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I like it though (despite it being "amateurish speculation"). Allow me to add my own. I would love to see them purchase a carrier though. Imagine it. How much

by wh-uws 14y ago

I like it though (despite it being "amateurish speculation"). Allow me to add my own. I would love to see them purchase a carrier though. Imagine it. How much better would things get if Apple owned the towers and spectrum too. They've got more hardware and software talent in units as small as 5 or 10 then some of those companies have in their entire workforce. And for all the ridiculousness they've put us all through over the years I would love to seen them squirm as they try to figure out how they are going to compete with Apple.

tptacek 14y ago
The thing people don't seem to get about buying a carrier is that you can't just add "Wireless Carrier" to your inventory, dual-wield it, and collect the stats boost. Carriers are capital-intensive, operations-intensive, customer service-intensive businesses. You have to run them effectively, as a carrier, at huge expense, or they degrade. Apple has no competence in running wireless carriers. Tens of billions of dollars will buy a lot of competence, but not instantaneously. Given the stakes, I imagine "operating a wireless carrier" is not one of those things you want to learn how to do as you go. I'm also amused by the sentiment on HN (and the Internet at large) that 2012 wireless carriers are really just a cartel organized to collude on providing bad customer service and exorbitant rate structures. As if no carrier figured out that executing better service and value would improve their competitive position; no, the only reason wireless carriers suck is that they choose to suck!
- DanBC 14y ago
  > [...] wireless carriers are really just a cartel organized to collude on providing bad customer service and exorbitant rate structures. To be fair, when an industry colludes to price-fix broken spectrum auctions and makes money by confusing the customers they're not going to be praised for good customer service.
- chc 14y ago
  I remember back in 2006 when everybody thought the phone manufacturers were doing the best they could as well. The CEO of Palm famously responded to rumors of the iPhone: > Responding to questions from New York Times correspondent John Markoff at a Churchill Club breakfast gathering Thursday morning, Colligan laughed off the idea that any company — including the wildly popular Apple Computer — could easily win customers in the finicky smart-phone sector. > *“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.” Turns out they really were just sitting on their laurels, and Apple really could walk in and eat their lunch. Not disputing that running a carrier is a PITA. Just that the carrier market today really is competent and providing roughly the best value it can.
  - bonzoesc 14y ago
    > Turns out they really were just sitting on their laurels, and Apple really could walk in and eat their lunch. Not really, Apple had been struggling for a few years to learn how to make a decent phone too, they just didn't release the ones that kind of sucked. AT&T (in its previous incarnations as Cingular, SBC, BellSouth, and AT&T) has spent the last twelve years trying to make a functional cell carrier, and it takes them over 70,000 employees to do so. I suspect that Apple's 60,000 employees aren't focused on carrier operations.
- phaus 14y ago
  It's not that they haven't figured it out yet, it's that they just don't care. It's a captive market, right now consumers can choose whichever carrier they want, but the exorbitant prices and poor service will remain the same wherever you go. Furthermore, executives at the two most successful carriers have openly stated that they are looking for ways in which they can trick their customers into sticking around as they jack up the prices for the same service we are already getting. Tiered data and text messaging are perfect examples of this. Data costs carriers way less than a dollar per GB to provide, yet this amount costs the customer around $10. Text messaging is even worse, because it costs almost nothing for the carrier to provide it, but it costs customers $10-30 each month.
  - tptacek 14y ago
    I agree with you that ultimately the reason Apple won't buy a carrier is that Apple occupied a much more favorable spot on the value chain than the carriers. I'm unlike virtually everyone else on HN in not being alarmed by the pricing of text messages. Prices have nothing to do with costs. Text message pricing is a way of segmenting customers by behavior and price sensitivity, nothing more.
