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."

foreign iPhone sales

[Dr Kool, PhD]

I don't think iPhone will be a hit in Europe or Asia like it might be here in America. Two thirds of Apple's revenue comes from the USA [sec.gov]. It's clear that Europe and Asia are not as infatuated with Apple's products as America.

Working with Apple's like dating a supermodel

[Eternal Vigilance]

Glamorous, yeah, and it looks really impressive at PR time. But when the cameras are off and you're just hanging around the apartment trying to have a relationship, you spend a whole lotta time ducking the cellphones being thrown at your head. [msn.com]

IBM decided Apple wasn't worth the pain. Looks like Verizon's making that same call, too.


"Steve Jobs makes Simon Cowell look positively sycophantic."

Exclusive to Rogers in Canada

[Rix]

However, I believe we have the right to demand locked phones be unlocked, so I'm not sure how that will play out.

It's all about branding

[EmbeddedJanitor]

Apple is a fashion brand, and Cingular (AT&T) probably is not. One of the biggest headaches for Apple is getting the right branding partners so that the iphone does not get associated with stodgy/boring services. Cell phone companies really hate churn. The iphone will probably have significant brand loyalty (as ipods do) and an exclusive deal will combat churn. However Cingular will have to come up with suitable ad campaigns etc to make sure that they appeal to the apple set otherwise both brands will suffer. No doubt Apple, who are very brand savvy, would have made these campaigns part of the deal.

Cingular needs all the help it can get...

[LOTHAR, of the Hill]

Cingular is suffering and hungry. Cingular as a name doesn't even exist anymore, but is reverting back to the ATT brand name.

Verizon sucks, but doesn't need Apple's business.

Aside from the fact the the iPhone is overrated, I think that the deal will hurt Cingular in the long run. Sharing revenues (not profits) could end being a case of "giving away the farm to sell a horse" kind of deal for Cingular.

Re:Service & retailers: the other side of the

[Tarwn]

Customer service numbers? They might pride themselves on those numbers, but they are as full of crap as their systems. I'm sorry, any company who has a known issue of the IVR dropping options off of peoples accounts for years, that then decides to not fix the IVR system is not what I would call customer-oriented.
Or how about the fact that they care so much about their customers that they require their call reps to handle anything non-call related in their spare moments between making call quotas? You know, those little things like recalculating bills that have gone awry (see IVR) or filing the paperwork...

My wife worked for Verizon, the only thing they care less about then their customers is their computer systems - except for th mice, those have to be installed by an expert technician. Probably not the same one that installed the fully tested software update that took down your entire department yesterday, cannot be backed out of, and is costing you your paycheck (if your not answering phones, your not earning...)

Yep, customers are number one, provided you qualify that statement as "after everythig else but the computer systems..."

Re:Service & retailers: the other side of the

[sporkme]

I don't doubt any of this. Big companies can never seem to nail the IT end of things. I never had a problem, however, calling in and getting problems solved with a Real Human Being (TM). For Sprint, Cingular and prepaid cellular accounts, getting problems fixed is typically a monumental task. I think Verizon's call center employees are more likely to be willing and able to help compared to other providers, based on my experience. We used a special number that got us straight to the retention department when caring for our clients.

I would also like to point out the strict nature of Verizon's credit score requirements, and the large deposits ($500 or more) that are required for Sprint^W less qualified applicants.

Re:interesting? no.

[Anonymous Coward]

Why does that matter? The deal with Cingular has been reported to mean that the iPhone is exclusively available to Cingular customers. For Apple to sell the phone overseas, that exclusivity clause would have to specifically indicate the US market only or Apple could get sued by Cingular for selling the iPhone in other countries.

So it's still important to note that the deal with Cingular applies only to the US market because it opens up the possibility that the iPhone will be available to users in other countries.

Re:Exclusive to Rogers in Canada

[Shadyman]

Rogers unlocks phones, I believe the rate is ~$250/phone.

Re:Service & retailers: the other side of the

[um... Lucas]

As a retailer, I found their policies to err on the side of customer benefit.

