Verizon rejected Apple iPhone deal

[Cybergypsy]

Verizon rejected Apple iPhone deal
Updated 1/29/2007 9:50 AM ET E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this Subscribe to stories like this
By Leslie Cauley, USA TODAY
NEW YORK — Verizon Wireless, the No. 2 U.S. cellphone carrier, passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple's rich financial terms and other demands.

Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, said Jim Gerace, a Verizon Wireless vice president. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial."

Verizon's decision to pull the plug on talks sent Apple into the waiting arms of Cingular, which will be the exclusive U.S. carrier for the iPhone. The multifunction device is expected to ship in June and cost about $500.

VERIZON Q4 EARNINGS: Profit falls, beats estimates

Apple and Cingular (which now is solely owned by AT&T and adopting that brand name) have declined to discuss terms of their alliance. But the Apple-Verizon talks offer a peek into the computer giant's thinking.

According to Verizon, Apple CEO Steve Jobs insisted that he have hard control over iPhone distribution.

The problem? While Apple and Verizon stores would have it, Wal-Mart, Best Buy and other Verizon distributors could have been left out. "That would have put our own distribution partners at a disadvantage" to Apple and Verizon stores, Gerace said.

Customer care was another hitch: If an iPhone went haywire, Apple wanted sole discretion over whether to replace or repair the phone. "They would have been stepping in between us and our customers to the point where we would have almost had to take a back seat … on hardware and service support," Gerace says.

Cingular won't talk about the financial terms or say how long its iPhone exclusivity lasts, but two people with direct knowledge of the deal say it's a five-year contract. The exclusive is USA-only, leaving Apple free to market its iPhone globally.

Natalie Kerris, an Apple spokeswoman, declined to comment on any aspect of this story.

Mark Siegel, a Cingular spokesman, said, "We think this is a win for Apple, and it is a win for Cingular."

Siegel declined to comment on customer care plans but said Cingular would field calls related to the wireless service. "I don't want to leave the impression that these (iPhone) customers are not ours. They are."

Siegel would not say whether Cingular distributors, which include Wal-Mart and RadioShack, would get the iPhone. The deal announcement referred only to Cingular and Apple stores and their websites.

I am happpy as i hate verizon!

[webby]

I wonder how bad this will hurt verizon, or HELP cingular.

[civic si hb]

Originally Posted by Cybergypsy

Verizon rejected Apple iPhone deal
Updated 1/29/2007 9:50 AM ET E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this Subscribe to stories like this
By Leslie Cauley, USA TODAY
NEW YORK — Verizon Wireless, the No. 2 U.S. cellphone carrier, passed on the chance to be the exclusive distributor of the iPhone almost two years ago, balking at Apple's rich financial terms and other demands.

Among other things, Apple wanted a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers, said Jim Gerace, a Verizon Wireless vice president. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial."

Verizon's decision to pull the plug on talks sent Apple into the waiting arms of Cingular, which will be the exclusive U.S. carrier for the iPhone. The multifunction device is expected to ship in June and cost about $500.

VERIZON Q4 EARNINGS: Profit falls, beats estimates

Apple and Cingular (which now is solely owned by AT&T and adopting that brand name) have declined to discuss terms of their alliance. But the Apple-Verizon talks offer a peek into the computer giant's thinking.

According to Verizon, Apple CEO Steve Jobs insisted that he have hard control over iPhone distribution.

The problem? While Apple and Verizon stores would have it, Wal-Mart, Best Buy and other Verizon distributors could have been left out. "That would have put our own distribution partners at a disadvantage" to Apple and Verizon stores, Gerace said.

Customer care was another hitch: If an iPhone went haywire, Apple wanted sole discretion over whether to replace or repair the phone. "They would have been stepping in between us and our customers to the point where we would have almost had to take a back seat … on hardware and service support," Gerace says.

Cingular won't talk about the financial terms or say how long its iPhone exclusivity lasts, but two people with direct knowledge of the deal say it's a five-year contract. The exclusive is USA-only, leaving Apple free to market its iPhone globally.