    - wh-uws 14y ago
      > Text message pricing is a way of segmenting customers by behavior and price sensitivity, nothing more. Go on.. (by that i mean can you explain your view of this. it sounds interesting and I don't understand)
      - bonzoesc 14y ago
        "Everything is worth what its purchaser will pay for it." -Publilius Syrus It's textbook price discrimination[1]. If somebody's not willing to pay much for texting, they can pay nothing and ask that it be disabled. If somebody cares very little about it, they can pay 20¢ per message[2]. If they know they'll text lots or just want to pay a flat fee and not care, they can pay $20/month[2]. The 20¢ per message is because if you're a light texter, that's about the most you're willing to pay per message. The cost of something only sets a bottom floor on a price; it's not immoral or unethical to maximize profit by setting a sale price with a large margin. 1: http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination 2: http://www.wireless.att.com/cell-phone-service/cell-phone-plan-details/?q_sku=sku3830290&q_planCategory=cat1370011 http://www.wireless.att.com/cell-phone-service/cell-phone-pl...
- philwelch 14y ago
  > Carriers are capital-intensive, operations-intensive, customer service-intensive businesses. Apple has more capital than they know what to do with, world-class operations chops, and a huge retail operation focused on great customer service. That doesn't mean they can operate a carrier. Another major obstacle is that it would be insanely expensive to just buy a major carrier like Verizon and then only support iPhones on it. You'd have tons of underutilized network infrastructure, and you'd have to support third-party phones. You could keep operating it as a general carrier and sell other phones, but why would Apple do that? There's also the possibility of operating an MVNO, but then you can't control the quality of the underlying network. I'm sure the idea has been discussed at Apple and they've come to similar conclusions.
  - drumdance 14y ago
    Alternatively, they could use that unused capacity to deliver content to Apple TV, the iPad etc. (Totally spitballing here. I have no idea whether that's feasible.)
wlesieutre 14y ago
The other problem with owning a carrier is that they'd lose their reputation for perfect performance. If someone's iPhone isn't working, >90% of the time they'll blame it on AT&T/Verizon/T-Mobile/etc. If Apple owned a carrier, the network problems would be on them.
- philwelch 14y ago
  It seems more likely that the mentality would be closer to "let's control everything so we can make sure we provide the best experience" than "let's let someone else run the network so no one blames us when the network is down".
  - mbreese 14y ago
    Providing the best experience on a controlled hardware/software system is vastly easier than doing the same thing in the physical world. I'm not doubting that they could do it, but dealing with radio towers, coverage, regulations, interference, etc... isn't going to be easy to do right. It's hard to make everyone happy, so it's probably better for Apple to let the carriers fight over coverage than to try to compete head-on. For example, Apple the carrier might find that a city isn't profitable to cover, so they avoid it. However, a regional carrier might find it to be. So if Apple had their own carrier, they lose out on any customers there. But, if they allowed that regional carrier to sell the iPhone, then they can keep the customer. I don't think it has anything to do with having a scapegoat for poor performance, or lack of ability to run a carrier. I just don't think it is in their interest to start one. Because, let's face it, this is Apple... They wouldn't be satisfied with running a #3 or #4 carrier, they would want to do it right - and be everywhere. And that is very expensive.
ronaldj 14y ago
I don't think carries actually own the towers. They rent them from companies like American Tower Corp I believe.
jakejake 14y ago
Well, everybody seems to hate their carrier to some degree. Apple gets to utilize the service without being blamed for the problems. And even if they did own a carrier they'd still have to deal with others as people roam off of their network, so they still wouldn't be in complete control. I could see Apple buying a carrier purely for investment reasons though, but they could do that with any business they choose.

