Back in the mid-1990s, the music industry scoffed at the idea that the Internet would ever have an impact on its business. Less than 10 years later, they were suing college coeds for downloading REM songs from shareware sites. Record labels were sweating as sorority sisters were loading up their iPods with torrents of dance music for free.
In stepped Apple with iTunes, simultaneously providing a low-cost, high-end audio solution for consumers while ensuring a reliable revenue stream for record labels and artists. Apple now owned the end-to-end music solution for both consumers and producers by cornering the market for not only the music devices, but also the music that played on them.
Well, Apple may be on the verge of owning another end-to-end solution outright, or at least dominating the marketplace like never before. The market is wireless, and if the big carriers like Verizon, Sprint and AT&T aren’t shaking in their phone sleeves yet, they should be.
Industry analyst Whitey Bluestein is the first guy to make this connection, and he’s not just suggesting it — he’s predicting it:
“In time, Apple will strike wholesale deals with one or more mobile operators so that Apple can provide wireless service directly to its customers, as Apple Mobile,” Bluestein told an international audience of mobile operators, vendors and MVNO, or Mobile Virtual Network Operators, assembled in Barcelona, Spain. (http://whiteybluestein.com/apple.html).
Now, this may be just the development that the wireless industry needs. Let’s look at the landscape for a moment.
For years, wireless service companies were like Blockbuster Video. Their main revenue came from renting out their airtime to users, just like Blockbuster rented movies. At Blockbuster, you could keep the movie as long as you wanted, because they would simply charge you late fees when you returned it. Your wireless carrier would do the same thing. They’d give you a certain number of minutes every month, and if you hit your limit, they’d simply let you keep talking and texting. Then, at the end of the month, you’d get your bill with ALL the overages, and pay sometimes as much as double your actual monthly rate in overage charges, just like Blockbuster late fees.
Eventually, the big carriers lost a large population of users who could no longer afford that model, which gave rise to the discount, prepaid wireless carrier that offered unlimited everything from anywhere between $40 and $60 per month, depending on the size of their network.
Now, that made the big carriers like Verizon to come out with their own similarly-priced pre-paid model to compete. The only problem with that is that users with old-school monthly contracts, who are still paying for big overages, are starting to realize that the pre-paid plans provide much more for much less. So, now they are starting to switch, leaving the bread-and-butter offering of the big carriers a shrinking giant.
Enter Apple. They don’t have any existing plans, so they can start from scratch and step into the fray with a higher quality network with a model that meets or beats the existing ones in the marketplace. They may even completely reinvent how wireless works with consumers. They’ve done it before.
So, take a look at your phone contract and figure out when it’s up, and then watch for Apple’s next big announcement. You might be able to get in on the ground floor of the new wave of wireless.