Google Inc confirmed its plans to bid for a prized piece of the airwaves in an upcoming government auction, further underscoring the Internet search leader's determination to shake up the wireless market and plumb more profits from mobile phones.
The announcement on Friday was not a bombshell because the Mountain View-based firm previously signaled it might participate in the Federal Communications Commission (FCC) auction scheduled to begin on Jan. 24.
In a mild surprise, Google will enter the competition without a partner more experienced in the wireless industry.
Going it alone will be expensive and potentially risky, even for a company as rich and technologically adept as Google, which ended September with about US$13 billion in cash.
The bidding for the swath of 700-megahertz spectrum that Google wants will start at US$4.6 billion, with analysts predicting the final price will be substantially higher. Building out the network for national coverage might cost an additional US$5 billion to US$7.5 billion, based on estimates from Citigroup Global markets analyst Michael Rollins.
Lingering questions about how the possible wireless expansion might affect Google's finances and focus on its core Internet business threaten to weigh on its stock in the months ahead.
The uncertainty could last awhile since the winner of the airwaves auction might not be identified until March.
Google shares fell US$4 to close at US$693 on Friday.
The airwaves up for grabs are widely coveted because the frequencies travel long distances and easily penetrate walls -- advantages that will require fewer radio towers while still promising better connections than other wireless networks. The spectrum is being freed up as part of the switch to digital television in February 2009.
Whoever wins the rights to the spectrum being eyed by Google must accommodate all types of phones and mobile software. Google lobbied the FCC to adopt "open access," arguing consumers should not be restrained by current market restrictions that limit the kinds of handsets that work on wireless networks.
"We believe it's important to put our money where our principles are," Google chairman Eric Schmidt said. "Consumers deserve more competition and innovation than they have in today's wireless world."
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by