Apple is said to be considering bidding for a section of the wireless spectrum in the US.
The US government is about to auction off signals in the 700Mhz wireless spectrum in America. Google is already set to partake in the bidding. And now Apple is said to want a piece of the action.
According to two Business Week sources, Apple CEO Steve Jobs has studied the implications of joining the auction, which will be held on 16 January. The winners will get rights to use the spectrum that analogue TV broadcasters are handing back to the government in 2009 as they move to digital TV.
This wireless spectrum is likely to have the attributes necessary for a new mainstream broadband network, reports Business Week. "Signals at the 700Mhz spectrum, for example, could provide far faster Internet access than today's cellular or even WiFi networks, and the signals can easily pass through buildings and work glitch-free, even in lousy weather."
Apple has nearly $14 billion in cash, so the company can afford the $4.6 billion minimum bid required by the government. It could conceivably come up with the $9 billion that's expected to win a portion of the spectrum to be made available for a nationwide network, says Business Week.
However, would Apple want to move to being a network provider? One Business Week source doesn’t think so, pointing out that such services are generally "low-margin" and suggesting that becoming a network operator would "drag down Apple's margins – and could pose a cultural drag on an innovative company".
But owning the spectrum may be an attractive proposition to Apple who would no longer need to rely on a phone company. Cutting out the carrier would probably be in sync with Steve Jobs' view of the world, suggests Business Week’s other source. "Apple is the most anti-carrier company there is," says that source – a former Apple executive. "They're probably already frustrated with AT&T. If they put a few billion behind this, they could build a kick-ass network."