It is old news, really. Google (NASDAQ: GOOG) will be bidding on some of the wireless spectrum to be offered by the FCC in January. Speculation is that it will buy a piece of the regulated airwaves and allow consumers to connect to a large number of devices for little or no charge. The airwaves would be "open." Google would make money from selling advertising on the handsets that access the service. The deal would also drive incumbents like Verizon Wireless and AT&T (NYSE: T) crazy by offering a new model for mobile consumers.

Or, it goes something like that. The media has never been able to exactly pin it down. According to The Wall Street Journal, Google "has said it wants to make mobile networks more open, so that consumers can use any Internet service and application and move their handsets between carriers without onerous restrictions."

It is not clear how Google will make back the billions of dollars it would have to pay for the spectrum. It is also fuzzy how Google would deliver the system. Would it make an investment in expensive wireless infrastructure like cell towers? Would it lease those from a third party? The project is much more expensive than just buying the spectrum.

Continue reading Google to bid on wireless spectrum

Google to bid on wireless spectrum originally appeared on BloggingStocks on Fri, 30 Nov 2007 09:52:00 EST. Please see our terms for use of feeds.

Since the story ran at BusinessWeek.com, it has some credibility. The online version of the magazine reports that Apple (NASDAQ: AAPL) is considering joining the government's auction of wireless spectrum, putting it in potential competition with Google (NASDAQ: GOOG).

Apple certainly has the $4.6 billion needed to enter the bidding, but the magazine says that the low margins in running a large wireless network might keep the consumer electronics company away. However, if Apple did succeed in the auction, it would have its own network for the iPhone. As a potential attraction, the company could allow its handset to use inexpensive VoIP.

Apple may have a longer-term reason to look at the spectrum. At some point, its sales of iPhones and iPods will slow in the U.S. But, having a service network would allow the company to combine video, music, and voice onto one platform, which could extend the sales life of its current products.

Another attraction might be the scale of the opportunity. Verizon Wireless will bring in about $40 billion this year. And, it is highly profitable. Offsetting that is the costs that were necessary to build out the infrastructure to support those revenues. But Apple might end up in a partnership with another company, say Google, to share those costs.

It may seem crazy, but so is the success of the iPod.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Would Apple (AAPL) become a cellular carrier? originally appeared on BloggingStocks on Tue, 11 Sep 2007 08:15:00 EST. Please see our terms for use of feeds.

What do TWX and Eminem have in common? originally appeared on BloggingStocks on Wed, 24 May 2006 13:59:00 EST. Please see our terms for use of feeds.