Apple might bid in the FCC's January 16 wireless spectrum auction, Business Week reported Monday. The 700Mhz spectrum is the last chunk of spectrum available to have the attributes required to construct a new broadband network. Its signals would allow for much faster Internet access than cellular or Wi-Fi. Apple has almost $14 billion in cash, so it can easily produce the required $4.6 billion minimum bid. If it does bid, it will compete with DirecTV and eBay, as well as possible new entrant Google. A bid would have a certain logic, since an Apple with its own spectrum would no longer have to depend on a phone company to deliver digital content to the iPhone. Apple could dramatically undercut the fees currently charged in the network service marketplace, possibly even giving service away for free. "Apple is the most anti-carrier company there is," said a former Apple executive. "...If they put a few billion behind this, they could build a kick-ass network." BW forecasts, however, that Apple will not bid, since it would mean shifting energies away from "creating the next innovative gizmo" and into the "low-margin, hardscrabble world of running a massive-scale network." Apple could employ an equipment provider like Ericsson or Alcatel to handle the "grunt work," but it would then be harder to generate a return on the original investment.
Sources: Business Week, Dow Jones, Information Week, C|Net Blogs
Commentary: FCC Spectrum Rules Favor New Entrants Over Incumbents -- Source • IPhone Sales Hit 1M; Moving Toward 3G • Is Google Serious About Bidding For Wireless?
Stocks/ETFs to watch: AAPL, GOOG, DTV, EBAY, T, ERIC, ALU. ETFs: IAH, FPX, FDL
Earnings call transcript: Apple F3Q07
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