If Apple’s Rumors Were True…

Most find existing cell service carriers scheming and infuriating. One solution for this problem would be to buy your cell phone plan from the same company that makes your iPhone. Imagine just walking into your local Apple store and buying your phone and it’s service all in one stop. Never again would you have to practically beg customer service representatives from traditional telecom companies to solve your problem or get you in touch with someone who could.

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This isn’t the first time that there have been rumors of an Apple-branded cell phone plan. However, Apple continues to deny the speculation. But, what would happen if Apple decided to go forward with offering cell service?

Carriers like Verizon and AT&T are trying to acquire as much digital content as they can to charge their customers to stream over their cellular network. They have to do this because it is much less profitable to only provide access to basic data. The hot commodity is now connectivity. The only way to avoid the problem is for traditional telecom companies to purchase content warehouses such as DirecTV and AOL, then monetize.

If Apple would provide a strong cell service of its own, they would have to do a few things. First, build a telecom infrastructure to carry calls or be a mobile virtual network operator (MVNO) by leasing it wholesale. This would mean that big investments would have to be made into an industry with shrinking margins. Even setting up routed calls over free WiFi connections would not be original and not suitable coming from Apple.

In order to turn a profit, Apple would need to offer digital content such as TV shows, music and movies. Apple could make their anticipated streaming video app, Apple TV, available to consumers over a cellular connection. However, once again, this would not be original in the industry, therefore, not Apple. In the case, the company would also need to pay huge sums to build cell towers of its own or pay rivals like Sprint, T-Mobile and Verizon to use their networks.

Let’s compare Apple with Google for a minute. Google has already entered the industry with its broadband service, Google Fiber and its cell service with Project Fi. Google makes a profit off of user data instead of service subscriptions, so it has the power to take money-losing positions. So, when the other carriers are bullied into lower rates because of Google, more people use the Internet, giving Google more power.

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Apple isn’t a data company like Google and doesn’t have great performance in cloud-based products. Apple sells hardware, but that doesn’t mean it can’t enter other businesses. However, Apple is more likely to enter into better expanding industries such as automotives.

Even though launching cell service could prove that it is an innovator, disrupting the wireless industry in a revolutionary way would take a lot of effort. Apple should focus on doing what they’re good at, building new machines.

 

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