AppleMobile? I don't think so

There's been much speculation following the announcement of Apple's leasing plan that they'll be launching their own mobile network; that they'll become an airtime supplier or mobile service provider (MSP).

I don't think they will and here's why.

First of all Apple is a manufacturing company. Their DNA is all about products. A product, in the case of hardware, is a tangible good that delivers benefits post production. You can't use an iPhone until it's been manufactured. Obviously.

Software is also product, but in this case it's an intangible good that delivers benefits post production. You can't use an app, until it's been written. Obviously.

Apple has always (well, nearly always) controlled both the hardware and software of their products, Macs, iPhones, iPods, iPads, so that they can control the quality and deliver the best possible user experience. The original developer guidelines for writing applications for MacOS were legendary.

Apple is also about innovation. One way or another they successfully deliver products that innovate in established markets, thus creating new markets. To do this also requires innovations that we don't see, but benefit from. These hidden innovations are in the manufacturing processes and supply chains. 

By way of example, take a look at this video of Jony Ive talking about the MacBookPro’s aluminium Unibody design:

https://www.youtube.com/watch?v=s-imIrMazBc

So – that’s the Apple we all know and love. Or hate.

Their options for creating a mobile service provider (MSP) are to build, buy or partner.

On the face of it the “easiest” option would be to partner with an existing MSP and offer a virtual service, along the lines of Sainsbury's mobile. 

But here’s the thing – which one? It would need to operate globally, in all the countries in which Apple sell product. I don’t think there is such an MSP. Maybe they could partner with more than one and offer a virtually-virtual global service.

But either of these means they’d have to develop their own OSS/BSS systems which they could do, but would this be enough to offer differentiation? 

What about buying an existing MSP? Again – which one? Most service provider’s operating systems are a complete nightmare, so even if there was a suitable candidate, they’d be a huge task to develop new systems to make a significant difference to the service offering.

So what about building a network? Yes they could do this – but this would mean rolling out a global 4G network which would need to be better than another other established network in all the countries Apple offer products.

Even Apple would find this expensive.

In any case they don’t have spectrum, as far as I’m aware anyway. Different countries have different regulatory regimes and they may not be able to acquire spectrum in some countries for years, if at all.

But even if they could, they can’t control the laws of physics and have no control over the end user experience, which is something absolutely in Apple's DNA. A cellphone is a radio dressed up to look and behave like a phone and as such is subject to interference, blocking, cross-talk and all the other things that we suffer from when making that “I’m sorry can you say that again.. I’ll call you back on your landline” type of call…

But then there’s the biggest and most obvious reason why Apple won’t create their own mobile network. They’d alienate the customers they absolutely rely on – not us the general public, but the existing MSPs, their channel to market. If Apple were somehow to construct overnight a truly global 4G network that had better coverage in all countries, as it would have to be, then what service provider would sell the handset made by this competing airtime provider?

The loss of revenue from this outstandingly lucrative market while customers switched from these networks to Apple’s network, combined with the costs of the build, buy or partner options, would be unsustainable and would kill Apple.

So, don’t expect AppleMobile anytime soon.