Verizon Rejected iPhone Deal due to Apple's Terms
USA Today reports that Verizon Wireless rejected Apple's offer to carry the iPhone exclusively due to Apple's terms.
According to the article, 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."
This included limited distribution to Apple Stores and Verizon stores only, leaving Wal-Mart, Best Buy and other Verizon distributors out of the loop. Apple also reportedly insisted on "sole discretion over whether to replace or repair the phone" with regard to customer service.
Cingular reps refused to provide the details of their agreement, but according to the report, the exclusive deal is a five year contract. This is contrary to previous reports that the Cingular's exclusive contract was only through 2008.
Apple's entry of the cell phone market was predicted to shake up the existing dynamics. Indeed, Apple appears to have made unique demands of cell phone carriers.
According to the article, 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."
This included limited distribution to Apple Stores and Verizon stores only, leaving Wal-Mart, Best Buy and other Verizon distributors out of the loop. Apple also reportedly insisted on "sole discretion over whether to replace or repair the phone" with regard to customer service.
Cingular reps refused to provide the details of their agreement, but according to the report, the exclusive deal is a five year contract. This is contrary to previous reports that the Cingular's exclusive contract was only through 2008.
Apple's entry of the cell phone market was predicted to shake up the existing dynamics. Indeed, Apple appears to have made unique demands of cell phone carriers.
Top Rated Comments
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66 months ago
5 years with Cingular (AT&T)?
Guess I'll be switching as soon as my contract runs out! :D
Guess I'll be switching as soon as my contract runs out! :D
66 months ago
Well, seems Verizon lost out on this one. Cingular might pick up lots
of new customers as a result. Besides, once phones are unlocked
and hit the eBay marketplace, they'll be used on other networks.
of new customers as a result. Besides, once phones are unlocked
and hit the eBay marketplace, they'll be used on other networks.
66 months ago
My Verizon phone broke 16 months into the contract in November, and I was debating whether or not to stay with Verizon, get the Sidekick I always wanted, or wait for the iPhone. I ended up getting the SK, but I really don't regret it. I have a phone that works for me. Plus, AT&T gets bad reception here.
66 months ago
smart move on cingular. with voip catching up, things are definitely in the blender. plus, with iphones being handed around with verizon distributors, i'm pretty sure things would get "lost" or "discounted" which would piss apple off.
66 months ago
Yet another reason why I do not like Verizon and cannot wait until my contract is up :)
66 months ago
Plus T-Mobile's launching a NATIONWIDE HSDPA network sometime this year (perhaps this quarter!)
66 months ago
hmm sounds like Verizon stated that if apple wanted to sell there iPhone it would have to play by Verizon rules.
I have to say some of those list of demands by apple are pretty far out there. Big one being apple being the one who decided if phone warrants replacement. Verizon not going to play that game because that means they take the blame when they tell a customer "we sorry we can not help you. you have to talk to apple."
Limiting the distribution from Verizon other outlets again something I think was a little over board.
Demanding a % out of the contract is a little over board.
For the most part it looks like apple demanding to much and Verizon stated it was not willing to bend to apple rules.
Apple needed Verizon more than Verizon needed apple. Hell apple needs the cellular companies more than they need apple and yet apple demands to be the one in control.. typical apple. I wonder if after being told off by Verizon they change there demands quite a bit.
I have to say some of those list of demands by apple are pretty far out there. Big one being apple being the one who decided if phone warrants replacement. Verizon not going to play that game because that means they take the blame when they tell a customer "we sorry we can not help you. you have to talk to apple."
Limiting the distribution from Verizon other outlets again something I think was a little over board.
Demanding a % out of the contract is a little over board.
For the most part it looks like apple demanding to much and Verizon stated it was not willing to bend to apple rules.
Apple needed Verizon more than Verizon needed apple. Hell apple needs the cellular companies more than they need apple and yet apple demands to be the one in control.. typical apple. I wonder if after being told off by Verizon they change there demands quite a bit.
66 months ago
Wow.
Two things:
1) I don't believe this is true, because I don't think Apple would have started with a non-GSM phone. Apple's a global company, and they would have started their first edition of the iPhone with the global standard, GSM. Cingular and T-Mobile use the GSM standard and Sprint and Verizon Wireless use the CDMA standard (only in the USA and some smaller Asian countries).
2) If it is true, Verizon missed out on a huge opportunity because Apple's offer didn't conform to the industry norm. Tip of the hat to Cingular for breaking the unwritten rules of the cell phone industry.
Two things:
1) I don't believe this is true, because I don't think Apple would have started with a non-GSM phone. Apple's a global company, and they would have started their first edition of the iPhone with the global standard, GSM. Cingular and T-Mobile use the GSM standard and Sprint and Verizon Wireless use the CDMA standard (only in the USA and some smaller Asian countries).
2) If it is true, Verizon missed out on a huge opportunity because Apple's offer didn't conform to the industry norm. Tip of the hat to Cingular for breaking the unwritten rules of the cell phone industry.
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