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Apple Eying Open Wireless Spectrum Battle

According to multiple Business Week sources, Apple has been considering the merits of bidding on the 700Mhz open wireless spectrum that goes up for grabs this January. Expected to sell for around $9 billion, most say Apple has the liquidity to make the purchase—even among competition like Google.

What would the deal mean for Apple fans? Think iTunes content that hits your iPhone/iPod/iMysteryDevice in data rates faster than Wi-Fi. And of course, think voice transmission without relying upon the AT&Ts of the world.

But the purchase would mandate a lot of infrastructure and busy work. Presumably Apple would farm out logistics to another firm, but still...it's a commitment that brings you directly into the wireless service world, which is full of headaches and federal regulation.

And who says $9 billion will take this spectrum? How the hell do we know how much cash is needed when some of the richest, most leveraged technology companies in the world are duking it out for US data dominance?

So who do you want to take the spectrum? [businessweek]


9:38 AM on Mon Sep 10 2007
By Mark Wilson
7,120 views
38 comments

Comments

  • Image of Geisrud Geisrud at 09:47 AM on 09/10/07 *

    So who do you want to take the spectrum?
    Me.

    And then I'll farm it out to 3rd party contractors for one million dollars!!!

  • I don't care as long as its not apple. Don't get me wrong, ipods are cool and all but apple changes you for EVERYTHING, I would rather have open access then pay for it. Whoever buys the spectrum better make at least a portion of it free!

  • Haha though I love Apple at a personal level, I would prefer that they not have spectrum. Let someone like Google have it, and then they can license it out to companies like Apple and Microsoft for next year's wündergadgets.

  • Great another spectrum available for a company to build infrastructure to overlay the country with. Will this mean another non-technologically compatible cell phone service? Or a chance to put wi-fi out of business just when it is on the verge of becoming ubiquitous? Maybe this is a great spectrum for data transfer, I certainly don't know the technology, but what I'd really like is for companies to get right the implementation of the spectrums they already have available to them. Like AT&T opening up some real 3G access and allowing that technology to be put into phones that people buy. Or Verizon dropping it's crazy prices. These would help make my life better and cheaper.

    That said, I'd like to see Apple take a shot at this. Apple stuff costs extra, but they work better and I'm willing to pay an "Apple tax" every year to have my stuff work well together.

  • I think Apple and Google should form a partnership to buy the spectrum. Combined they would be able to afford it without breaking the bank.

  • MYNAMEISJOE: Perhaps you don't quite understand what an auction is for. The FCC auctions off the spectrum so that the company with the highest anticipated value for the spectrum can bid the highest and win the auction. This is what economists call an "efficient outcome".

    Giving shit to you for free is in no way efficient for anyone, except for you.

  • i want sprint to win it. they have expertise in wireless data, and the have a history of wholesaling the usage of their network to other companies.

  • 20 MHz of spectrum available to auction nation-wide. This is NOT enough spectrum for a wireless data business case, regardless of the technology used (unless you believe all spec sheets). The action will be at 2.5 GHz where there is nearly 200 MHz available, and mostly held by Sprint and Clearwire.

  • Expected to sell for around $9 billion, most say Apple has the liquidity to make the purchase-even amongst competition like Google.

    Really??? REALLY??????
    I don't see how Apple, which is just a mid-range tech company, could ever hope to compete
    with the larger companies especially if some of the giants like GE gets involved.




  • @baltwade:

    Doesn't Apple have something like $14 billion in cash reserves stowed away for a rainy day?

  • It's going to be really interesting come January 2008.

    Remember 9 Billion is just the starting price...

  • Image of Mark Wilson Mark Wilson at 10:50 AM on 09/10/07 *
  • Apple would be dumbt to big against Google when they could bid with Google. GOOG wants to run the spectrum as an open standard - like WiFi. If Apple went 50/50 with Google they could guarantee access to this networkw for future iPhones and split the revenue from whoeve licenses the rest of it.

  • @baltwade: I'm pretty sure Apple's market cap puts it in the top tier of technology companies. They may not be Microsoft or Google, but they're up there.

    And, yeah, they have a ton o' cash just sitting in the bank, waiting to be used for something.

  • @RoyalKennebecasisAdventurersSociety:
    Here's a quick list of some larger companies that have a greater cash flow and ability to throw down $9 Billion than Apple:

    General Electric
    Verizon Communications
    Dell
    AT&T
    Time Warner
    Microsoft
    Intel
    Comcast
    Staples
    Whirlpool

    What Staples or Whirlpool would want with the wireless spectrum I don't know.











  • Image of Geisrud Geisrud at 11:04 AM on 09/10/07 *

    @Mixiboi: Smart auction attendees let the price fall first.

  • Image of Geisrud Geisrud at 11:06 AM on 09/10/07 *

    Ooh, pleas let Time Warner win the bid, then we'd be inundated with even more in-your-face and useless advertising.

  • Apple...Apple and MORE Apple...Is that all you guys can write about? Yeah, I know anything Apple is important but for Christ sake write about AMD or something of sorts.

    Today AMD release their new Opteron yet NOT one word about it. Come on guys, I expect better from you.

  • @baltwade:

    The companies with the most to gain / lose / protect in this list are Time Warner and Comcast. Expect them to bid as a consortium (possibly with Google as a technology partner).

