Verizon rejected Apple iPhone deal

Verizon rejected Apple iPhone deal
Updated 1/29/2007 9:50 AM ET



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.

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.

---

› See More: Verizon rejected Apple iPhone deal

Billybobh3 wrote:

<snip>

> 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.

LOL, Verizon probably wanted to disable the transfer of audio, photos,
video and ringtones from the computer to the phone, like they've done on
most of the handsets they sell, demanding that iPhone owners send all
their content to the phone over the cellular network, rather than via
USB, Bluetooth, or WiFi.

"SMS" <[email protected]> wrote in message
news:[email protected]...
> Billybobh3 wrote:
>
> <snip>
>
>> 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.
>
> LOL, Verizon probably wanted to disable the transfer of audio, photos,
> video and ringtones from the computer to the phone, like they've done on
> most of the handsets they sell, demanding that iPhone owners send all
> their content to the phone over the cellular network, rather than via USB,
> Bluetooth, or WiFi.

Let me know how you make out with EDGE....

Billybobh3 wrote:
> "SMS" <[email protected]> wrote in message
> news:[email protected]...
>> Billybobh3 wrote:
>>
>> <snip>
>>
>>> 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.
>> LOL, Verizon probably wanted to disable the transfer of audio, photos,
>> video and ringtones from the computer to the phone, like they've done on
>> most of the handsets they sell, demanding that iPhone owners send all
>> their content to the phone over the cellular network, rather than via USB,
>> Bluetooth, or WiFi.
>
> Let me know how you make out with EDGE....

Hey, the iPhone is not something I'd ever buy, it's too de-featured for
the price. It's a consumer product for people that don't need full PDA
functionality. That's not to say future versions of it are not going to
be better.

What I'd like in a phone is:

-VOIP Application for WiFi calling

-HSDPA or EV-DO with tethering, not just low speed EDGE.

-Full PDA with third-party applications, akin to what's available for
phone running WinCE or Palm OS.

-MP3 Player that does not support DRM formats

-Slide out keyboard for text input

-USB, Bluetooth, Consumer IR and IrDA IR

I think that Apple/Cingular went with EDGE because they want to offer
less expensive plans than they would offer with high speed data. I read
that they will be offering monthly plans in the $80 range. With HSDPA
and tethering, they'd be over $100/month.

In article <[email protected]>,
SMS <[email protected]> wrote:

> Billybobh3 wrote:
>
> <snip>
>
> > 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.
>
> LOL, Verizon probably wanted to disable the transfer of audio, photos,
> video and ringtones from the computer to the phone, like they've done on
> most of the handsets they sell, demanding that iPhone owners send all
> their content to the phone over the cellular network, rather than via
> USB, Bluetooth, or WiFi.

And I'm glad Apple would handle repairs. I've always had Macs and always
had great (though rare) repair experiences. I shudder to think what
Cingular would do if left to their own devices...

--
To reply by email, remove the word "space"

On Mon, 29 Jan 2007 20:08:12 -0500, "Billybobh3"
<[email protected]> wrote in
<[email protected]>:

>[SNIP]

Yeah, right. Can you say, "Sour grapes?"

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Mon, 29 Jan 2007 19:04:58 -0800, Kurt <[email protected]> wrote
in <[email protected]>:

>And I'm glad Apple would handle repairs. I've always had Macs and always
>had great (though rare) repair experiences.

You've been lucky to miss out on warranty problems.
<http://www.google.com/search?hl=en&q=apple+warranty+problems&btnG=Google+Search>

>I shudder to think what
>Cingular would do if left to their own devices...

Toss the phone and give you a refurb.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

John Navas <[email protected]> wrote in
news:[email protected]:


>
> Yeah, right. Can you say, "Sour grapes?"
>


Yeah, right. Can you say, "blinded by ignorance?"

Scott wrote:
> John Navas <[email protected]> wrote in
> news:[email protected]:
>
>
>> Yeah, right. Can you say, "Sour grapes?"
>>
>
>
> Yeah, right. Can you say, "blinded by ignorance?"

Whether or not Verizon made the right decision in no acceding to Apple's
demands remains to be seen. The key question is how many new subscribers
the iPhone brings to Cingular, that would have gone elsewhere if not for
the iPhone. Verizon is doing so much better than Cingular right now in
terms of new post-paid subscribers, that maybe they just decided that
they didn't have to give away the store to Apple.

It is very interesting that Apple first tried to do a deal with Verizon.
Clearly they saw the value of partnering with the carrier that has the
best network in the U.S..

SMS <[email protected]> wrote in news:45be9bb1$0$68949
[email protected]:

> LOL, Verizon probably wanted to disable the transfer of audio, photos,
> video and ringtones from the computer to the phone, like they've done on
> most of the handsets they sell, demanding that iPhone owners send all
> their content to the phone over the cellular network, rather than via
> USB, Bluetooth, or WiFi.
>
>

Do you suppose Steve Jobs had a VZW hobbled-up phone, before, and didn't
wanna get blamed for VZW turning it into a PoS?....hee hee...

