Very interesting! It makes a lot of sense. Is it your own guess, or there are reliable rumors on the net stating that Apple really plans to bid on the 700Mhz spectrum?

I cannot say for now. It is all being discussed and worked out. Let's just say there is serious interest in this idea.

As to another's post, it will take serious $$$ to win the auction in January...Apple is a huge cash cow with over 13 Billion in the bank...the other players (cell phone companies) have already invested in other technologies so it would almost be like paying twice for what they already own. Google could become a big competitor if Apple doesn't work things out well with them, but I doubt (hope) not. I do not think Google has what it will take to manage all the tech in cell phones plus owning a cell phone network.

The challenge for Apple will be to manage the network or possibly allow AT&T to manage jointly with Apple...not sure. This undertaking would be just huge...Apple still needs to figure out how they'd manage it.

Good news though...the action is in Jan 2008...I believe the licenses for analogue TV expire April 1st 2009...so Apple would have over a year to figure out all the details and set this up.

Lastly, as to another comment, it would cost Apple billions...maybe even 10-15 billion possibly...maybe less if others just don't go for this huge investment. That sounds like a lot. But really, if Apple could sell 100 million cell phones and charge monthly rates 20% below the market....this cell phone system would cost 75% less than one with 4 times the number of sites..700mhz is efficient...plus Apple is way more efficient than the stodgy cell phone companies (look at AT&T printing out 200 page bills initially for the iPhone)...so I believe they could manage it for 1/5th the price as a typical network...perhaps less than that.

If Apple can bring in 40 billion in profit per year off of this (assuming 100 million cell phones on it...which equates to 115 million ipods out there), then paying 10-15 billion is pocket change...remember, that 40 billion IS REOCCURING PROFIT EVERY YEAR someone stays on the apple service!

If it is being sold in 2008, can no one else bid on this network like microsoft or sprint if this asset is so desired? And if it is the case that apple buys it at what price will it be sold if the demand for it is so high like you say. If apple pay billions and billion it will be years before they recover money and by that time another technology might come along. Hey I love products from apple but still dont own a cell phone, I hope this will make services cheap so I can buy one one day.

Great Report!

This Will Be Big!

Oh, yeah. The entire world will not be able to think of any other creative way to compete with Apple at lower cost. Apple owns all the manufacturing sites and can control all the production everywhere in the world.

Soon, Steve will be king.

Barf.

By George, I think you've finally gotten it...:-)

Oh, Yeah Baby. I'm drinking the Apple Kook-aid just like Mackooks and living in the past.

I only read the website Moveon.org and believe that Teddy Kenndy never drowned that poor girl.

Barf

I believe Apple makes the competition better...they always do in most things they get into...they are not perfect, but the user experience with Apple, at least in my personal/business experience during the past 6 years, has been far better than my Dell/Windows experience the previous 10 years.

So true.......great comment......go apple!!!

The iPhone profits using both the 700Mhz band and WImaxx technology from Intel seems to be the best way Apple could control it's top to bottom experience with the iPhone.

Not only is the 700Mhz extremely inexpensive to operate but the amount of bandwidth not only can Apple accomodate a large call volume but surfing the internet should be about twice as fast as 3G...so WiFi speeds.

ALSO, internet radio now becomes another possibility. We know Satelite radio with Sirius and XM radio...can you imagine if your iPhone in your car is now connected to a Wimaxx network that offers you hundreds of internet radio stations.

So not only is Apple getting into the cell phone business (hardware), the wireless network business (like Verizon, AT&T), but now also possibly a portal to offer a competitor to Satelite Radio as as Podcasts...all for FREE.

The internet is now both email, web browsing and an audio experience. If anyone has read about Slacker..the new company making customized radio stations based off of your musical tastes (artists, genres's) and perhaps soon you can put what you don't want to hear...with very fast connections you can be downloading songs from this web site at 5 seconds a song...in 60 seconds you now have 12 songs downloaded...if you ever drive out of range of a site..you have more than ample backdrop as your iPhone could be 1 hour or further ahead all in 1 minute!

