating a bit of a frenzy because the winner will obtain some of the last available prime spectrum, ideal for delivering broadband wireless Internet access. The U.S. Federal Communications Commission expects to auction it off next year.
While Google has said that it may bid in the auction, Apple’s participation is pure speculation and analysts appear split on whether it makes sense for the iPhone maker to become a network operator.
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.
Greengart and the others cautioned that they hadn’t heard directly from the company or other sources that Apple was considering the auction. “But they’re pretty good about being tight-lipped,” Greengart said. Apple is known for being very secretive, with big announcements leaking out only days in advance, if ever.
first reported on the rumor that Apple might be interested in the spectrum auction.