Verizon Rejected iPhone Deal

SnowDog74 writes "According to an article in USA Today, Verizon Wireless rejected an Apple deal over the iPhone. The article says that Verizon wasn't happy with the strict terms Apple demanded — a Verizon Wireless VP is quoted saying that Apple wanted a cut of monthly revenues and control of the customer relationship. What's perhaps equally interesting, however, is the implication from sources that say Cingular's exclusive 5-year deal with Apple applies within the United States only. If this is true, it undermines some of the criticism Apple has been receiving for their business strategy surrounding the iPhone, given the size of the cell-phone market outside the US."

Comments

Service & retailers: the other side of the coi

[sporkme]

Granted, the revenue stream from added features seems to be the principal deal-breaker, but TFA also highlights that Verizon would be cut out of certain customer service decisions. However you feel about the company, they do pride themselves on their customer satisfaction numbers. As a retailer, I found their policies to err on the side of customer benefit.

Apple's terms would have cut out major retailers when it comes to the handset, making it more difficult to retain those retail partners. It also would have taken warranty policy from the carrier to the manufacturer - and the iPhone would be the only handset with this arrangement. I think customers would have hated it, but maybe Apple planned to be more fair. How are they on iPod warranty?

Verizon has been treading lightly with retailers since their split with Radio Shack (over R$ revenue). The separation hurt both companies right off the bat, and the implications of the separation are still developing. If Wal-Mart and Best Buy were cut out of the iPhone deal, they might have such a sour taste that they skip off to Cingular instead.

If Cingular's terms do not exclude third-party retailers, Verizon will suffer anyway.

Verizon's big mistake

[Ankou]

Ya think this is one of those times like when the guy who didn't sign the Beatles for a record deal? At anyrate, I find it funny that there are statements like free 18 months switching from Verizon to Cinguar with the iPhone. I have no idea if this is true or not, but it would be quite a slap in the face. Maby this will be a wakeup call to the cell phone companies that they are completly clueless about the market they control.

Re:Verizon's big mistake

[Veinor]

The Consumerist has reported that the free 18 months is false (original story)

not a match for Verizon

[r00t]

Verizon wants to disable EVERYTHING on the phone that isn't pay-per-use. If you were thinking the iPhone was restrictive, think again.

Good

[tehaxer]

Verizon's the best carrier in the US, and they rejected a stupid phone that came with a bunch of rules that would have been bad for them and their customers. I have no doubt that apple fanpeople will eat up the phone, but I don't think the hype is enough to carry a non-fanperson all the way through buying a 500$ phone that is about the same size as the new Samsung (and probably other companies') PDA phones, yet doesn't have real pda functionality, integration with things that matter (mine is 2 years old and handles exchange, secure imap and smtp, has picsel, a great browser which samsung quietly distributes, and which apple I'm sure would devote an entire SHOW to since they have such limited resources that creating such a thing would feel like a big deal to them), a keyboard, 3g networking, 3rd party programs, sd slot? (Not sure...). It's not a good fit for a Verizon or Sprint, since they're serious carriers. Cingular is perfect for the iPhone. T-Mobile, too.

I mean, telling everyone a product you're releasing into a market that has generally been considered the highest of high tech for the last 5 years, then actually using 'High Technology' as the 4th bullet point on the front of the box and all your advertising is pretty stupid. I think the Verizon decision makers probably played out a sales scenerio in their heads between one of their reps and someone like me (I'd imagine a fairly typical Verizon customer), realized it made them look like idiots ("But but, it's HIGH techNOLOGY!!") and decided they'd let the kiddie carriers deal with the kiddie customers.

eff ell aim!

CDMA phones are unfriendly to free software

[tepples]

Its really pointless the keep harping on this CDMA/GSM rag.

The problem I've seen with phones that use Qualcomm's IS-95 system (often called CDMA after its physical layer) is that phones for IS-95 often support only Qualcomm's BREW environment, which uses digital signature requirements to shut out developers of shareware, freeware, and free software from porting their software to common IS-95 phones. As I understand it, phones that support GSM are more likely to support Java ME MIDP, which generally allows anybody to compile and run a midlet.

Re:CDMA phones are unfriendly to free software

[anothy]

you've identified three separate things which are entirely unrelated, and implied a correlation.
first, choice of network technology has nothing to do with application environment. Sprint, for example, is the second largest CDMA operator in the US, and does not sell a BREW phone (to the best of my knowledge; certainly the vast majority, at least, of their phones are Java-based phones). it is true that BREW is a sure sign of a CDMA phone, but the inverse is not true. even on Verizon's network, for example, see the Palm devices as a counter-example: no BREW even available.
second, choice of application environment has nothing to do with signing requirements. several operators who have java application environments on their phones require signing or other forms of controlled distribution and application loading for apps to run; see, for example, Nextel. also, nearly every vendor that allows unsigned apps to run on their devices (which is most of them) restricts unsigned apps' access to certain features, most commonly the PIM functions and things relating directly to the phone network, like sending SMS messages. to access those features, every network i've looked at (which is all the major US ones and a small handful of european ones) require signing.

Re:iPhone to NOT be sold in Cingular stores

[nuckin futs]

go watch the keynote on the iphone introduction. Fast forward to about an hour and 8 minutes into it.
Steve Jobs mentioned it will be available in Apple Stores AND Cingular Stores.