The potential is mind boggling....Sat Radio is worth about 10 billion dollars...cell phone companies are worth 100 Billion dollars or more....Apple could reach that Trillion dollar company, being a Computer Company, A Music Store, An Audio company, a cell phone company, a wireless company and internet company and perhaps with Google an advertising monster!

There is nothing stopping Apple from going for this dream...no one outside of Google is a better position to spend wiser money and build out this 700Mhz network.

Remember even if you gave away the cell phone and Apple charged say $60 unlmited per month..that would be at 1/5 the costs of traditional cell phone companies a $45 profit per month per iPHone....100 million iPhones and we are talking about 4.5 Billion in profit per month...that's 54 Billion a year...that's $60 per share, not counting selling computers...at a PE ratio of 20, you have a $1,200 share price.

Ok, maybe this takes 5 years...still...that's almost a 10 bagger!

Seems like QCOM would have the advantage over INTC since QCOM is the dominant player in cell phone chips, and its Media Flow and BREW platforms for on-line streaming videos plays.

Anybody have any thoughts on QCOM and AAPL together ?

Yes I have some thoughts. QCOM has been damaged with it's suits with Broadcom over chips. Apple has not worked with QCOM before. Not to say this will not change but I don't see it.

Intel is the leader in Wimaxx. Apple's relationship with Intel is just top notch. I could see Apple picking QCOM if they believed they were ahead of the market in this area. But I believe Apple believes Intel is the leader in this area if they decide to pursue a wireless network.

Apple has the cash - connections and most important of all the drive and vision ....

I have been telling time and again that Apple is going to change the landscape of the entire mobile communication industry.

Simplicity is the slogan. Apple is the undisputed king in that area and there is no competitor seen in sight.

great point ..........

And what does that do to their ability to serve up movies and TV shows through that network as Rentals (movies) or as an ala carte Cable network (TV)?

And what does that do to their ability to serve up movies and TV shows through that network as Rentals (movies) or as an ala carte Cable network (TV)?

could be huge ..... $1,500 share price - 10 bagger yea baby ....

I am a long, but I think that this is a little bit unrealistic, even if Apple does pull off a major coup and end up controling a healthy chunk of the information and entertainment landscape.

$1500 would place the market capitalization at well over 1 trillion dollars (almost 1.5 trillion actually). Intense stock market forces will probably come to bear well before we reach that point. (If you think volatility is an issue now, just wait until investors have REALLY itchy trigger fingers when the market capitalization is high enough to purchase several small countries.) Remember, since Apple (and several companies like it) pay no dividends, the only value attached to owning the stock is the potential to sell it while it is up. The traditional expected "valuation" of a stock (using PE and growth) is actually somewhat arbitrary, and it can break down rapidly if something really seems unrealistic... like a 1.5 trillion dollar market cap, for instance.

As we move forward, and the stock market goes up, along with standard inflation, I do believe that Apple will eventually move there, but to expect it in the near term is foolish, I think. Any perceived imbalance between a given company and the rest of the world, especially given the arbitrary nature of valuation, will present a huge barrier to further share price gains. Let's work on reaching $600/share in the next 3 years before we get stars in our eyes. At that point, probably half of the owners will have already seen a 10 bagger or more... and they may be eager to unload at the first sign of trouble... even on a rumor. (I know that I would be sorely tempted at that point.)

Just my "keeping it real" opinion.


Thompson

Thompson,

You've got it wrong, mate.
Stocks don't go up simply because people want to dump them at higher prices. Stocks go up for many reasons, but in much regard to their future cash flows, regardless of dividends. Even if you buy a high dividend stock, don't you buy it based on its ability to *keep* delivering, and hopefully increasing that dividend? It's about future cash flow.