Natalie Kerris, an Apple spokeswoman, declined to comment on any aspect of this story.

Mark Siegel, a Cingular spokesman, said, "We think this is a win for Apple, and it is a win for Cingular."

Siegel declined to comment on customer care plans but said Cingular would field calls related to the wireless service. "I don't want to leave the impression that these (iPhone) customers are not ours. They are."

Siegel would not say whether Cingular distributors, which include Wal-Mart and RadioShack, would get the iPhone. The deal announcement referred only to Cingular and Apple stores and their websites.

I am happpy as i hate verizon!

Wow, very interesting, i too am not a fan of Verizon. It say's they are the number 2 carrier for cell phones. Do you know who is the number 1 carrier is? I have Cingular for the last 3 years and love their phones and service.

[06si]

I think cingular and Verizon are close in the race. I have a friend who has Cingular and he cant wait to get rid of it. I have Verizon and I've never had any major problems with their service.

[tennisfan16]

Originally Posted by civic si hb

Wow, very interesting, i too am not a fan of Verizon. It say's they are the number 2 carrier for cell phones. Do you know who is the number 1 carrier is? I have Cingular for the last 3 years and love their phones and service.

i am pretty sure cingular is number 1

[NightKidsGTR]

Saw that this morning on the news. They're also increasing text messaging to 15 cents per message (if you don't have a plan).

Stupid move on Verizon's part. Then again, Verizon is pretty good at screwing over their consumers. The biggest example is crippling Bluetooth for consumers by disabling OBEX for media (aside from pictures as seen in the Krazr) and forcing Verizon customers to either buy their ringtones or buy the PC connectivity kit to transfer their music to their mp3 enable phones.

Only reason I have Verizon is because I get a business discount

[Special Ringpop]

If their reliability is anything representative of the iPod's reliability, I can see why Verizon rejected them.

This, of course, makes me a hypocrite, as I use my iPod quite regularly in my car, but I still think they are crap and overpriced.

Also, complete and utter control over marketing and service plans? Why not just open up an "Apple Phone Service"?

[skittleslegend]

I could be wrong, but from reading the article, it sounds like Apple wanted to, essentially, monopolize the deal with Verizon. That for damn sure wasn't going to work. WTF were they thinking....?

[[IVI]]

Originally Posted by skittleslegend

I could be wrong, but from reading the article, it sounds like Apple wanted to, essentially, monopolize the deal with Verizon. That for damn sure wasn't going to work. WTF were they thinking....?

They were thinking the along the same lines of their iPod line. Ever notice how the iPod is the same price no matter where you go? An iPod that sells in the Apple store for $249 is still $248.87 at Wal-Mart. They have complete control over them. I bet the retailers have a love/hate relationship with Apple.

[Gonzo]

I've mentioned it before but it is worth repeating, according to a very recent study Consumer Reports did Verizon almost always got the top marks and Cingular often was last, or second to last in front of Sprint.

Verizon received good scores for customer service where as Cingular got mediocre to poor scores.

So it would seem as if Verizon had, customers may have been better off. Then again even though Sprint did somewhat poorly I have had acceptable service with my Sprint phone.

I guess we will see how it turns out but I am a bit apprehensive that Cingular has taken the reigns seeing their track record...

[Biggeo]

I have had Verizon for 7 years and haven't had any major issue with them besides having a crappy Razr (which I despise).

[skittleslegend]

Originally Posted by [IVI]

They were thinking the along the same lines of their iPod line. Ever notice how the iPod is the same price no matter where you go? An iPod that sells in the Apple store for $249 is still $248.87 at Wal-Mart. They have complete control over them. I bet the retailers have a love/hate relationship with Apple.

Now that you think about it, you're right. I don't think I've ever noticed that (probably because I've never wanted an iPod.) I'm like the only person in America without one.

[Special Ringpop]

Originally Posted by Biggeo

I have had Verizon for 7 years and haven't had any major issue with them besides having a crappy Razr (which I despise).

