14 DAY TRIAL // According to veteran wireless industry strategist Whitey Bluestein, Apple has all the elements in place to begin providing wireless service directly to its iPad and iPhone customers, eliminating the dependency on mobile service providers like AT&T, Verizon, and Sprint. Bluestein thinks they’ll do it, eventually.
A prominent strategic advisor to the wireless/mobile industry for more than two decades now, Bluestein told an international gathering of wireless operators, resellers and suppliers that Apple has all of the critical elements, including 363 retail outlets, to exploit its 250 million iTunes accounts with credit cards on file.
He also asserted that Apple can enter the wireless industry as a service provider thanks to a patent-pending network architecture.
Filed in October 2006, shortly before the first iPhone announcement, Apple’s patent application shows a diagram detailing how it would offer wireless service directly to customers using networks of several mobile operators.
At a presentation at the Informa MVNO Industry Summit in Barcelona, Bluestein predicted that “Apple will in the near future begin providing cellular service, data, voice and roaming, directly to its customers.”
“Apple will begin by offering mobile data plans bundled with iPads (vs. current practice of selling GSM iPads with AT&T data and CDMA iPads with Verizon data plans),” he said, adding that “Apple will then offer iPhone customers activation, data and international roaming plans through the iTunes Store.”
Tim Cook & Co. will provide everything from voice and data to messaging plans directly to its iPhone customers, on an a-la-carte basis. Google will do the same, according to Bluestein.
“The battleground is set, but Apple will be the first mover,” said Bluestein. “Google will have to scramble because it lacks retail distribution, experience with subscriber services and the iTunes ecosystem of content. iTunes and the iTunes Store provide Apple with one-click buying and customer care. Google can acquire most of these capabilities, as it has before, but it is not a core competency of the company.”
Bluestein says that the only thing holding Apple back from becoming a wireless provider has been the enormous handset subsidy paid by mobile operators which amounts to about $381 for each iPhone sold today.
“That has been a short-term stumbling block for Apple, but the company has its well-known cash reserves and could seize the initiative at any point,” according to Bluestein.