As for concerns about a trillion market cap...
It probably won't be Aapl that does it first. Probably one of the big oil co's would be my guess, but it doesn't matter. There were times when there wasn't a 100 billion company, 10 billion, 1 billion, as you go back in time. Can you imagine the gasps when KO or GE was the first to be a 1 billion dollar company? We'll have the same thing with 1 trillion. Then a 2nd company will cross the mark, and a third, and so on, and so on, until it's no longer big news.

Will Apple cross the trillion market cap barrier? Yes, I think it will. It may be 7-10 years away, but eventually, you betcha. Dow 100,000? - Yep. Nasdaq 20,000? - in the bag... with time. That's what stock markets do in the long run - rise.

<You've got it wrong, mate.>

Actually, with the exception of the beginning part, where my meaning may have been misconstrued, you are AGREEING with my conclusion, namely, that AAPL will EVENTUALLY get to 1.5 Trillion market cap, but it won't be as soon as the others in this thread are suggesting. (See my original post, it clearly says that.)

<Stocks don't go up simply because people want to dump them at higher prices. Stocks go up for many reasons, but in much regard to their future cash flows, regardless of dividends. Even if you buy a high dividend stock, don't you buy it based on its ability to *keep* delivering, and hopefully increasing that dividend? It's about future cash flow. >

I didn't say that "stocks go up simply because people want to dump them at higher prices." That is a misinterpretation of what I did say, although I confess that I said it poorly.

My point is simply this: you don't make money in a stock until you sell it. Often, people use that fact to try to convince you that you should sell soon, or whatever. I am not doing that. Don't read too much into what I am saying. It is a simple fact: you won't get a single dollar from your AAPL stock until you sell it. For my part, I don't intend on selling for a long, long, time, because I think the growth potential is enormous. In the meantime, the methods that are used to set valuation (e.g. PE of 20 for a tech stock that is not growing, or higher for one that has growth expectations, such as Apple) are not derivable from anything that is fundamental. They are based entirely on observed data and have become expected guidelines. They evolved in a quite arbitrary manner. Owning stock (that pays no dividends) is not like owning a product with its own intrinsic value. The value of a stock like AAPL is entirely contained in the answer to the question "what could I get for my shares if I were to sell them at some point in the future?". Of course the answer to that question is dependent on a host of fundamental and psychological factors, and I am suggesting that the "market cap" is one of them, and its effect becomes larger as your company gets further and further ahead of the "pack".


<It probably won't be Aapl that does it first. Probably one of the big oil co's would be my guess, but it doesn't matter. There were times when there wasn't a 100 billion company, 10 billion, 1 billion, as you go back in time. Can you imagine the gasps when KO or GE was the first to be a 1 billion dollar company? We'll have the same thing with 1 trillion. Then a 2nd company will cross the mark, and a third, and so on, and so on, until it's no longer big news.>

Look at where I said that any one company can't get too out of balance with the rest of the world. I am saying that you can't expect AAPL to shoot to 1.5 T market cap in the next few years while eveything else is still down here in the .5 T range. I said let the market grow and the economic landscape change over time. I agree that AAPL won't be first to pass the 1 T barrier.

<Will Apple cross the trillion market cap barrier? Yes, I think it will. It may be 7-10 years away, but eventually, you betcha. >

Go back and read my post again. I said that AAPL will eventually get there, but not as soon as these others are saying. So you are agreeing with me.

So now you should be saying "you got it right, mate".
Thompson

I've researched this and have mixed feelings. It appears that whoever wins the auction for this bandwith will be federally regulated and forced to share it with other companies. Rather than use up 6-8 billion to secure the bandwith, why wouldn't Apple let someone else buy it up if the government will allow them to use it anyway.

So what is the benefit for owning the bandwith? Does it mean that other carriers will have to pay the owner a leasing fee to use it? If that is the case, it makes the proposition much better.

