Verizon passed up Apple iPhone deal

News Type: Event — Seeded on Mon Jan 29, 2007 11:30 AM EST

Article Source: Engadget

business, technology, apple, iphone, verizon, apple-iphone, verizon-wireless

While Cingular (er, AT&T, but you know what we mean) couldn't seem prouder of its iPhone exclusivity, apparently Apple's first choice was Verizon, but the two companies couldn't agree on a deal that worked for both companies. "We said no." Said Jim Gerace, a VZW VP. "We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial." Talks began as far back as two years ago, but Apple's demands were steep. They also give us an idea of what exactly is behind the Apple / Cingular agreement: Apple wanted a percentage of monthly service fees, control over distribution that would limit iPhone sales to Apple and Verizon stores, and even some control over service and support for iPhone customers. "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," say Gerace.

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{"commentId":500782,"authorDomain":"spudsstuff"}

Spuds Stuff

I suspect in time Verizon will regret not having being able to reach a deal with Apple. The iPhone is going to be huge and Cingular will profit nicely from their deal with Apple.

{"commentId":500782,"threadId":"71952","contentId":"542627","authorDomain":"spudsstuff"}

4 votes

#1 - Mon Jan 29, 2007 12:53 PM EST

{"commentId":500820,"authorDomain":"kyleb"}

Kyle Baxter

Agreed. Even if the iPhone doesn't sell terribly well, it is a ton of market exposure that Cingular is receiving as a result of the iPhone.

Verizon, though, doesn't want to give up their firm control of the network and the phones on it.

{"commentId":500820,"threadId":"71952","contentId":"542627","authorDomain":"kyleb"}

2 votes

#1.1 - Mon Jan 29, 2007 1:13 PM EST

{"commentId":500909,"authorDomain":"therealtruth"}

I Write the Truth

Good. Verizon offers the best service and pretty good phones. A crappy phone like the "iPhone" would hurt their image of a powerful network. I have had Verizon and Cinguar for years now... and I could honestly say that I never lost calls with Verizon, only Cingular. In my opinion, Cingular should say "Most dropped calls".

The iPhone is a huge device. I do like apple, and do own an apple, but the iPhone is something I will not be buying anytime soon. The battery life is terrible and the design of the phone is very unlike Apple. No buttons? That is stupid! Why do you want to get your screen all greasy and dirty? Sure you can put on a screen protector, but sometimes a few bottons are good.

Hail to Verizon, no wrong decision was made.

{"commentId":500909,"threadId":"71952","contentId":"542627","authorDomain":"therealtruth"}

#2 - Mon Jan 29, 2007 1:55 PM EST

{"commentId":500936,"authorDomain":"kyleb"}

Kyle Baxter

Do you mean you own a "Mac?" Apple computers are called, Macs, not "Apples."

"Crappy phone..." you know, you are certainly beginning to sound like just another troll. Oh well.

{"commentId":500936,"threadId":"71952","contentId":"542627","authorDomain":"kyleb"}

4 votes

#2.1 - Mon Jan 29, 2007 2:03 PM EST

{"commentId":501397,"authorDomain":"thedailytruth"}

The Messenger

Do you mean you own a "Mac?" Apple computers are called, Macs, not "Apples."

"Crappy phone..." you know, you are certainly beginning to sound like just another troll. Oh well.

lol

{"commentId":501397,"threadId":"71952","contentId":"542627","authorDomain":"thedailytruth"}

2 votes

#2.2 - Mon Jan 29, 2007 6:08 PM EST

{"commentId":501608,"authorDomain":"MCLiepshutz"}

MCLiepshutz

verizon offers pretty good phones?? Is that why Nokia has stopped making cdma phones? Really.. If I werejobs, I wouldn't have even considered Verizon. CDMA is old tech. The rest of the civilized world has moved on to gsm, gprs. Why bother making a phone that works on one network in the usa only? Personally, i think the sound quality i get with my verizon phone is sucky. Couple that with the fact that i can get ringtones and all the other geewaws from verizon only and you have lock in that makes Microsoft look magnanamous. As far as their network.. ..can you hear me now.. what...what..what????????

{"commentId":501608,"threadId":"71952","contentId":"542627","authorDomain":"MCLiepshutz"}

2 votes

#2.3 - Mon Jan 29, 2007 7:50 PM EST

{"commentId":501819,"authorDomain":"jaybutler"}

Jay Butler

one network in the usa only

And Canada.

