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Apple to Launch a Cell Phone Network?
Thursday, July 7th, 2005 at 3:00 PM - by Brad Cook
Forbes writer David Ewalt on Friday published an article that posits an interesting idea: "[Apple CEO Steve Jobs] might be planning a move that will leave even his biggest fans surprised -- becoming a phone company." Citing Disney's plans to launch a wireless phone network next year, along with the existence of ESPN's own service, which debuted last December, Mr. Ewalt thinks Apple could easily follow in those companies' footsteps.
The key is becoming a "mobile virtual network operator," or MVNO, which is what ESPN did and what its parent company, Disney, will do in 2006. Internet service provider Earthlink is playing the game too, and Mr. Ewalt cites analyst speculation that companies as diverse as Nike and Wal-Mart could do the same thing. For Apple, he thinks the creation of a wireless business could be easy, "since it already specializes in making cool, user-friendly handheld gadgets, and has sold over 15 million iPod music players to date."
The catalyst for Apple could be its upcoming iTunes phone, which many analysts have pointed out doesn't thrill cellular carriers since they want to sell music directly to their subscribers, not provide phones that will enable them to listen to tunes purchased elsewhere. So if Apple launches its own MVNO, as Mr. Ewalt points out, it could do "an end run around carriers and provide the company with revenue from both cell phone handsets and from the resale of cellular service." With the MVNO tied to the iTunes Music Store, Apple could tap into the cell phone market, which is currently much larger than the MP3 player market.
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