Ermm... I had 4 lines on a family plan...We were all happily using our 1800 minutes or whatever, and i was paying 170 or 180 a month. One month, there was a crisis in the family, and the total of calls was quite a bit in excess of our minutes, to the point that my bill was $680... I called customer service and explained the situation, and they said they'ed forward that along with a backdated request to up my minute allotment since i never went over and always paid on time... They said that this was a situation they've had before and that was usually the way that it was remedied... a few days later, i got a call from them that said that billing had determined that it "wasn't in the customers best interest" to do so...

Now, if they had said "sorry, but there's nothing we can do about it" that'd have been one thing... But they said "there is something we do about that" and then turned around and decided NOT to... That has made me one unhappy verizon customer... Of course, I'm sticking with them because my contracts up in June, and guess what comes out then on another network?

So no... I can't see how verizon is a customer service oriented carrier... everything with them is like pulling teeth...

Re:As a Verizon customer

[Buran]

"but they demand total control of their phones and what you put on them in return."

That's exactly why Verizon would never accept the iPhone. Apple wants total control over the phone and its design and how it looks. Verizon wants the same.

What do you get when two immovable objects stare across a room at each other?

The third one that realizes that denying people the ability to do what they want with what they pay for gets the big deal. Cingular doesn't cripple its phones.

Verizon getting the iPhone would have shocked me.

I'm also glad it didn't go CDMA in general -- I don't want to have to call support just to do something simple like change phones.

Re:not a match for Verizon

[Reaperducer]

$5 for Internet on my phone per month, plus data? 10 cents a piece for a text message that is less than 250 bytes? $3 per ringtone that I can get on iTunes(TM) for a single $? Not to mention the numbers listed as having called my phone that I have never heard of? Measuring calls in minutes instead of seconds?

Doesn't sound like you need a new country, just a new phone company.

$5/month for unlimited data? Sounds like T-Mobile USA. 10 cent text messages? Sounds like T-Mobile USA and a number of others. I can use any MP3 or open AAC file I want as my ringtone for free because I wasn't stupid enough to buy some locked-in carrier-provided phone and contract. And there are companies that measure calls in seconds instead of minutes. And ones that give free incoming calls (U.S. Cellular leaps to mind).

I think you're whining about a particular bad contract you're stuck in. Not everyone makes bad decisions.

smart move

[PureCreditor]

by far the world's users who are willing to pay premiums for nice phones reside outside USA. go with verizon, and u'll limit yourself to handful of CDMA countries. go with cingular, and u'll open up nearly every country in europe and asia.

people in USA are too used to these "$49 RAZR" deals that they can't possible imagine paying $499 for the iPhone. european and asian users will. now if we can get Apple to strike deals with SK Telecom or NTT DoCoMo, then u're all set.

iPhone to NOT be sold in Cingular stores

[siberian]

Was chatting with the local Cingular store manager and he mentioned that the iPhone is only to be sold from the Apple store. The local store franchises will not be allowed to sell these units.

He was a bit peeved, he's fielding 10 calls a day on the damn thing and just feels the dollars flying down the block to the Apple Store.

In Palo Alto on University Ave.

Might be common knowledge, I was suprised.

Re:Five years?

[dcam]

The biggest WTF in the US mobile phone system is you pay to recieve calls.

Re:Five years?

[anothy]

you've missed the point. it's overwhelmingly likely that you'll be able to do exactly that with the iPhone, just like you can with the vast majority of other GSM phones in the states (getting phones unlocked is not tremendously difficult, and when it costs you anything, i've never seen it break about $20). but with a two year contract, i'm tied to paying that operator, like it or not. let's say my bill's $40/month; that's $960. certainly more money than most people are wiling to just eat. the early termination charges on such things are generally ~$300 or more, too.
the GSM vs. CDMA thing is certainly a complicating factor, as well; no SIM cards in CDMA phones (generally; some have RUID (right?) cards, but i've never seen one in the US). it's also not just "Americans", of course, but Canadians, Koreans, Indians, and a bunch of other places - even parts of Europe! GSM's certainly the dominant force internationally, but it's incorrect to portray it as the only game around outside the US.

