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Why Apple should go into the mobile network business

Kirk McElhearn | Jan. 27, 2015
If Apple really wants to control the whole experience of using an iPhone, it's time to consider becoming an MVNO.

The advantage to this would be clear. Given Apple's size, the company could negotiate rates that would be highly competitive with current contracts. Apple could sell a rolling plan at a monthly fee that would allow users to get a new iPhone every year or two, as soon as the new model is released, and continue with the same plan. This could ensure more sales of new devices, and he could make it simpler for users to always have the latest model.

The biggest hurdle would be the mobile phone companies. They might be reticent to agree to such a change in their business model, but, if they were to save money on customer acquisition, it could, in the long term, be more profitable for them as well.

I was working on this article, a rumor surfaced that Google is planning to become an MVNO. Reportedly, Google will provide service through two networks, Sprint and T-Mobile, but since Google does not make smartphones--yet--they would not be providing a full end-to-end solution, which is something that Apple can do.

In the long term, this could be the best way for Apple to extend its user base and enhance customer loyalty. If Apple allowed users unlimited data for any of its services--iCloud, iTunes Match, the App Store, the iTunes Store, and whatever future music streaming service the company will be releasing--it would make it much simpler for users to take advantage of these services on their phones. It would be good for Apple, and good for Apple's users.

 

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