Iphone is made in Schenzen China, that mean cost of making it is penny. Without ATT contract it already make a big buck
I promote iPhone in my website
www.vnexpressmall.com
and iphone is the best seller. The best of the best
I have many friends from other countries and they keep asking if I can send them iPhones for $600 a piece.
I do not see limit how many iPhones will be sold if Apple starts sell unlocked iPhone in China or Vietnam

Thank God they have about $15 Billion in the bank to use for this!!

Ace - Are you suggesting Apple could sell 100 Million phones domestically or worldwide?

Ahhh...very good question! To sell 100 million iPhones does that come from worldwide exposure...even if Apple owns a large enough chunck of spectrum, Europe will not be effected by this...at least as far as I am aware. Another deal would have to be made, which I am unfamilar with spectrum in Europe and Asia for that matter.

So I think 50% would be a good guess (50 million iPhones) in the US. And about 50 million iPhones abroad. That's a big number for the US market but completely doable if they advertise free calling for 2 years.

How does Apple get by in the short run for this 2 years of free calling...well, if they are making $100 a phone or say $150 a phone by then, due to it's huge volume increase, then selling that many phones would be 10-15 billion dollars, enough to cover their buying of the spectrum.

The rest is profit! I left out one part of this beautiful plan that you are all aware of even if you aren't thinking about it. That's GOOGLE! Those first 2 years the iPhone would allow GOOGLE to use it's advertising muscle to suppor the iPhone and of course Steve Jobs and Apple will be picking up revenue here as well. Possibly due to GPS like qualities where the phone knows where it is, these ads can be SMART ads.

Smart ads for dinner restuarants in your area, smart ads for specials and sales going on in your area, etc.. As I said this is a gold mine with just huge, HUGE, double HUGE prospects if Apple excecutes on many levels.

Of course it's not a done deal, not even close yet...but it is one strategy that has been considered and investigated by the man himself. We'll see what he decides.

One other thing I forgot to write. 50 Million iPhones selling outside the US is a big number. Part of that aggressive number comes from Europe and Japan..maybe 30 million or so. China is now being negotiated...even if Apple can penetrate 1 percent in China that's 12 million iPhones!

And Canada and Mexico may be covered by part of the 700Mhz deal or something similar...so another 5-6 million there...so I'm short 2-3 million..let's call those coming from misc. countries.

By the way if Apple does own the 700mhz frequencies, and if open access is adopted the way I believe it will be, they can charge access fee's to other carreirs to use it.

Since the auction is strictly anonymous, it will be very hard to tell whose buying the spectrum until it is complete. So cell phone carreirs, who cannot use this bandwidth because they're so heavily invested in 1.8Ghz frequency will have trouble justifying multi billion dollar bids just to possibly prevent someone else from buying it..just too constly with no return on investement at least for the short term!

If Apple partners with Google and or AT&T, the coup d'etat could become massive and be a huge shakeup to to the entire cell phone industry. Of course Intel with Wimaxx would and could be an active partner as well...thos 4 companies could easily raise 10-15 billion that it will take. Apple of course could do it alone, but!

But as Steve Jobs said in front of Bill Gates when they were being interviewed earlier this year, is that Steve wishes Apple could partner better...this could be Steve's shot in truly building a longer term relationship that is interdependent.

Apple may not go to $1,500 in 5 years like I'd like, but a $600 share price seems to be in the cards for sure...and further up from there in time. Apple is in something called the "media" market and that marketplace is just huge. Along with the "electronics" and "computer" industry apple is in an industry that has a market cap of probably 10 trillion dollars today...could Apple one day be a 10% player in this broad market...only time will tell-

Your statement is ludicrious. These carriers have paid for these networks long ago and are just milking the public. If apple desires to give away spectrum to cell hardware the government is not going to stand in their way. The rest of the carriers can do the same thing with the hords of cash they're sitting on and are milking the tax payer with.

However, I don't believe Apple will bid to become a carrier. It will cost billions to purchase the spectrum and 4 times that to build it out and maintain it. Apple would have to hire 100 thousand employees even before they sell the first plan. Share holders will go ape once losses start to pile up.