I love my Razr, but I am waiting for it to shit out on me.

I was already in a contract, but when comparing phones, the associate told me that the model I have is the newer released model, just came out, and is better and more reliable.

Not sure I believe it, but so far so good.

[Biggeo]

Originally Posted by Special Ringpop

I love my Razr, but I am waiting for it to shit out on me.

I was already in a contract, but when comparing phones, the associate told me that the model I have is the newer released model, just came out, and is better and more reliable.

Not sure I believe it, but so far so good.

I'm on my 4th...no sh!t. I have a V3c M now so we'll see...

[arisenfury]

My family has been with Verizon back when it was Bell Atlantic Mobile out here on the east coast in the late 80's and 90's. Aside from all their phones having that shitty ass interface, they're pretty reliable. I love new cell phones and in the past year I've had 6 phones. Inlcuding the razr when it first came out on Verizon last fall (which had it's good and bad things). Last spring I went to switch to Cingular when the SLVR first came out, I had the phone and service for about 3 weeks before I called it quits. Wasn't happy at all. I think the iPhone is gonna be a flop anyways, at least until they give it more memory than a nano. On top of Apple not allowing them to discount the phone with contract agreements, you'll also have to sign up for a data plan to use many of its features or pay out your ass when the bill comes with data charges you didn't pay in advance for.

In reference to the original thread topic, Verizon seems to be more geared to families, adults and business, whereas I've always seen Cingular as more for the older teens and the younger crowd. So it makes more sense, to me at least, for it to be with Cingular.

As far as the number one carrier, I always thought it was Verizon, but I guess that's not the case anymore. I think it actually might be Sprint/Nextel at the moment.

[moxom]

The iPhone* and Cingular is actually a pretty good match. See you can listen to your tunes in-between the many dropped calls that you're going experience on Cingy's soon to be congested network.

*Name pending the outcome of Cisco vs. Apple suit.

[goofygamer]

wtf!?! verizon was supposed to be the carrier of the iphone? aww hella sukz. i have verizon too!! how gayy..

[gbae007]

Originally Posted by [IVI]

They were thinking the along the same lines of their iPod line. Ever notice how the iPod is the same price no matter where you go? An iPod that sells in the Apple store for $249 is still $248.87 at Wal-Mart. They have complete control over them. I bet the retailers have a love/hate relationship with Apple.

It's an issue of margin - retailer gets maybe 5% on the hardware. It's basically free of profits and the retailer makes it up on accessories, etc.

Same thing happens in the video games industry. Supplier price setting can only happen if there is demand to support it - despite recent surge of high-end portable Mp3 players, iPod still has a mononpolistic hold on that market.

[supersly_jones]

VERIZON customers don't have reception within 10 miles radius of my home...cingular has full and everyone else is dead to so cingular is the best in my area...it really does depend on area solely

[firmhonda]

Originally Posted by skittleslegend

I could be wrong, but from reading the article, it sounds like Apple wanted to, essentially, monopolize the deal with Verizon. That for damn sure wasn't going to work. WTF were they thinking....?

+1

I think that in the long run this would have screwed verizon and it's customers royally and I'm glad they didn't get the contract. I also don't have an ipod, never really wanted one that badly. I'd rather have a zune for half the price and it be a better product.

Anyways, the iphone really isn't all that impressive. It takes everything that's been out for a while now and adds a few touches to it to make it apple. The screen looks great, the tilt function is cool as hell, but that's it. It'll be really super cool for the guy that wants to impress the cheerleaders with his new iphone, but other than that I don't get the point.

I've had verizon for a little over 3 years now, and I love it. I've never had a problem that I didn't cause the entire time I've been with them. I take that back, I went like 6 hours out into the middle of nowhere and didn't get a reception once. Not getting a reception 1 single time in 3 years is pretty good to me. Not to mention the customer service has been fantastic.


And a note to a mod, could you possibly merge all the iphone threads that have been made lately.. it would really make a little more sense imo to have all this iphone stuff taken down from like 5 threads to 1. :shrugs: