How Apple Could Rock Wireless

How Apple could rock wireless: Nokia, Motorola, Samsung and LG might be secretly rooting for the Apple phone to be a (minor) hit.

By Stephanie Mehta, Fortune senior writer

NEW YORK (Fortune) -- If Steve Jobs' Apple decides to build a wireless phone, as widely rumored, the company has the chance to shake up not just the wireless device business -- an industry dominated by the likes of Motorola and Nokia -- it also could upend the entire wireless distribution model in the United States.

We know very little about the Apple's plans for a cell phone. Apple (Charts) isn't talking ("We don't comment on rumor and speculation," a spokesman told me) but we do know that wireless represents a huge opportunity -- and threat -- for Apple, and every other consumer electronics and computer maker.

Wireless phone makers increasingly are adding MP3 players to their devices, with the capability to download songs over the air. It certainly makes sense for Apple to want a piece of this action.

How Apple makes this happen is a topic of great swirl in tech and telecom circles. UBS telecom analyst John Hodulik recently published a report positing that Apple would seek to become a virtual phone company, buying airtime wholesale from Cingular and reselling wireless service, along with its new phone, sometime in the first quarter of


Other rumors have Apple building a phone with built-in Wi-Fi service that would allow customers to make calls and download data and music from the free or cheap Wi-Fi networks proliferating in urban and suburban settings, bypassing traditional cellular networks. Both scenarios underscore Jobs' aversion to ceding control to telcos such as Cingular, Verizon (Charts), T-Mobile and Sprint (Charts), which exercise huge control over the entire wireless food chain in the U.S.

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Monty Solomon
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