  • @Geisrud:

    I think Mixiboi meant that the spectrum cost is just the first cost any company will incur. Building a network (and a business) will cost considerably more

  • If I where looking for spectrum space I would look at the analog broadcast spectrum for download of data & use existing cellular data for upstream. Would require new devices, but 2 or 3 tv channels worth of spectrum should give a decent pipe, & the infrastructure is already across the country. Switching what is xmited has got to be cheaper than starting from scratch

  • @baltwade:

    your comment proves the point. Apple is smaller and run by an individual. The larger company's may be too big and bureacratic to accomplish the nimble manuevers necessary to get this type of new venture off the ground.

  • Apple would probably reinvent bluetooth. And then everyone will have to buy another headset to make people think they are talking to themselves.

  • Yeah - write about the Opetron!... oh, wait. Uh, thank you.

    Alienware doesn't have a dual-Barcelona workstation for sale let. Lame!

  • @BLUE_MOUNTAIN:

    Scroll down the front page... a little more... there you go. Giz did write on the AMD chip see the title "AMD Launch Quad-Core Opteron a.k.a. Barcelona" looks like you'll have to find something else to bitch about :(

  • I don't understand why some VC can't gather up crazy amounts of funding and lease the spectrum out over the future fears - the returns would be unbelievable.

  • @robo: I wouldn't mind advertising instead of a fee, but with Apple I think we all know they would rather charge you money instead. Thats why I would rather see someone else (preferable Google) to win the spectrum. And its not like whoever buys the spectrum can't split off different frequencies for different applications either (at least thats my understanding, I could be wrong).

  • Microsoft should buy it at 9 million and 1 dollars just to mess with apple.

  • There is nothing more irritating than using "eyes" or "eyeing as verbs. As for the story, who cares?

  • Well, first the government should not be able to SELL access to public airways. Instead, it should tell everyone involved to come up with some gear that will play well together, test it to ensure that it does, then get out of the way.

    All these auctions do is lock out the smaller independent players, and shaft the "winner" with billions of dollars spent that now have to be recouped from the consumer's pocket.

    It's a great racket, the government get billions for selling access to property it doesn't own, and we as consumers end up paying for it. Hell, just tax us directly and be done with it.

  • As a proud Apple Fanboy, I can't even imagine how amazing this would be if Apple picked this up... this one move could make their gadgets become more widespread, and Apple does a great job of thinking things through for the user... I can only imagine the hackjob that would be done if Microsoft got it's hands on this.. I also think an Apple/Google (Goople... you heard it hear first!) alliance would be incredible.. because then Apple would get to use the spectrum with their products, and a bigger (and probably better overall candidate for the spectrum) would get to leverage it's uses as well!

  • @ROCKSTAH226

    It would be nice to see Apple & Google work together given both companies having a business model that is more aligned with consumer demands than most... though I have to admit that I prefer Apple as the underdog in some ways, since it forces the company to stay on their toes.
    ...
    Think of it this way - would Intel, AT&T, Microsoft, or IBM offer a $100 'store credit' to customers ticked about a price drop? I would expect a PR finessed response better than "it happens", and no offer of compensation.



  • This spectrum belongs to me. It also belongs to you. We own the government and its FCC. The spectrum should be leased, not sold, and we, the people, should have a direct say in who gets it and what its used for. But, of course, the reality is our government serves at the pleasure of large corporations. Never mind...

  • WHOOTOWL: And we the people also have the right to buy and own pieces of large corporations. Hell, they are more responsive to votes than our sad excuse for a democracy.

    I see no reason why the wireless spectrum shouldn't be auctioned off. There is a limited quantity of it, much like many other resources (see: land), but a one time auction can efficiently allocate it (see: Paul Klemperor, The Economic Theory of Auctions) and it becomes a resource that can later be bought and sold.

    I can't see any company wanting to build a business model around a wireless spectrum lease, as you have no guarantee that they won't later revoke your rights to use it.

  • Anyone but Apple. I really don't want to pay a 300% markup on something that has been intentionally gimped until they have another presentation to announce a better service that I have to buy alongside my current one.

  • @robo:

    Ok, selling our spectrum will generate enough revenue to sustain the war in Iraq for another two months. We should also sell off the National Parks to sustain the war for an additional month or two. The coastal waters could be more efficiently allocated; I can see a business model that would have surfers paying $10 per hour and boaters $50 per hour. KBR shareholders would be quite pleased.

  • is it bee mario going wild?

  • @KRUGORG:

    20 MHz of spectrum available to auction nation-wide. This is NOT enough spectrum for a wireless data business case, regardless of the technology used (unless you believe all spec sheets). The action will be at 2.5 GHz where there is nearly 200 MHz available, and mostly held by Sprint and Clearwire.
    ----
    20mhz @ 700MHz actually can have more usable channels than WiFi for example @ 2.4GHz.

    The ~100MHz that WiFi resides in only really provides 11-14 channels depending on the RF unit you use. That includes a little bit of overlap between center frequency of the channels. It comes out to about 10MHz per channel. The higher the frequency, the wider the channels need to be.

    At 700mhz, high speed data could actually use much less spectrum to provide the same or more channels for use.

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