Do you realize the build out of a 700Mhz spectrum is already mostly done...it has been for the last 70 years...analogue TV has been using it and it work through walls, etc.. To buy a network that is already set up with broadcasting towers and most of the infrastruture is a short cut to getting into the wireless networks. I

Wimaxx can spead the signal at 700Mhz about 4 times more efficiently...so 4 times less sites to maintain vs the 1.8Ghz and 2.3Ghz spectrum the wireless carriers use. Wimaxx also goes through walls better so better and stronger signal. The shorter wavelengths are much MUCH better for wireless communication.

Why would Apple not want to have their iPhone on the best network. The only challenge and I agree its a big one, is maintianing this network, operating it and customer service. This is also partly why I see them splitting this with a Google or AT&T where Apple has ownership and maintains a certain level of quality and control and yet uses some of it's partners money to dilute the big expense of this.

Anoymous bidding will make it very hard for carriers to know whose up to what...this could be the coup d'etat of the companys history in my opinon. I mean listen to what Steve has said, the iPhone will be the biggest thing since the Apple II.

Ok then, why not let your Ferrari drive on an open highway with 5 lanes to really push things...why contrain it to city congestion that gridlock does not let you show off your goods. Apple is an active player in the cell phone industry now...they took that oath.

Wacth for follow up action...the money is too big to avoid and beach front property (700Mhz) is gold in the sky...Apple is a forward thinking company...they will do something-

Everyone wants to a Hollywood writer these days.

It is not 700MHZ,
It is 700GIGAWATTS.


It sounds better.

Yes!!!

OH, GOD!

Please! More Apple Kook-Aid. I must have MORE!

Barf

You need to take your MSFT Maalox and calm your nervous stomach - Why don't you go back to playing with a Vista install?

Ok, as this is just the hottest topic on the inside! Ok, news article today about how America is opening the 700Mhz frequency and so Europe next and then Asia and the middle east.

How does this effect Apple and it's iPhone. Just huge profit potential if Apple runs it's own wireless network. This article overall gives a tiny glimpse of what I'm talking about.

Read this article if you're interested in my orginal post. They say it takes less than half the cost to maintain this kind of network. My analysis shows much less than that...perhaps 1/4 to 1/5 of a typical cell network. They also talk about a higher band..the 2.3 and 2.4 Ghz...I referred to the 1.8Ghz as some use this as well.

It's all good info though. Read on -

http://apnews.excite.com/article/2007111...

CHL's market cap is $350 Billion.

They will outbid AAPL handidly

CHL from the prevous post...China Mobile Limited. Outbid Apple and others for the 700Mhz frequencies?

Now China does own America, but will they own this part of America...hmmm..never heard or thought about that. Not real familar with them. More info?

If Steve Jobs holds true to form we will see him make some attempt at controling the user experience on the iPhone which means owning, partnering, etc..managing a network...and preferably the gold standard of networks...the beachfront property of them all...the 700mhz band.

I think your strategy is sound, I think the execution is flawed.

Like our Ports being owned by investors in Dubai, critical infrastructure here in the US is being allocated and sold to "private equity" pockets. Read "Cerberus" or "Big China Money"

Largely, Private Equity is Chinese and Asian. Many are wrapped up in Anglo, Wall Street types of names (Blackrock, Cerebrus), but they're mostly funded overseas. They've bought/brought John Snow on board to help with the politics of how to arrange to get more infrastructure.

The Chinese love infrastructure. It's something America can't do without. What if all the railways in the US were owned by the Chinese? They bought Chrysler. I give it until 2011 before Ford and GM are owned by "Private Equity" (read: Chinese). How else do you get a Chinese car sold in the US?

Iphone is only one part of AAPl. Mac is the tomorrow star too.
Just buy it when it goes down, have a trip, then come back to enjoy the profit. That's what I did this summer. I didn't even know there's a crash in this summer at that time.

Great News!