Apple patent would require carriers to bid for iPhone service

The filing describes a bidding system that lets competing carriers send rate information to the handset. The phone or the user would parse this data and select the most favorable rates for any given geographical location. Interestingly enough, the patent lists Verizon and Sprint as an example of competing carriers that could use this system. This selection service would let Apple act like an MVNO with billing to be handled through iTunes.
This MVNO system is reminiscent of the upgradeable, integrated SIM that emerged last October. According to this earlier rumor, Apple was working with SIM card manufacturer Gemalto to create a cross-carrier SIM card that would let users switch carriers without obtaining a carrier-specific SIM. Carrier response to this proposed SIM card was overwhelmingly negative with several European carriers threatening to drop the subsidized iPhone if Apple were to pursue this SIM card design.
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Apple was recently awarded a patent describing a wireless selection system that would require carriers to compete for service on an...
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Nokia's deal with Microsoft could help Nokia resolve its patent fight with Apple. Picking Android instead would have made the situation worse.
Nokia first sued Apple over patent infringement back in 2009, alleging that Apple used Nokia patents on wireless technologies like GSM in the iPhone. Apple countersued and the companies have been fighting it out in court ever since.
Read more: http://www.businessinsider.com/microsoft-deal-could-help-nokia-in-patent-fight-with-apple-2011-2#comment-4d58c7824bd7c82c0d2d0000#ixzz1DuYB68KH
I haven't read Apple's patent filing but the technology exist and has been in use for 15 or 20 years.
February 10 2011 at 4:30 PM Report abuse Permalink rate up rate down ReplyI hope they add a time element as well. Having free markets on the mobile phones is going to be awesome (as long as it is regulated, i.e. no price fixing).
I ask for a time element to handle load. As pressure builds carriers should adjust the cost realtime for newly established connections. Taxi drivers in NY may think twice about gabbing non-stop during rush hour. Users will use less as the price creeps up and load will be balanced and we will get better service and the telco will maximize profits.
It will be a pain to choose each time a connection is made however. Average pricing will need to be introduced so that commitments can be made on a user definable interval. E.g. you can commit for a locked in rate for X amount of hours.
Micro-payments, micro-contracts, it's the future.
So it would be more like other countries where you can just go get the same phone and pick it based on the service provider. Subsidies wouldn't go away, it would be part of the package, buy your phone at full price, pick service "A" and they offer to send you a $400 visa gift card, or something. Like buying tires for a car, at least mine because no I can't just put $80 tires on my car it requires tires that make your wallet hurt to buy, but here's a $70 rebate. Lame.
February 10 2011 at 12:29 PM Report abuse Permalink rate up rate down ReplyHow much money could you save every month if you paid 25¢ for each iPhone call? What would a GB sell for in open electronic bidding? At peak traffic times, would you buy a call for 50¢?
I like questions like these.
This is exactly what needs to happen. Make the carriers compete for business and watch the race to the bottom begin.
February 10 2011 at 11:26 AM Report abuse Permalink rate up rate down ReplyThe important part to note is this bit:
"The phone or the user would parse this data and select the most favorable rates for any given geographical location."
THE PHONE or the user. Mark my words -- it won't be the user selecting the carrier based on the lowest rate. This is Apple we're talking about. It will be done automagically by your phone, and it will select the carrier willing to give Apple the biggest kickback for each transaction.
This is essentially a dead giveaway that iPhones in the future will have dual mode chips. Go buy your Qualcomm stock now - the chip's already there in the Verizon phone.
February 10 2011 at 10:41 AM Report abuse Permalink rate up rate down ReplyGoogle already owns this patent. It was filed for on March 19th, 2007, which shows how far ahead Google is thinking here, and was received on September 25, 2008.
Google's Patent reads;
"A method of initiating a telecommunication session for a communication device include submitting to one or more telecommunication carriers a proposal for a telecommunication session, receiving from at least one of the one or more of telecommunication carriers a bid to carry the telecommunications session, and automatically selecting one of the telecommunications carriers from the carriers submitting a bid, and initiating the telecommunication session through the selected telecommunication carrier."
If you would like to read the entire thing it can be found here: http://goo.gl/6Xc5
Should have done this in '07.
February 10 2011 at 10:31 AM Report abuse Permalink rate up rate down ReplyThis is certainly a big step in the right direction. Let's hope the carriers don't decide to punish the consumers by dropping subsidies due to this. A contract is a contract, and this system would not invalidate such a thing. My guess is that this would mostly be useful for non-contract priced iPhones, and may lead to pricing plans more favorable to those who prefer not to have a subsidy. As it stands right now, there is no advantage whatsoever to buying a phone at full price if you don't have to. You still have to pay the same monthly fees whether you're on contract or not.
February 10 2011 at 10:21 AM Report abuse Permalink rate up rate down ReplyYou can bet subsidies would go away if this is put in place, but in the end the consumer would win. No cell carrier is going to subsidize $400 of a phone with no guarantee that they would receive call revenue.
That being said, the cost of these phones is going to come WAY down. Now that things like GPS, cameras, and high PPI (e.g. retina) displays are pretty standard, the costs for those components will fall drastically in the next couple years, eliminating the need to subsidize the cost of the phone.
Apple is going to be putting it's money where it's mouth is with this setup. They have the most popular phone and they are going to tell carriers "People buy our phone because of the phone, not because of the carrier. If you want to supply our customers with your service, here are 30 million customers, we just want a cut of the cell revenue."
I wouldn't see this as the carriers, bless their tiny little hearts, punishing users.
More like the whole reason they offer a "subsidy" is to lock you in for 2 years and without the lock-in they'll have to earn your patronage thru service level or price. And there'd be no subsidy.
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