{"commentId":501819,"threadId":"71952","contentId":"542627","authorDomain":"jaybutler"}

2 votes

#2.4 - Mon Jan 29, 2007 9:54 PM EST

{"commentId":502031,"authorDomain":"justinpm"}

JustinPM

He could have meant he owns an Apple iPod too. If you have a Ford Mustang, could you still use the statement "I own a Ford."?

{"commentId":502031,"threadId":"71952","contentId":"542627","authorDomain":"justinpm"}

#2.5 - Tue Jan 30, 2007 1:22 AM EST

{"commentId":502050,"authorDomain":"kyleb"}

Kyle Baxter

Possible, but considering the comment/inflammatory remark he made literally minutes before he commented in this thread, which was discussing Mac OS X, his post seemed to come under Apple computers.

Nonetheless it is possible, but the biggest point is that he appears to be trolling. As posted in the other seed by another user, it is probably best just to engage him.

{"commentId":502050,"threadId":"71952","contentId":"542627","authorDomain":"kyleb"}

1 vote

#2.6 - Tue Jan 30, 2007 2:01 AM EST

{"commentId":508795,"authorDomain":"therealtruth"}

I Write the Truth

I'm not saying I hate Mac OSX. I use it a lot.. just the overall design of the new phone is terrible compared to other mac products.

Btw... NOKIA MAKES PHONES FOR VERIZON. GET YOUR FACTS STRAIGHT.

{"commentId":508795,"threadId":"71952","contentId":"542627","authorDomain":"therealtruth"}

#2.7 - Fri Feb 2, 2007 2:19 PM EST

{"commentId":509214,"authorDomain":"kyleb"}

Kyle Baxter

Your use of evidence to support your claim astounds me.

{"commentId":509214,"threadId":"71952","contentId":"542627","authorDomain":"kyleb"}

1 vote

#2.8 - Fri Feb 2, 2007 6:39 PM EST

{"commentId":509291,"authorDomain":"jaybutler"}

Jay Butler

Nokia is not discontinuing CDMA phones. I sit here with my Nokia phone from Verizon. A quick check of the Nokia site shows that there are new CDMA models upcoming like this one.

CDMA may be old tech, but it works well. Verizon has the strongest network here in the Philadelphia area. Nextel/Sprint's coverage is good but not great. Cingular/AT&T and T-Mobile are both patchy. I understand the technologies. But, my experience with Verizon has been nothing but good up and down the east coast and into eastern Canada. I cannot remember the last time that I had a dropped call or a reception problem.

{"commentId":509291,"threadId":"71952","contentId":"542627","authorDomain":"jaybutler"}

1 vote

#2.9 - Fri Feb 2, 2007 9:21 PM EST

{"commentId":500934,"authorDomain":"TomB1002067"}

Tom B.

As a VZW customer, I absolutely despise the company. They have a decent network, but they intentionally cripple the phones they sell (e.g. disabling Bluetooth) and then have the gall to offer to sell you back SOME of the functionality.

{"commentId":500934,"threadId":"71952","contentId":"542627","authorDomain":"TomB1002067"}

3 votes

#3 - Mon Jan 29, 2007 2:03 PM EST

{"commentId":502222,"authorDomain":"PeteZaHutt"}

Pete ZaHutt

Excellent point. This is why I left Verizon.

{"commentId":502222,"threadId":"71952","contentId":"542627","authorDomain":"PeteZaHutt"}

1 vote

#3.1 - Tue Jan 30, 2007 8:15 AM EST

{"commentId":501179,"authorDomain":"sieb"}

sieb

Cnet's article on this topic mentioned Apple's need for closed development as another negative. Given Verizon's obsession with neutering all the options from perfectly good phones, I'm not surprised they turn down the iPhone and Apple's need for closed development. They also probably wanted to offer the phones primarily in Apple stores, not Verizon stores.

You would think though that having Apple take over the hardware support for the phone would be a good thing instead of making Verizon handle it all.

{"commentId":501179,"threadId":"71952","contentId":"542627","authorDomain":"sieb"}

1 vote

#4 - Mon Jan 29, 2007 4:07 PM EST

{"commentId":501243,"authorDomain":"kevinkopf"}

Kevin in VA

Verizon missed the chance to have the hottest phone on the market. I have had Verizon service for four years and love it but the phone selection is not the greatest. They had the chance to have the hottest phone to hit the market and passed. Even crippled this is better than most of their phones.

{"commentId":501243,"threadId":"71952","contentId":"542627","authorDomain":"kevinkopf"}

1 vote

#5 - Mon Jan 29, 2007 4:37 PM EST

{"commentId":501612,"authorDomain":"MCLiepshutz"}

MCLiepshutz

I agree with ya bud, the Verizon phone selection is absolutely lame, and the way they cripple things like bluetooth file transfer and all is a joke.

