Could Apple destroy the cell phone industry?

Now that we know Apple may want to bid for the 700MHz spectrum, is there any chance it could eliminate its competition and the cell phone industry altogether?

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Remember when I told you that I believed Google could kill the cell phone industr y by participating in the wireless spectrum auction? Well, what if I told you that Apple may participate in that same auction and the possibility of it destroying the cell phone industry is just as great?

Now, before you raise your hands and say I'm full of it, understand that this is all a guess on my part and there is currently no indication that Apple will (1) definitely participate and (2) do what I am about to say. That said, the company still might participate in the auction and my predictions could, could come true. So, without further ado, here is how I think Apple could kill the cell phone industry.

First off, Apple has the necessary funds in the bank to buy the wireless spectrum right out from under Google. Sure, it may seem like an unlikely battle because the two companies are practically in bed with each other, but let's not forget that this is business. And in the world of profit and loss, no one can be your friend for too long.

Now that we have the financial element out of the way, we should consider the impetus for such a move. Well, if the past few weeks have been any indication, Apple is in no way happy about its relationship with AT&T and would probably do anything it could to get out from under it. And while I know it's basically locked in for the next few years (most say the contract is for five years), why wouldn't Apple still go for a wireless spectrum that could be accessed from anywhere?

For the next few years, it's in Apple's best interests to stay in the contract with AT&T and develop and groom the wireless spectrum it won. But once that contract is up, Steve and Co. should forget about AT&T, T-Mobile and the rest, and go about making its popular device only capable of running on its wireless spectrum.

In effect, this solves two issues for consumers: the cost of entry would be just the iPhone itself and all future costs from carriers could easily be eliminated. But if Apple got greedy, it could always charge a slight monthly fee to use the iPhone on the wireless spectrum, which would be much less than the cost of having it on AT&T's service.

Sound plausible yet? Well, if you're still skeptical, consider the implications for all other cell phone carriers. With the world's most popular cell phone in tow, people would be more than happy to get out from under those disgusting contracts and save money in the process.

Although the title doesn't reflect it, Apple could easily eliminate a host of other competitors with the purchase of the wireless spectrum. First, it could annoy all of those cable companies that love to charge us $45 per month for Internet that doesn't even deliver on its promise. Wouldn't you prefer a free wireless connection over a paid connection? I know I would.

Next, Apple could eliminate practically all competition in the cell phone market. As I've said before, the cell phone market is one of the most competitive industries and very few companies have the ability to take an advantage and keep it. Well, it looks like Apple could easily keep its advantage with its own wireless spectrum--no one would be allowed onto it.

Now, before you tell me that everyone should be allowed to use it and all of this other stuff, I can't help but ask you why? Why in the world should any other company allow another's products to be used on its property? I never understood that mentality. I once heard John C. Dvorak mention that Google should get rid of any company on its search results if that company takes it to court. To be honest, I totally agree. Competition is competition and if you're the big company in town, you have every right to cement yourself as the leader going forward.

That said, I'm as shy of monopolies as anyone else, but I'm also a firm believer that lessons need to be learned and businesses have an incumbent responsibility to be as profitable as possible. Call me a cynic or call me unethical, but Apple should not and does not have any responsibility to allow Nokia, LG or any other company access its spectrum.

So, there it is--my view on how Apple could eliminate competition and possibly destroy the cell phone industry. Is it possible? Sure. Is it likely? You never know. But with the news that Apple may be considering a bid for the spectrum, right now, the possibilities are endless.

About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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