Larry
--
Democracy is when two wolves and a sheep vote on who's for dinner.
Liberty is when the sheep has his own gun.

On Mon, 29 Jan 2007 20:57:35 -0800, SMS <[email protected]>
wrote in <[email protected]>:

>Scott wrote:
>> John Navas <[email protected]> wrote in
>> news:[email protected]:
>>
>>> Yeah, right. Can you say, "Sour grapes?"
>>
>> Yeah, right. Can you say, "blinded by ignorance?"
>
>Whether or not Verizon made the right decision in no acceding to Apple's
>demands remains to be seen. The key question is how many new subscribers
>the iPhone brings to Cingular, that would have gone elsewhere if not for
>the iPhone. Verizon is doing so much better than Cingular right now in
>terms of new post-paid subscribers, that maybe they just decided that
>they didn't have to give away the store to Apple.
>
>It is very interesting that Apple first tried to do a deal with Verizon.
>Clearly they saw the value of partnering with the carrier that has the
>best network in the U.S..

"First" is another of your inventions -- the actual story (rumor)
<http://www.usatoday.com/tech/news/2007-01-28-verizon-iphone_x.htm>
just says Verizon turned Apple down. If true (there is no independent
corroboration), that might well mean that Apple approached _both_
Cingular and Verizon (hint: that's a common practice, called a "bidding
war"); Cingular won the bidding; and Verizon is now trying to put a good
face on losing and the likely adverse impact on its market share.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

In article <[email protected]>,
John Navas <[email protected]> wrote:

> On Mon, 29 Jan 2007 19:04:58 -0800, Kurt <[email protected]> wrote
> in <[email protected]>:
>
> >And I'm glad Apple would handle repairs. I've always had Macs and always
> >had great (though rare) repair experiences.
>
> You've been lucky to miss out on warranty problems.
> <http://www.google.com/search?hl=en&q...nG=Google+Sear
> ch>
>
> >I shudder to think what
> >Cingular would do if left to their own devices...
>
> Toss the phone and give you a refurb.

or not, depending on the mood of the CSA.

--
To reply by email, remove the word "space"

My guess on why thes VZ negotiations took place so early, was that Apple
would've loved to have
VZ as the exclusive carrier, but the decision between CDMA + GSM just had to
be made...

Like I said, only a guess....


--
I work for the ILEC ...." stuff happens! "



"Larry" <[email protected]> wrote in message
news:[email protected]...
> SMS <[email protected]> wrote in news:45be9bb1$0$68949
> [email protected]:
>
>> LOL, Verizon probably wanted to disable the transfer of audio, photos,
>> video and ringtones from the computer to the phone, like they've done on
>> most of the handsets they sell, demanding that iPhone owners send all
>> their content to the phone over the cellular network, rather than via
>> USB, Bluetooth, or WiFi.
>>
>>
>
> Do you suppose Steve Jobs had a VZW hobbled-up phone, before, and didn't
> wanna get blamed for VZW turning it into a PoS?....hee hee...
>
> Larry
> --
> Democracy is when two wolves and a sheep vote on who's for dinner.
> Liberty is when the sheep has his own gun.

There is _no_ evidence that negotiations with Verizon took place
_before_ negotiations with Cingular, and they almost certainly took
place at the same time as part of a "bidding war". Since Apple is a
worldwide company, and since GSM/UMTS dominates the worldwide market,
GSM is a much better opportunity for the iPhone than CDMA2000, and thus
Cingular is the logical choice for Apple, especially given that it's the
largest US carrier.

p.s. Please don't switch posting styles (top vs bottom) in mid-thread
-- it's confusing. Thanks.


On Tue, 30 Jan 2007 18:09:57 GMT, "Remove This"
<[email protected]> wrote in <VRLvh.4454$Pk5.2367@trndny04>:

>My guess on why thes VZ negotiations took place so early, was that Apple
>would've loved to have
>VZ as the exclusive carrier, but the decision between CDMA + GSM just had to
>be made...
>
>Like I said, only a guess....

>"Larry" <[email protected]> wrote in message
>news:[email protected]...
>> SMS <[email protected]> wrote in news:45be9bb1$0$68949
>> [email protected]:
>>
>>> LOL, Verizon probably wanted to disable the transfer of audio, photos,
>>> video and ringtones from the computer to the phone, like they've done on
>>> most of the handsets they sell, demanding that iPhone owners send all
>>> their content to the phone over the cellular network, rather than via
>>> USB, Bluetooth, or WiFi.
>>>
>>
>> Do you suppose Steve Jobs had a VZW hobbled-up phone, before, and didn't
>> wanna get blamed for VZW turning it into a PoS?....hee hee...

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

Remove This wrote:
> My guess on why thes VZ negotiations took place so early, was that Apple
> would've loved to have
> VZ as the exclusive carrier, but the decision between CDMA + GSM just
> had to be made...

I doubt it. The part of the iPhone that would be CDMA or GSM is a very
small part of the total product. There are a great many phones that are
available in both GSM and CDMA.