{"commentId":501612,"threadId":"71952","contentId":"542627","authorDomain":"MCLiepshutz"}

1 vote

#5.1 - Mon Jan 29, 2007 7:53 PM EST

{"commentId":501308,"authorDomain":"kylebyron"}

Kyle Byron

I have owned nearly every data-centric device known to man. The iPhone will kill. Verizon will ultimately kick themselves in the balls for not reaching some accord with Apple. The name / brand recognition on a device like that is reason enough to go above and beyond to try to brand it with your name in anyway possible. History repeats itself. The iPhone will be as huge as iPod. It could even take that over 4-5 years down the road. When the 4th gen iPhone comes out in 2011. ;-). Bring it! I just don't want to wait until June. I am very excited about this. Having a phone that SEEMLESSLY integrates with the Mac is going to be so nice!

{"commentId":501308,"threadId":"71952","contentId":"542627","authorDomain":"kylebyron"}

1 vote

#6 - Mon Jan 29, 2007 5:08 PM EST

{"commentId":501363,"authorDomain":"tastypopsicle"}

tastypopsicle

Unless Apple is getting some money from the service contracts (I have my doubts) I fail to see why Verizon couldn't come to an agreement. Don't mobile phone companies, at least in the US, exist to lock people into lengthy contracts? Isn't that why phones are practically given away after they have been out for a year? As a Cingular/AT&T customer I'm excited - even though purchasing an iPhone means that I am going to have to change my plan AND I'm going to have to extend my contract for at least 2 years. AT&T, if they make it attractive enough, is going to be making a lot of money on data plans.

I would love to know the precise reasons why the deal between Verizon and Apple fell apart. It baffles me.

{"commentId":501363,"threadId":"71952","contentId":"542627","authorDomain":"tastypopsicle"}

#7 - Mon Jan 29, 2007 5:50 PM EST

{"commentId":501964,"authorDomain":"jaybutler"}

Jay Butler

There was another story about this that did mention that Apple wanted two things Verizon was not willing to compromise on.

First, Apple did want a cut of the monthly contract fees.

Second, they insisted that the iPhone be sold only at Apple stores and Verizon company stores. Verizon uses a lot of affiliated agents, so that too was a deal breaker for them.

{"commentId":501964,"threadId":"71952","contentId":"542627","authorDomain":"jaybutler"}

1 vote

#7.1 - Mon Jan 29, 2007 11:47 PM EST

{"commentId":501971,"authorDomain":"jaybutler"}

Jay Butler

Actually, this Seeded article says much the same as all the other articles on the topic.

{"commentId":501971,"threadId":"71952","contentId":"542627","authorDomain":"jaybutler"}

1 vote

#7.2 - Mon Jan 29, 2007 11:53 PM EST

{"commentId":501457,"authorDomain":"jameyo"}

jameyo

On a (somewhat) related tangent, it's clear that the left hand at AT&T doesn't know what the right hand is doing. I believe that AT&T missed a huge opportunity to get free publicity for their name change by having Jobs demonstrate the iPhone with AT&T. Instead, they missed the boat by waiting two days to announce it themselves and letting the Cingular brand name get the exposure that was lost with the name change.

{"commentId":501457,"threadId":"71952","contentId":"542627","authorDomain":"jameyo"}

#8 - Mon Jan 29, 2007 6:36 PM EST

{"commentId":501504,"authorDomain":"kyleb"}

Kyle Baxter

They did announce it during the Keynote.

{"commentId":501504,"threadId":"71952","contentId":"542627","authorDomain":"kyleb"}

#8.1 - Mon Jan 29, 2007 6:54 PM EST

{"commentId":501607,"authorDomain":"RumWalker"}

RumWalker

Apple wanted a percentage of monthly service fees

Let's keep in mind that AT&T has a lower operating margin than Verizon, and that AT&T has a higher profit margin than Verizon. I'm sure if you did the number crunching (if we knew how much of a cut Apple wanted) AT&T could more easily afford the hit on their bottom line than Verizon.

I'm confident that Verizon isn't run by idiots, and that they will have a product or atleast a marketing campaign of their own to counter Cingular and the iphone.

{"commentId":501607,"threadId":"71952","contentId":"542627","authorDomain":"RumWalker"}

#9 - Mon Jan 29, 2007 7:49 PM EST

{"canLink":false,"threadId":"71952","isPrivate":false}

Verizon rejected Apple iPhone deal - USATODAY.com	USA Today	Mon Jan 29	0
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KYLE BAXTER

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Verizon passed up Apple iPhone deal

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