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Apple Could Enter FCC Wireless Auction

by , 8:00 AM EDT, September 10th, 2007

Apple Inc. is considering entering the massive wireless auction that will be conducted by the FCC on January 16th, 2008, according to a BusinessWeek report. Citing two unnamed sources, the magazine reported that Apple management is considering joining the auction for the spectrum currently used for analog TV broadcasts, spectrum that will be handed back to the FCC in 2009. The auction is already the subject of interest for Google, TiVo, various and sundry telephone and cable companies, and other communications companies.

BusinessWeek editor Peter Burrows said that Apple could be interested in developing its own Internet access service with a successful bid, build its own iPhone-related network, or even develop a network for media and data services relating to iTunes, the Mac platform, iPhone, and iPod. All of those possibilities are speculation, however.

Apple has more than US$14 billion in cash and short term investments in its war-chest, and the FCC has set a minimum bid of $4.6 billion for interested parties. The report said that a winning bid is likely to be in the $9 billion range.

The spectrum to be auctioned could well be developed into a wireless network no matter who wins the auction. According to the article, the 700 MHz spectrum, part of the spectrum to be auctioned, could provide faster Internet access than even the fastest WiFi network today, and will pass through buildings, work in bad weather, and otherwise provide a cornucopia of bandwidth goodness.

The report said that Apple is leaning against joining the auction process "at this point," but that Steve Jobs and his management team have studied the implications of doing so.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Terrin Posts: 414 Joined: 29 Jan 2006
Subject:

I could see Apple teaming up with a company like Google and making a bid, but otherwise, I do not see this happening. It would be too expensive for Apple. Microsoft could out bid it without even blinking.

Close Name:Guest
Subject: Apple could easily afford this

Apple has 14 billion cash on hand. Google has 12 billion cash on hand. Microsoft has 21 billion cash on hand.

With the estimate of 9 billion, Apple is well poised to win it, if it makes sense for their business. Microsoft isn't going to simply outbid Apple, just because they can.

Also, Microsoft has many issues that would prevent it from dropping this much cash on something that would then need to be further invested in. Microsoft has lawsuits still underway and major areas of their core businesses that need lots of R&D. For Microsoft this would be a major distraction and a major investment in an area that could only serve business units of Microsoft that are currently losing money (Zune, xBox, Windows Mobile).

Close Name:brett_x Posts: 322 Joined: 24 Jan 2006
Subject: Welcome back, eWorld

I doubt Apple will run into the same problems they had with eWorld. http://lowendmac.com/coventry/06/0915.html
We're in a different time now, and Apple is a different company. If they were to take that on, I'm pretty sure it would be successful. Apple likes to make money as opposed to losing Billions of dollars.
It is fairly exciting to think of Apple being able to offer internet access though. I wonder: Could they use it for VoIP for the iPhone and get rid of AT&T all together? That would be an interesting move.

Close Name:Terrin Posts: 414 Joined: 29 Jan 2006
Subject:

Yes, but if the move makes sense for Apple and Google, Microsoft has to be thinking it might make sense for it as well. Moreover, assuming your figures are correct, Microsoft can kick out more money then either Apple or Google because neither Apple or Google is going to spend its whole cash hoard on such a purchase. APple likes the security blanket of having a cash hoard. As an Apple investor, I do too.


Quote
Guest wrote:
Apple has 14 billion cash on hand. Google has 12 billion cash on hand. Microsoft has 21 billion cash on hand.

With the estimate of 9 billion, Apple is well poised to win it, if it makes sense for their business. Microsoft isn't going to simply outbid Apple, just because they can.

Also, Microsoft has many issues that would prevent it from dropping this much cash on something that would then need to be further invested in. Microsoft has lawsuits still underway and major areas of their core businesses that need lots of R&D. For Microsoft this would be a major distraction and a major investment in an area that could only serve business units of Microsoft that are currently losing money (Zune, xBox, Windows Mobile).

Close Name:Guest
Subject:

Nevertheless, your characterization that "Microsoft could out bid it without even blinking" is an obvious exaggeration. Microsoft is smaller than you think. Apple is bigger than you think.

Close Name:Guest
Subject: Bothersome comment

My friend what you write is painful. I simply was on here to read the article above and stumbled upon this ignorance. Pleae do your research and think about what your saying. The MSFT bulley cliche has long passed - and they only got that way through smart business to begin with. This is not a drop in the bucket for any company and more importantly lacks strategy to purchase from MSFT with the facts we currently have on hand. And Apple as you say, likes cash on hand, but is no stranger to risk.

Quote
Terrin wrote:
Yes, but if the move makes sense for Apple and Google, Microsoft has to be thinking it might make sense for it as well. Moreover, assuming your figures are correct, Microsoft can kick out more money then either Apple or Google because neither Apple or Google is going to spend its whole cash hoard on such a purchase. APple likes the security blanket of having a cash hoard. As an Apple investor, I do too.


Quote
Guest wrote:
Apple has 14 billion cash on hand. Google has 12 billion cash on hand. Microsoft has 21 billion cash on hand.

With the estimate of 9 billion, Apple is well poised to win it, if it makes sense for their business. Microsoft isn't going to simply outbid Apple, just because they can.

Also, Microsoft has many issues that would prevent it from dropping this much cash on something that would then need to be further invested in. Microsoft has lawsuits still underway and major areas of their core businesses that need lots of R&D. For Microsoft this would be a major distraction and a major investment in an area that could only serve business units of Microsoft that are currently losing money (Zune, xBox, Windows Mobile).

Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Subject: Re: Bothersome comment

Quote
Anonymous wrote:
My friend what you write is painful. I simply was on here to read the article above and stumbled upon this ignorance. Pleae do your research and think about what your saying. The MSFT bulley cliche has long passed - and they only got that way through smart business to begin with. This is not a drop in the bucket for any company and more importantly lacks strategy to purchase from MSFT with the facts we currently have on hand. And Apple as you say, likes cash on hand, but is no stranger to risk.


One small correction (besides the spelling): Microsoft "got that way" through illegal activities, as well as "smart business." Remember that the company has been declared an illegal monopoly and convicted of illegal business practices in the US and the EU.

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