Sprint’s shares were up yesterday (well, so were a lot of shares) on reports that it would be offering the iPhone 5, and there were also rumors that analysis of app logs for that phone showed it was compatible with both GSM and CDMA networks. I wonder now if that’s a further indication that Apple has been planning to make itself into an MVNO.
The wider you spread yourself as a phone player, the more customers you have access to but the less leverage you have with the big wireless operators. Most handset players, like Apple, have limited their early launch to a single provider in each service area to get the most support, marketing, and subsidies. With the iPhone long past the early-launch phase, it’s not surprising it would be widening its base, but we need to think like Jobs here.
Apple loves to eat all the Apples and not just the low ones; they like to control the ecosystem they create and to fully monetize it. So how does that square with their letting customers pay a hundred bucks a month to get their iPhone or iPad connected to the cellular network, payment they don’t get? That alone would make Apple consider becoming an MVNO.
I think that the Google/Motorola deal is either a further driver for Apple or an indicator that Apple’s intentions are being guessed by Google. Google, you’ll recall, has actually threatened to bid for spectrum, and while there was never any chance that it would go through with that (at least not any time soon), there is a very good chance that Google realizes it could gain much of the benefits of owning its own cellular wireless business without the cost of licenses and infrastructure.
I wonder how many iPhone owners don’t even know who their cellular provider is, or would know only because they recognized the name from a bill or from the logo on a store where they bought the phone? Brand loyalty in cellular isn’t with the operator as much as with the appliance, particularly if we’re talking about an Apple appliance. Can Google afford to take any less aggressive a position in its own marketing? Even without previous cellular aspirations to point to, would Google now have to think about MVNO status? I think so.
The MVNO road isn’t always an easy one, of course, and it increases costs (primarily marketing) as well as revenues. Apple and Google wouldn’t get all the money, either; they’d get what is essentially the retail spread (perhaps 25%) of the costs. But they’d be in control, and I think that counts a lot for both companies.
