Apple Inc.¡¯s had a busy few days. First the company slashed the cost of the iPhone by $200. Then it announced it sold its 1 millionth iPhone. And now, rumors are swirling that the computing juggernaut is considering bidding in the upcoming 700MHz spectrum auction.
Business Week is reporting that the company has studied the ramifications of becoming an operator.
Cons: margin losses and the challenges of operational scalability, particularly considering that Apple has no network experience. And if there¡¯s anything we know about the telecom business, it¡¯s that glitzy marketing is not enough to succeed. Pros: gaining business model flexibility for the iPhone and iTouch iPod. An open-access network strategy at 4G speeds could pave the way for widespread wireless broadband uptake. Untethering the iPhone from AT&T would release users from the slow Internet access available on the AT&T network, too. And, innovative strategies like offering free Internet service with paid applications could be a game-changer.
The Jan.16 auction will likely see other non-network operators at the table, too, such as Google Inc., eBay and potentially Skype, along with other competitors like DirecTV. The spectrum, freed up by the move from analog to digital television, has better propagation characteristics than the wireless spectrum available now, and can support indoor coverage, higher throughput and better QoS.
As for the iPhone, Apple sold its 1 millionth device in just 74 days. The company said that it didn¡¯t sell its 1 millionth iPod for two years.
CEO Steve Jobs also apologized a day after last week¡¯s price cut to angry customers who felt penalized for being early adopters and forking over almost $600 for the pleasure. The company is giving them a $100 credit to Apple stores.
Apple cut the price of its 8GB phone to $399 and is discontinuing the 4GB device.
That news sent Apple stocks tumbling more than 5 percent. But word of the millionth sale helped Apple gain 3.33 percent to $135.10 in early afternoon trading on Monday.