Why Apple Might Become an MVNO

A mobile virtual network operator ("MVNO") agrees to purchase, at wholesale prices, bulk access to a mobile network operator's ("MNO") wireless network services/infrastructure. The MVNO then resells these wireless services to individual consumers. MNO's like Verizon and AT&T also sell to individual consumers. Some quick thoughts on why Apple might become an MVNO:

  1. Apple can negotiate MVNO deals with one or more MNO carriers on behalf of all its customers. As a large entity with millions of customers, Apple's buyer power relative to a selling MNO is greater than an individual consumer's buyer power relative to a selling MNO. Apple can pass at least some of this financial benefit on to Apple customers who choose to purchase wireless coverage through an Apple MVNO plan. See Concepts page and discussion of Michael Porter. 
  2. As an MVNO Apple could improve the convenience, ease, simplicity, and transparency involved in purchasing wireless coverage. The process of purchasing wireless coverage for an Apple device isn't "good enough" because it lacks transparency and involves two selling entities: Apple and the MNO carrier. The purchase experience is also confusing because Apple sells multiple wireless devices (iPhones and iPads), each of which often needs a separate wireless plan, and because Apple sells these devices to multiple family members or business employees. As an MVNO Apple could take sole control over the wireless plans offered, how these plans are purchased, and the user's purchase experience.
  3. Paraphrasing Steve Jobs, as an MVNO Apple would gain the control needed to start with the optimal user experience, and could then work backward to the creation of coverage plans and purchase methods that deliver this experience.  

The author owns stock shares of Apple.