by wh-uws 14y ago

tptacek 14y ago

The thing people don't seem to get about buying a carrier is that you can't just add "Wireless Carrier" to your inventory, dual-wield it, and collect the stats boost. Carriers are capital-intensive, operations-intensive, customer service-intensive businesses. You have to run them effectively, as a carrier, at huge expense, or they degrade. Apple has no competence in running wireless carriers. Tens of billions of dollars will buy a lot of competence, but not instantaneously. Given the stakes, I imagine "operating a wireless carrier" is not one of those things you want to learn how to do as you go. I'm also amused by the sentiment on HN (and the Internet at large) that 2012 wireless carriers are really just a cartel organized to collude on providing bad customer service and exorbitant rate structures. As if no carrier figured out that executing better service and value would improve their competitive position; no, the only reason wireless carriers suck is that they choose to suck!

DanBC 14y ago
> [...] wireless carriers are really just a cartel organized to collude on providing bad customer service and exorbitant rate structures. To be fair, when an industry colludes to price-fix broken spectrum auctions and makes money by confusing the customers they're not going to be praised for good customer service.
chc 14y ago
I remember back in 2006 when everybody thought the phone manufacturers were doing the best they could as well. The CEO of Palm famously responded to rumors of the iPhone: > Responding to questions from New York Times correspondent John Markoff at a Churchill Club breakfast gathering Thursday morning, Colligan laughed off the idea that any company — including the wildly popular Apple Computer — could easily win customers in the finicky smart-phone sector. > *“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.” Turns out they really were just sitting on their laurels, and Apple really could walk in and eat their lunch. Not disputing that running a carrier is a PITA. Just that the carrier market today really is competent and providing roughly the best value it can.
- bonzoesc 14y ago
  > Turns out they really were just sitting on their laurels, and Apple really could walk in and eat their lunch. Not really, Apple had been struggling for a few years to learn how to make a decent phone too, they just didn't release the ones that kind of sucked. AT&T (in its previous incarnations as Cingular, SBC, BellSouth, and AT&T) has spent the last twelve years trying to make a functional cell carrier, and it takes them over 70,000 employees to do so. I suspect that Apple's 60,000 employees aren't focused on carrier operations.
phaus 14y ago
It's not that they haven't figured it out yet, it's that they just don't care. It's a captive market, right now consumers can choose whichever carrier they want, but the exorbitant prices and poor service will remain the same wherever you go. Furthermore, executives at the two most successful carriers have openly stated that they are looking for ways in which they can trick their customers into sticking around as they jack up the prices for the same service we are already getting. Tiered data and text messaging are perfect examples of this. Data costs carriers way less than a dollar per GB to provide, yet this amount costs the customer around $10. Text messaging is even worse, because it costs almost nothing for the carrier to provide it, but it costs customers $10-30 each month.
- tptacek 14y ago
  I agree with you that ultimately the reason Apple won't buy a carrier is that Apple occupied a much more favorable spot on the value chain than the carriers. I'm unlike virtually everyone else on HN in not being alarmed by the pricing of text messages. Prices have nothing to do with costs. Text message pricing is a way of segmenting customers by behavior and price sensitivity, nothing more.
  - wh-uws 14y ago
    > Text message pricing is a way of segmenting customers by behavior and price sensitivity, nothing more. Go on.. (by that i mean can you explain your view of this. it sounds interesting and I don't understand)
    - bonzoesc 14y ago
      "Everything is worth what its purchaser will pay for it." -Publilius Syrus It's textbook price discrimination[1]. If somebody's not willing to pay much for texting, they can pay nothing and ask that it be disabled. If somebody cares very little about it, they can pay 20¢ per message[2]. If they know they'll text lots or just want to pay a flat fee and not care, they can pay $20/month[2]. The 20¢ per message is because if you're a light texter, that's about the most you're willing to pay per message. The cost of something only sets a bottom floor on a price; it's not immoral or unethical to maximize profit by setting a sale price with a large margin. 1: http://en.wikipedia.org/wiki/Price_discrimination http://en.wikipedia.org/wiki/Price_discrimination 2: http://www.wireless.att.com/cell-phone-service/cell-phone-plan-details/?q_sku=sku3830290&q_planCategory=cat1370011 http://www.wireless.att.com/cell-phone-service/cell-phone-pl...
philwelch 14y ago
> Carriers are capital-intensive, operations-intensive, customer service-intensive businesses. Apple has more capital than they know what to do with, world-class operations chops, and a huge retail operation focused on great customer service. That doesn't mean they can operate a carrier. Another major obstacle is that it would be insanely expensive to just buy a major carrier like Verizon and then only support iPhones on it. You'd have tons of underutilized network infrastructure, and you'd have to support third-party phones. You could keep operating it as a general carrier and sell other phones, but why would Apple do that? There's also the possibility of operating an MVNO, but then you can't control the quality of the underlying network. I'm sure the idea has been discussed at Apple and they've come to similar conclusions.
- drumdance 14y ago
  Alternatively, they could use that unused capacity to deliver content to Apple TV, the iPad etc. (Totally spitballing here. I have no idea whether that's feasible.)

wlesieutre 14y ago

The other problem with owning a carrier is that they'd lose their reputation for perfect performance. If someone's iPhone isn't working, >90% of the time they'll blame it on AT&T/Verizon/T-Mobile/etc. If Apple owned a carrier, the network problems would be on them.

philwelch 14y ago
It seems more likely that the mentality would be closer to "let's control everything so we can make sure we provide the best experience" than "let's let someone else run the network so no one blames us when the network is down".
- mbreese 14y ago
  Providing the best experience on a controlled hardware/software system is vastly easier than doing the same thing in the physical world. I'm not doubting that they could do it, but dealing with radio towers, coverage, regulations, interference, etc... isn't going to be easy to do right. It's hard to make everyone happy, so it's probably better for Apple to let the carriers fight over coverage than to try to compete head-on. For example, Apple the carrier might find that a city isn't profitable to cover, so they avoid it. However, a regional carrier might find it to be. So if Apple had their own carrier, they lose out on any customers there. But, if they allowed that regional carrier to sell the iPhone, then they can keep the customer. I don't think it has anything to do with having a scapegoat for poor performance, or lack of ability to run a carrier. I just don't think it is in their interest to start one. Because, let's face it, this is Apple... They wouldn't be satisfied with running a #3 or #4 carrier, they would want to do it right - and be everywhere. And that is very expensive.

ronaldj 14y ago

I don't think carries actually own the towers. They rent them from companies like American Tower Corp I believe.

jakejake 14y ago

Well, everybody seems to hate their carrier to some degree. Apple gets to utilize the service without being blamed for the problems. And even if they did own a carrier they'd still have to deal with others as people roam off of their network, so they still wouldn't be in complete control. I could see Apple buying a carrier purely for investment reasons though, but they could do that with any business they choose.