Apple as a company are hitting walls expanding their business, having a carrier would give them another point of innovation
(The rumored Apple self-driving car, if true, was also a silly idea. Aside from self-driving cars being an order of magnitude or two more difficult than popularly expected, building cars is not something Apple has any experience with, and is a capital-intensive business with little barrier to entry [besides capital]. Buffett noted that totaled since their beginning until now, car companies and airlines have, on net, lost money for their investors.)
[1] https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
Somewhat disagree. If you stuck Apple and ATT into a single holding company, each company still has identical focus. Does Berkshire Hathaway buying another company dilute the focus of any other?
I am always surprised when companies want to eliminate small divisions and projects that break even as if they cant just exist off to the side, pay for themselves, and be otherwise ignored. Not everything has to contribute to corporate profit. Resources that pay for themselves aren't consumed in a way that can be reallocated if they are eliminated.
As a worker you're mainly concerned about how many dollars you get for an hour of work, a capitalist is concerned about the return they get on investment -- they want to invest as little as possible but get as large a return as possible.
A consequence of that is that a huge valuation like what Apple has is a bit of a bluff. If they really started to invest that capital their valuation would collapse, their capital looks valuable because they can run a big business while using very little of it.
The commoditization is a myth - it’s like beer, most of the competition are brands that are either reskinned white label services or partners.
AT&T's gross margin is 50-60% (for reference, Apple is usually 40-50%).
EDIT: I stand corrected! Multiple "Apple Original Series" contain Apple products, such as in Ted Lasso and (I think implied) in For All Mankind, as people pointed out below. Shows what I know about TV.
I wonder why some Apple Original Series have Apple products, and some don't. I would love to see if there's any correlation between the number of shows which feature a specific product and that product's market share in the show's region or demographic.
Apple has 'villains can't use iPhones' rule. Directors are not allowed to use Apple product placement for villains.
Apple pushes their products in Apple TV+ and pays for product placements, or provides their products for free for other productions as as long as you follow the rules.
Apple is "hitting walls" expanding their business because they have captured nearly the entirety of their potential customer base. They don't need to keep expanding.
I oversaw a big org that had like 50k iPhones. We would never come to agreement with Apple’s terms, and they’d never give us the price concessions.
Those 50k phones never cost more than $15,000 annually. I paid more for charging cables than iPhones. Apple can’t do that, as the feds have most favored nation status for procurement. Carrier also accept liability for the App Store, which Apple will flip the bird about.
Why would they want to halve* their market cap?
Lol.
(*: ok 2T vs. 3T)
So let's make the case to shareholders: We buy Verizon, with a $180 billion market cap, for a substantial premium; assume $115 billion of their debt; there's an investment into 6G on the horizon; this hopefully won't anger any major players in the Android market (e.g. Samsung) from abandoning the network; and this will somehow magically reach the break-even point. Obviously, absurd.
Apple profits from phone sales. The more distribution channels, the more phones they can sell, and more organizations spending the money to advertise iPhones.
If Apple bought a cell carrier, they would be in direct competition with the other carriers. Worst-case, they would likely get dropped from the other's lineups. The less worse case, they wouldn't get advertising/promotion from their competition.
https://www.mobileworldlive.com/apple/globalstar-apple-super...
It's super expensive, only a real option for emergencies and not a mass market.
Either they expect low orbit sat to be the next thing or it's a pure diversity topic because yeah what else should they do
It's already a fully integrated end-to-end communication device.
They don't know how to operate it, they don't care about millions of people complaining about shitty network, they don't have to handle internationalization and they would position themselves against whoever carrier is before/after at&t, Verizon and T-Mobile.
They make huge margins by making hardware. This type of margin is not happening at carriers.
And no just because companies like Verizon do have daughters in other countries they are not global. So apple would also need to expand to all countries.
I only see a lot of downsides and not a single upside.
Might wanna reach out to hn@ycombinator.com and ask.
(Welcome to HN btw)
And owning all the fiber connections between the base stations and their network.
And all connections from home to their network.
And even if they have that, you are not browsing Verizon services but from others like Google etc.
They don't do that.
Closest operator I know could be German Telekom because they came out from the state owned Telekom company and they got all the copper which was laying around.
Apple Watch has FDA marketing authorization for afib detection (and looks like sleep apnea detection as well)
PATH 1: Privatized Carriers are the Forever Norm
In this scenario, private carriers (cellular, wireline, satellite, fiber, etc) don’t get nationalized or regulated (so now, but forever). The market forces there are all about consolidation since these are low-margin businesses, and fewer competitors means higher prices, more revenues, and more customers. If Apple entered this arena, they’d be exposing themselves to the predatory maneuvers of companies like BT or AT&T, who generally enjoy screwing their competitors over and locking customers in. Now these telecoms would have justification for blocking Apple devices or functionality (like some did to FaceTime), and deliberately choosing radios the iPhone doesn’t support so as to force Apple to spend more money on expansion of their network or adopting new radios for said networks. It generally exposes Apple to a world of pain and misery for nothing in terms of growth, and hinders their technological progress by forcing them to invest exponentially more money to support new standards or products across their network.
PATH 2: Carriers are Nationalized, with Telecom treated as a Utility
This is a more likely outcome given the importance of the internet to the functioning of a society. As a general rule, if your country NEEDS something in order to succeed, that thing is cheaper and more scalable if you own it yourself - provided you have a functioning government apparatus that invests in its modernization and maintenance (so, not America). In this case, Apple would’ve started their own carrier only to see control taken from them for the public good, wasting money they could’ve invested in other R&D or product lines. That’s likely the long game they foresaw back in the 2000s, and is likely why they never started their own MVNO or carrier.
Ultimately, Apple benefits more from building products on internationally standardized communications systems than building said systems themselves. It keeps their costs low, lets others absorb R&D and upkeep costs, while also driving the market and infrastructure adoption through new products themselves.
Infrastructure is rarely directly profitable to private enterprise, and when it is, it’s often taken away once it becomes necessary for the survival of a country.
If Apple bought a carrier, they'd need to sink insane capital into making it noticeably better (than others and itself before acquisition). And if they did, how noticeable is a little extra bandwidth? Not very considering everyone is offloading to wifi anyway.