Re:Mono, what? Poly or something?

[Fred Ferrigno]

The ROKR was a Motorola phone using their OS and an iTunes-branded MP3 player. The mobile version of iTunes was written in Java and is likely completely custom. The ROKR was discontinued and replaced with the SLVR L7, a bar phone version of the RAZR. SLVRs purchased through Cingular or Rogers Wireless in Canada still come with iTunes, although Apple officially stopped supporting it in September and new music purchases won't play back. Phones sold elsewhere come with a Motorola-branded MP3 player instead of iTunes.

Long story short, Apple has yet to sell a single cell phone. Frankly, I'm all with you on the Newton analogy. Once Apple dries up the supply of people who will buy anything with an Apple logo, I don't think the iPhone is going to sell very well at all.

Re:Fuck Verizon

[Anonymous Coward]

Your friends and relatives had to pay deposits because they have piss-poor credit. Why is that Verizon's fault?

Because a thousand dollars for a cell phone contract is frikkin ridiculous, thats why.

If you aren't content, vote with your wallet.

That's the problem, dipshit: you can't. All the cell phone companies in the U.S. suck for service, suck for pricing, and suck in nickle and diming your customers.

Re:interesting? no.

[Fred Ferrigno]

Actually, it's more like Cingular bought AT&T. Cingular bought AT&T Wireless in 2004, which had been spun off as a separate company from AT&T. Later in a separate move, SBC (Cingular's parent) bought AT&T, taking the name for themselves.

Re:Five years? Thought it was two.

[MojoStan]

I could swear the clowntards at Cingular were crowing about a two year exclusive deal.

As another replier hinted, you might have misinterpreted the required two year Cingular service contract that iPhone buyers must agree to. However, I think you're correct about them being clowntards...

Also, they mentioned that the Cingular name and logo would ALWAYS be on screen. Doesn't that mean they were effectively lying about the resolution, as some of the resolution will always be used only in a user-hostile fashion?

Yup. From PC Magazine's January 10 interview with Glenn Lurie [pcmag.com], Cingular's president of national distribution:

While the Cingular logo will not appear on the body of the iPhone, the word "Cingular" will appear on the screen at all times.

As for them being clowntards:

When asked about a give-and-take leading to the Apple-Cingular partnership, Lurie said, "I'm not sure we gave anything." Later, he commented, "I think they bent a lot." That bending included allowing the phone to be locked to Cingular, just one of several restrictions on the new iPhone. Press reports today said the phone will not accept third-party applications, though Apple may allow third parties to program mini-application "widgets.

"If you want an iPhone, you are going to get the luxury of being on the Cingular network," Lurie said.

My favorite part:

While "there are bad guys out there that unlock phones," Lurie said, Apple and Cingular are taking unspecified steps to make the phone more difficult to unlock and use on other GSM carriers in the US.

Bad guys? What a fucktard. I'm not blaming Apple, though. I wouldn't be surprised if all phone companies are nearly this bad.

Re:Five years?

[MojoStan]

you've missed the point. it's overwhelmingly likely that you'll be able to do exactly that with the iPhone, just like you can with the vast majority of other GSM phones in the states (getting phones unlocked is not tremendously difficult, and when it costs you anything, i've never seen it break about $20).

Not according to Glenn Lurie, Cingular's president of national distribution. From a PC Magazine article [pcmag.com]:

While "there are bad guys out there that unlock phones," Lurie said, Apple and Cingular are taking unspecified steps to make the phone more difficult to unlock and use on other GSM carriers in the US.

So Cingular and Apple will supposedly make it difficult to unlock the iPhone. Also, you're a BAD GUY (says Cingular) if you unlock your iPhone or any other phone. Besides, the GP's point was that phones were unlocked in the rest of the world (outside the USA).