[Kraetos]

Originally Posted by rasmits I just can't seriously consider the Apple Mobile Network as a plausible solution. Nearly everyone already has a cell phone, and therefore, a cell service. Apple would be asking everyone to drop their contract and switch to the Apple network (which would have no history or reliability rating in the industry) all because of a new phone. That would be suicide for the "iPhone". Not only that, but I think an MVNO is an instant way to cheapen a brand name. Nike is a strong brand, but could you imagine how lame a Nike cell service would be? Ford? McDonalds? Apple has one of the strongest brands in the world and using it on an MVNO is a very bad idea, in my opinion. Yes, an MVNO would be an easy way to ensure the failure of the iPhone.

1) In what way does being an MNVO automatically destroy your brand? The fact that the majority of cell phone companies suck has tainted the industry, yes, which is even more reason Apple should go it alone to avoid that taint. Given the option between attaching its brand to Cingular and building a brand from the equity within Apple's brand, I don't think that is an unrealistic assumption.

2) Had I been thinking about it harder when I posted, I would have said something along the lines of "Unless they go the MVNO route, which, knowing Apple with the whole vertical integration thing, is a much better choice than going with Cingular." I think the most likely option at this point is unlocked GSM, much like the Samsung D900, because it exempts them from dealing with the cell phone carriers completely.

3) You still can't rule the MNVO out, though. Apple is used to selling a premium product to a small market segment. The iPod, for better or worse, is a fluke, in the respect that it managed to nab 70% marketshare in just five years. I think that if you had asked Jobs about the iPod's future was in 2001, he would have told you that it was meant to be a premium product for most Mac users and a handful of PC enthusiasts only, and was perfectly content to let Rio and Creative churn out junk for the masses. The massive takeoff And if you had told him there would eventually be an $79 iPod, he probably would've called you crazy.

The iPod is far more than anyone ever expected it to be. It is unrealistic to think of an iPhone in the same light, nor is it critical for the iPhone's success. The iPhone isn't meant to be the iPod of cell phones and probably never will be - the market is far too saturated with products that are good enough, unlike the MP3 market five years ago which was full of cheap or overpriced junk.

Furthermore, most cell phone contracts last 12-18 months. Is it unreasonable to expect that people would let them expire, and then buy an iPhone? No, not at all. And I bet Apple is willing to wait that out.

Finally, there are certainly advantages associated with complete vertical integration, such as bringing the store to mobile devices. Just a thought, though.